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Item 1. Business

2023-03-10 compared with 2022-03-01 · 427 added, 489 removed, 865 unchanged (51% of the section changed)

We are a biopharmaceutical company with the purpose of bettering the life of each person impacted by kidney disease.

We are a fully integrated biopharmaceutical company committed to addressing patients’ unmet needs.

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.

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 potential future products have the ability to deliver value.

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 current portfolio includes a late-stage product candidate and a commercial product:

• 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.

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.

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.

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.

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.

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.

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.

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.

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.

We submitted a New Drug Application, or NDA, to the U.S.

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.

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.

The FDA also assigned the application standard review and a Prescription Drug User Fee Act, or PDUFA, target action date of March 29, 2022.

Our collaboration partner, Otsuka Pharmaceutical Co.

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.

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.

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.

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.

With the support of its data monitoring committee, UTHealth decided to expand the 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.

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.

Department of Defense, or DOD, to expand this clinical trial at its facilities.

• Auryxia ® (ferric citrate) is approved and marketed in the United States for two indications:

(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.

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).

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%.

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.

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.

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 restated the Amended and Restated License Agreement, dated April 8, 2019, or the Vifor First Amended Agreement.

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 .

We refer to Fresenius Medical Care North America and its affiliates, these organizations and specialty pharmacies collectively as the “Supply Group" .

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.

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.

Our Japanese sublicensee, Japan Tobacco, Inc., or JT, and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii, commercialize Riona in Japan.

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.

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.

Praliciguat is in development for the treatment of focal segmental glomerulosclerosis, which is highly complementary to our strategy to identify and develop novel therapeutics for people impacted by kidney diseases.

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.

Our mission and our culture are centered around the goal of improving the lives of people impacted by kidney disease through the discovery, development and commercialization of innovative therapeutics.

Our strategy is to execute on the following initiatives, which we believe will create significant market opportunities for us:

• Prepare for the potential commercialization of vadadustat for the treatment of anemia due to CKD in the United States.

We believe vadadustat has the potential to address limitations of injectable ESAs, and become the new oral standard of care for the treatment of anemia due to CKD, if approved.

We submitted an NDA to the FDA for vadadustat in March of 2021, which was accepted by the FDA in May of 2021.

The FDA assigned the application standard review and a PDUFA target action date of March 29, 2022.

We believe we are well positioned to commercialize vadadustat in the United States with our nephrology-focused commercial team, our partnership with Otsuka, and the Vifor Second Amended Agreement, if vadadustat receives FDA approval.

• Support vadadustat adoption and growth outside of the United States.

We plan to continue to support MTPC’s commercialization and growth of Vafseo in Japan.

In addition, Otsuka submitted a MAA for vadadustat to the EMA in October 2021, and MTPC filed a new drug application for vadadustat for the treatment of anemia due to CKD in adult patients in Taiwan in January 2022.

We also plan to support MTPC's and Otsuka’s commercialization efforts for vadadustat in Japan and Europe and certain other markets for which MTPC and Otsuka have commercialization rights, subject to the applicable regulatory approvals.

We retain full commercial rights to vadadustat in Latin America, allowing us maximum flexibility in the region.

• Maximize the value of Auryxia, and leverage the product as a commercial foundation for vadadustat, in CKD.

We aim to continue to use our nephrology-focused commercial organization to increase awareness, demand for and adoption of Auryxia for its approved indications with key stakeholders including nephrologists, third-party payors, dialysis organizations, patients and their families.

In addition to bringing meaningful clinical benefits to patients, Auryxia provides strategic value to Akebia by allowing us to leverage our existing nephrology-focused commercial footprint and deepen key customer and prescriber relationships that we believe will be important for the future commercialization of vadadustat, if approved, and other potential future renal products.

Our purpose is to better the life of each person impacted by kidney disease, and we have established ourselves as a leader in the kidney community.

We believe our demonstrated ability to deliver value broadly to the kidney community has enabled us to build a sustainable company.

While our current focus centers on people living with kidney disease, we believe our continued commitment to our products and pipeline assets, focusing on all patients who can realize a meaningful benefit from our medicines, will result in delivering value for shareholders.

Our current portfolio includes:

• Auryxia® (ferric citrate) , a medicine approved and marketed in the United States for two indications:

(1) the control of serum phosphorus levels in adult patients with dialysis dependent chronic kidney disease, or DD-CKD, or the Hyperphosphatemia Indication, and (2) the treatment of iron deficiency anemia, or IDA, in adult patients with non-dialysis-dependent chronic kidney disease, or NDD-CKD.

The product is also available in Japan and Taiwan.

• Vafseo™ (vadadustat) , an oral hypoxia-inducible factor prolyl hydroxylase, or HIF-PH, inhibitor, is approved in Japan for the treatment of anemia due to chronic kidney disease, or CKD, in adult patients.

Vadadustat is under regulatory review for the treatment of anemia due to CKD in Europe, where it has received a positive opinion from the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, in adult patients on dialysis.

Vadadustat is also under regulatory review for the treatment of anemia due to CKD in Australia, Korea, Taiwan and other countries.

We continue to pursue a path to potentially gain approval for vadadustat in the U.S.

Further, we have several lifecycle management and indication expansion opportunities currently under evaluation or in development for vadadustat.

• HIF-PH inhibitors in preclinical development.

The discovery of hypoxia-inducible factor, or HIF, laid the foundation to explore the central role of oxygen sensing in many diseases.

As we have seen through the development of vadadustat as a treatment for anemia due to CKD, when stabilized, HIF triggers wide-ranging adaptive, protective responses during hypoxic or ischemic conditions.

Our clinical team and research scientists are eager to further develop HIF-PH inhibitors for various indications including acute kidney injury, or AKI, and retinopathy of prematurity, or ROP.

We continue to explore additional commercial and development opportunities to expand our pipeline and portfolio of novel therapeutics through both internal research and external innovation to leverage our fully integrated team.

Today we market Auryxia in the United States with our well-established, nephrology-focused commercial organization.

Auryxia is a non-calcium, non-chewable, orally administered tablet that was approved for marketing by the U.S.

Food and Drug Administration, or FDA, in September 2014 as a phosphate binder for the Hyperphosphatemia Indication and was commercially launched in the United States shortly thereafter.

In November 2017, Auryxia received marketing approval from the FDA for a second indication, the treatment of iron deficiency anemia, and was commercially launched for this indication in the United States shortly thereafter.

Our Japanese sublicensee, Japan Tobacco, Inc., or JT, and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii, commercialize ferric citrate hydrate as Riona® in Japan.

Averoa SAS, or Averoa, has an exclusive license to develop and commercialize ferric citrate in the European Economic Area, or EEA, Turkey, Switzerland and the United Kingdom.

In 2022, Auryxia product revenue increased approximately 24.5% over 2021 due to the company’s focus on implementing a new contracting strategy in late 2021.

Since 2018, Auryxia product revenue has grown at a compounded annual growth rate of approximately 17% due to market share gains and improved net price per pill, despite a 13% decline in total prescriptions for phosphate binders in the United States since 2018.

We are seeking regulatory approval in the European Union and the United States for vadadustat as an oral treatment of anemia in adult DD-CKD patients.

We and Mitsubishi Tanabe Pharma Corporation, or MTPC, are also seeking regulatory approval for vadadustat as a treatment for anemia in adult DD-CKD and NDD-CKD patients in the United Kingdom, Switzerland and Australia, and Korea and Taiwan, respectively.

Vadadustat is currently pending an European Commission, or EC, approval decision.

On February 23, 2023, the CHMP of the EMA adopted a positive opinion recommending the EC approve Vafseo™ for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis.

We anticipate that the EC will grant marketing authorization for Vafseo in May 2023, which would be applicable to all 27 European Union member states and Iceland, Norway and Liechtenstein.

Following the termination of our U.S.

and international collaboration agreements with Otsuka in June 2022, we regained full rights to vadadustat in Europe, Australia, China, Canada, Latin America, the Middle East and Russia.

As we do not have a commercial presence in Europe, we are seeking a partner in Europe and will support the partner’s launch of vadadustat, if approved.

We are seeking to identify and secure a partner that can effectively facilitate treatment of as many people as would benefit from vadadustat, if approved, thus maximizing the value of the asset.

We submitted a New Drug Application, or NDA, to the FDA for vadadustat in March of 2021.

On March 29, 2022, the FDA issued a complete response letter, or CRL, to our NDA for vadadustat.

The FDA concluded that the data in the NDA do not support a favorable benefit-risk assessment of vadadustat for dialysis and non-dialysis patients.

The FDA expressed safety concerns noting failure to meet non-inferiority in MACE in the non-dialysis patient population, the increased risk of thromboembolic events, driven by vascular access thrombosis in dialysis patients, and the risk of drug-induced liver injury.

We believe there are compelling data supporting a positive benefit-risk profile for the use of vadadustat broadly in patients with CKD, including non-dialysis patients though we have always remained cautious about receiving a broad label for vadadustat that would extend to non-dialysis patients with anemia due to CKD.

As such, we began the process to dispute the FDA ruling, and in October 2022, we submitted a Formal Dispute Resolution Request, or FDRR, with the FDA regarding the CRL, specifically related to DD-CKD adult patients.

The appeal focused on the favorable balance of the benefits and risks of vadadustat for the treatment of adult DD-CKD patients in light of safety concerns expressed by the FDA in the CRL related to the rate of adjudicated thromboembolic events driven by vascular access thrombosis for vadadustat compared to the active comparator and the risk of drug-induced liver injury.

In February 2023, we received a second interim response from the FDA to our FDRR, which is still under consideration by the FDA at the time of this filing.

Following the termination of our collaboration agreement with Otsuka Pharmaceutical Co.

Ltd., or Otsuka, we own full rights to vadadustat in the U.S., subject to our licensing agreement with Vifor (International) Ltd.

(now a part of CSL Limited), or CSL Vifor.

If we obtain FDA approval of vadadustat for DD-CKD adult patients, we plan to commercialize vadadustat in the United States with CSL Vifor.

Leveraging our learnings from the research and development of vadadustat, and a breadth of scientific expertise on the HIF pathway, we believe there is potential to leverage HIFs to treat other hypoxic conditions and to explore the use of HIFs in acute settings.

We believe this potential applies to vadadustat as well as other preclinical assets we are internally developing.

Regarding broader uses of vadadustat, in July 2020 we partially funded an investigator-sponsored clinical study conducted 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 treat acute respiratory distress syndrome, or ARDS, in adult patients who have been hospitalized due to COVID-19 and hypoxemia (O2 saturation ≤94%).

The study was a phase 2, randomized, double-blind, placebo-controlled trial that measured the proportion of patients who had scores of 6, 7, or 8 on the National Institute of Allergy and Infectious Disease Ordinal Scale, or NIAID-OS, at Day 7 and Day 14, with Day 14 being the primary endpoint.

While the study missed the primary endpoint, the data, detailed in the Clinical Development Program section, were encouraging.

For reference, subjects receiving vadadustat demonstrated 94% probability for conferring benefit on the NIAID-OS at Day 14, slightly below the primary superiority threshold of >95% probability.

We believe vadadustat has the potential to prevent the worsening of ARDS more broadly since the mechanism underlying the benefits are not specific to COVID-19, and we will further explore vadadustat in an acute care setting.

Our strategic focus and business operations are driven by our commitment to patients.

We understand the unmet needs of kidney patients and others impacted by chronic and debilitating illness.

Our strategy is to execute initiatives aligned with our three pillars to maximize value while advancing innovation to address patients’ unmet needs.

• Maximize the Value of Auryxia:

We continue to use our nephrology-focused commercial organization to increase awareness, demand for and adoption of Auryxia for its approved indications with key stakeholders including nephrologists, third-party payors, dialysis organizations and patients.

• Support Vadadustat Globally:

We believe vadadustat as a treatment for anemia due to CKD represents a significant opportunity to drive shareholder value.

We own full rights to vadadustat in Europe, China, Latin America and certain other territories and U.S.

rights subject to our license agreement with CSL Vifor.

We received a positive opinion from the CHMP for vadadustat for adult DD-CKD patients, and anticipate that the EC will grant marketing authorization for Vafseo in May 2023.

In addition, we are engaged with regulatory bodies in the United Kingdom, Switzerland and Australia, which are part of the ACCESS Consortium, that could lead to approval of vadadustat in these countries.

We continue to pursue a path for potential approval for vadadustat as a treatment for anemia in adult DD-CKD patients in the U.S.

and remain actively engaged in a process to dispute the CRL issued for vadadustat.

We believe in the benefits vadadustat can deliver to patients, if approved.

• Invest in Pipeline and Explore Strategic Growth:

We aim to thoughtfully invest in our pipeline by developing internal assets and exploring other strategic growth opportunities.

◦ Advance vadadustat clinical development for additional therapeutic indications :

In addition to our CKD program and the ARDS study, we plan to identify and initiate development planning for other programs where vadadustat may have therapeutic benefits.

• Continue to expand our pipeline and portfolio of novel therapeutics .

We aim to continue to add to our pipeline and portfolio of novel therapeutics through internal research, discovery and development, and through external innovation and strategic transactions, such as in-licenses, collaborations and acquisitions.

In June 2021, we entered into the Cyclerion Agreement with Cyclerion, pursuant to which Cyclerion granted us an exclusive global license under certain intellectual property rights to research, develop and commercialize praliciguat, an investigational oral sGC stimulator, which is highly complementary to our strategy to identify and develop novel therapeutics for people impacted by kidney disease.

We plan to continue to develop praliciguat and explore similar opportunities that align with our strategic vision in the future.

In addition, given our expertise in research and development, we believe there may be opportunities to leverage these assets and establish mutually beneficial relationships with other companies that are looking to enter the renal market or attempting to develop renal therapeutics.

Our management team has extensive experience in developing and commercializing drugs for the treatment of renal and metabolic disorders, a deep understanding of the renal space and biological pathways involved in kidney disease including HIF biology and iron metabolism, and broad business development expertise.

We intend to advance development of vadadustat for the treatment of ARDS.

We intend to work with UTHealth on an adequate, well-controlled study in a broad patient population, beyond COVID related ARDS.

◦ Continue to drive our internal pipeline and portfolio of novel therapeutics .

We aim to continue to add to our pipeline and portfolio of novel therapeutics through internal research, discovery and development.

We plan to continue to develop early-stage assets and explore opportunities that align with our strategic vision.

As a leader in HIF biology, we have invested resources to build out a preclinical portfolio of several potential development candidates which may enter the clinic in the next few years.

Areas of interest for pursuit of clinical development include AKI, ARDS and ROP.

◦ Explore opportunities for growth :

As a fully integrated biopharmaceutical company, we have an established commercial organization and expertise in research and development.

We believe there may be opportunities to leverage our assets through strategic transactions, including establishing mutually beneficial relationships with other companies that are looking to advance assets potentially through regulatory processes or commercial launch.

We strive to execute our strategy from a strong financial position.

We plan to continue to invest in prioritized drug research and development activities, funded by revenue from Auryxia and existing cash on hand.

To do so, we are focused on maximizing Auryxia net product revenue, prioritizing the highest value development opportunities, and aggressively reducing discretionary spending.

Our management team has extensive experience in developing and commercializing innovation medications, a deep understanding of the renal space and biological pathways involved in kidney disease including HIF biology and iron metabolism, and broad business development expertise.

We believe we are well positioned to execute on our strategy.

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In the United States, CKD significantly impacts the U.S.

healthcare system, potentially affecting about 37 million patients and costing Medicare nearly $120 billion annually for treating Medicare beneficiaries with CKD of end-stage renal disease or end-stage kidney disease, or ESRD or ESKD, according to the Centers for Disease Control and Prevention.

Department of Health and

Human Services has recognized this national pandemic and partnered with ASN to found the KidneyX Innovation Accelerator, a public-private partnership to improve the lives of the 850 million people worldwide currently affected by kidney diseases by accelerating innovation in the prevention, diagnosis and treatment of kidney diseases.

healthcare system, potentially affecting about 37 million patients and costing Medicare nearly $120 billion annually for treating Medicare beneficiaries with CKD of end-stage renal disease, or ESRD, or end-stage kidney disease, or ESKD, according to the Centers for Disease Control and Prevention.

Department of Health and Human Services has recognized this national pandemic and partnered with ASN to found the KidneyX Innovation Accelerator,

a public-private partnership to improve the lives of the 850 million people worldwide currently affected by kidney diseases by accelerating innovation in the prevention, diagnosis and treatment of kidney diseases.

Most of the conditions covered by the term “kidney disease” may lead to renal failure and dependence on dialysis or kidney transplant for survival.

4 unchanged sentences

This damage causes waste products to build up in the patient’s blood leading to other health problems, including anemia, cardiovascular disease and bone disease.

As illustrated in the table below, CKD patients are categorized in one of five stages based on the degree of their loss of kidney function as measured by the glomerular filtration rate, or GFR, and the level of protein in the urine, referred to as albuminuria.

Stages and Prevalence of CKD in the United States

Stage Description GFR (mL/min/1.73m2) a U.S.

Prevalence Rates b, c Estimated Number of U.S.

Patients (millions) d, e

1 Kidney damage with normal or increased GFR ≥90 4.6% 11.2

2 Kidney damage with mildly decreased GFR 60-89 3.0% 7.3

3 Moderately decreased GFR 30-59 6.7% 16.4

4 Severely decreased GFR 15-29 0.4% 1.0

5 Kidney failure (includes non dialysis, dialysis and transplant) <15 (or dialysis) 0.3% (calculated) 0.7

GFR categories defined in the August 2012 Kidney Disease Improving Global Outcomes Clinical Practice Guideline for Anemia in Chronic Kidney Disease, p.

Prevalence Rates for Stages 1-4 based on averages of data from 2011-2012, 2013-2014, and 2015-2016, CDC CKD Surveillance System, National Health and Nutrition Examination Survey.

Prevalence Rate for Stage 5 is based on a calculation using estimated number of U.S.

patients with ESRD from 2018 U.S.

Renal Data System Annual Report, February 21, 2019, as set forth in this table, and U.S.

population data for people 20 years and older from www.census.gov.

Estimated Number of U.S.

Patients for Stages 1-4 based on the 2018 U.S.

Prevalence rates, as set forth in this table, as applied by Akebia to U.S.

population data for people 20 years and older from www.census.gov.

Estimated Number of U.S.

End-Stage Renal Disease Patients from 2018 U.S.

Renal Data System Annual Report, February 21, 2019.

The prevalence and incidence of CKD is increasing in all segments of the United States population.

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Typically the prevalence of these conditions increases as CKD progresses.

For instance, anemia is characterized by low hemoglobin levels and is typically associated with a worsening quality of life, increased hospitalizations and increased mortality.

The prevalence of anemia increases with the severity of CKD from an estimated 20% in patients with Stage 3 NDD-CKD to an estimated 95% in patients with Stage 5 DD-CKD.

For instance, patients with CKD often experience high phosphorus and develop hyperphosphatemia, which can result in symptoms including nausea and muscle or bone pain.

Additionally, anemia, characterized by low hemoglobin levels, is typically associated with a worsening quality of life, increased hospitalizations and increased mortality.

Anemia, or low hemoglobin/red blood count, in patients with CKD most commonly arises from two etiologies:

Anemia due to CKD:

results from inadequate levels of EPO, a protein hormone synthesized by specialized cells in the kidney that stimulates RBC production in the bone marrow.

results from inadequate levels of EPO, a protein hormone synthesized by specialized cells in the kidney that stimulates red blood cell, or RBC, production in the bone marrow.

As renal function declines, the body progressively loses the ability to produce endogenous EPO;

results from low levels of iron due to abnormal iron absorption and utilization in patients with CKD.

The global Phase 3 clinical development program for vadadustat evaluated the efficacy and safety of vadadustat for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients.

We submitted an NDA to the FDA, for vadadustat in March of 2021 for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients.

IDA in adult patients with NDD-CKD is an FDA-approved indication for Auryxia.

Hyperphosphatemia in DD-CKD patients is also an FDA-approved indication for Auryxia.

Hyperphosphatemia is another condition associated with CKD that is characterized by elevated serum phosphorus levels and is also typically associated with a worsening of health including increased cardiovascular risk and mortality.

Market Opportunity for Vadadustat

Anemia due to Chronic Kidney Disease

Auryxia is a non-calcium, non-chewable, orally-administered tablet marketed in the United States, Japan and Taiwan for the Hyperphosphatemia Indication, and the treatment of IDA in adult NDD-CKD patients.

Market Opportunity – Hyperphosphatemia and Iron Deficiency Anemia

Hyperphosphatemia is a metabolic disorder characterized by elevated serum phosphorus levels.

Phosphorus is a vital element required for most cellular processes and, in individuals with normal kidney function, excess dietary phosphorus is removed by the kidneys and excreted in urine.

In adults with functioning kidneys, normal serum phosphorus levels are 2.5 to 4.5 mg/dL.

In adults with DD-CKD, elevated phosphorus levels, or hyperphosphatemia, can be associated with adverse effects, including increased risk for cardiovascular disease, bone disease and death.

Phosphate binders are the only interventions marketed for the treatment of hyperphosphatemia.

According to the U.S.

Renal Data System, or USRDS, 2022 Annual Data Report, there were nearly 558,000 patients in the United States on dialysis in 2020, of which approximately 80% were treated with a phosphate binder.

Phosphate binders need to be taken with meals and snacks, and it is not uncommon for DD-CKD patients to be prescribed as many as 12 or more phosphate binder pills per day, among other medications.

Patients taking phosphate binders also experience gastrointestinal tolerability issues.

As a result of the pill burden and tolerability issues associated phosphate binders, prescribed phosphate binders are often intolerable for many patients, leading to lack of treatment adherence and compliance.

In addition, in 2020 approximately 44% of patients treated with a phosphate binder were treated solely with a calcium-based binder, which can lead to side effects such as increased cardiovascular risk, hypercalcemia and gastrointestinal-related adverse events.

Due to the risks associated with calcium-based binders, in 2017 Kidney Disease:

Improving Global Outcomes, or KDIGO, recommended that clinicians limit the use of calcium-based binders.

Sevelamer and lanthanum-based phosphate binders are other alternatives.

Lanthanum is a rare earth element and is minimally absorbed in the gastrointestinal tract.

Lower level tissue deposition, particularly in bone and liver, has been observed in animals, however, the long-term, potentially harmful, effects due to the accumulation of lanthanum in these tissues have not been clearly

Alternatively, sucroferric oxyhydroxide, sold under the brand name Velphoro, is a non-calcium, iron-based phosphate binder that is a chewable tablet used for the control of serum phosphorus levels.

Aluminum-type phosphate binders were widely used in the past.

However, the systemic absorption of aluminum from these agents and the potential toxicity associated with their use no longer make this type of binder a viable long-term treatment option.

In addition, other agents are in development, including OPKO Health Inc.’s Alpharen™ Tablets (fermagate tablets) and Unicycive’s Renazorb (lanthanum dioxycarbonate) or could otherwise enter the market, including Ardelyx, Inc.’s tenapanor (which is approved in the United States for the treatment of adults with irritable bowel syndrome with constipation, and for which the FDA granted an appeal in the fourth quarter of 2022 that will allow Ardelyx to resubmit a new drug application in 2023 with respect to the control of serum phosphorus in adult patients with CKD on dialysis) , that may impact the market for Auryxia.

Anemia is a condition characterized by abnormally low levels of hemoglobin.

Hemoglobin is contained within RBCs and carries oxygen to other parts of the body.

If there are too few RBCs or if hemoglobin levels are low, the cells in the body will not get enough oxygen.

IDA is a common form of anemia that is caused by patients not having enough iron to manufacture healthy RBCs.

Although anyone can develop IDA, IDA is particularly common in patients with NDD-CKD.

IDA is associated with fatigue, lethargy, decrease quality of life, cardiovascular complications, hospitalizations and increased mortality.

We estimate that there are more than 500,000 adult patients in the United States with NDD-CKD diagnosed with IDA and managed by a nephrologist.

Currently, there are two forms of iron therapy used to treat IDA:

oral iron supplements and iron delivered via intravenous infusion, or IV iron.

Oral iron is currently the first-line iron replacement therapy for most physicians;

however, oral iron supplements are poorly absorbed by many patients, which may adversely impact their effectiveness, and are associated with certain side effects, such as constipation, diarrhea and cramping, that may adversely affect patient compliance.

IV iron is viewed as an effective treatment;

however, like other intravenous medicines, it is logistically difficult to administer in an office setting, where NDD-CKD patients are more often treated.

Commercialization

We market Auryxia in the United States through our well-established, nephrology-focused sales force and commercial organization.

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

We have gained access for Auryxia in the United States in both Medicare Part D and commercial channels.

Auryxia is currently covered for the Hyperphosphatemia Indication in nine of the ten largest Medicare Part D plans, which provide coverage for approximately 35.8 million people, and the ten largest commercial plans and pharmacy benefit managers in the United States, which provide coverage for approximately 131.0 million people.

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

While this decision does not impact CMS coverage of the Hyperphosphatemia Indication, it requires all Auryxia prescriptions for Medicare patients to undergo a prior authorization to ensure their use in the Hyperphosphatemia Indication.

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

In recognition of the evolution of chronic kidney care to value-based reimbursement and care delivery, in late 2022 we shifted our commercial model to align to customer objectives.

The team of key account managers are focused on high value individual prescribers that represent approximately 70% of Auryxia prescribing and 40% of the overall binder market potential.

The team also focuses on large group practices that are part of the Comprehensive Kidney Care Contracting, or CKCC.

These entities are focused on delivering coordinated, cost-effective care for advanced CKD patients, including those receiving dialysis.

This customer group requires different clinical and economic rationale for supporting product use in protocols and formularies.

Therefore, we have aligned key account managers to these high-volume, value-based care organizations.

We believe this model will be more aligned to our customers’ needs and recognition of our product’s value proposition.

JT, and its subsidiary, Torii, market Riona in Japan.

We receive tiered double-digit royalties from JT and Torii bas ed on their sales in Japan.

Market Opportunity

Anemia is common in patients with CKD, and its prevalence increases with disease progression.

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Left untreated, anemia accelerates overall deterioration of patient health with increased morbidity and mortality.

Based on third party prevalence data and company estimates, potentially 37 million people in the United States have CKD and approximately 5.7 million of these individuals suffer from anemia.

The current standard of care for anemia due to CKD is treatment by injectable recombinant human ESAs, such as Epogen ® (epoetin alfa), Aranesp ® (darbepoetin alfa) and Mircera ® (methoxy polyethylene glycol-epoetin beta) , or blood transfusion.

Based on third party prevalence data and company estimates, approximately 5.7 million people in the United States with CKD suffer from anemia.

According to the USRDS 2022 Annual Data Report, there were nearly 558,000 patients in the United States on dialysis in 2020, of which 86% were on in-center hemodialysis and the remainder on home dialysis, which includes both peritoneal dialysis and home hemodialysis.

The current standard of care for anemia due to CKD is treatment by injectable recombinant human erythropoiesis-stimulating agents, or ESAs, such as Epogen® (epoetin alfa), Aranesp® (darbepoetin alfa) and Mircera® (methoxy polyethylene glycol-epoetin beta), or blood transfusion.

Based on publicly available information on ESA sales and market data compiled by a third-party vendor, global sales of injectable ESAs for all uses were estimated to be approximately $10 billion in 2022.

The vast majority of these sales are believed to have been for the treatment of anemia due to CKD.

In Europe, within the EU5, which refers to the five largest markets in Europe or France, Germany, Italy, Spain, and England, more than 200,000 dialysis patients are diagnosed with anemia due to CKD and are treated with ESAs.

When administered to a patient, injectable ESAs provide supraphysiological levels of exogenous EPO to stimulate production of RBCs.

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In particular, injectable ESAs may lead to thrombosis, stroke, myocardial infarction and death.

Also, several randomized clinical trials have demonstrated that higher hemoglobin targets

(≥13.0 g/dL) with ESA use are associated with increased cardiovascular risk, leading to changes in regulatory and clinical practice guidance.

Also, several randomized clinical trials have demonstrated that higher hemoglobin targets (≥13.0 g/dL) with ESA use are associated with increased cardiovascular risk, leading to changes in regulatory and clinical practice guidance.

While these safety concerns, which became evident starting in 2006, have led to a significant reduction in the use of injectable ESAs, and an increase in the use of injectable iron, injectable ESAs remain the current standard of care for both DD-CKD and NDD-CKD patients with anemia.

DD-CKD Market

We believe there is a significant opportunity for vadadustat to address limitations of injectable ESAs and become the new oral standard of care for the treatment of anemia due to CKD in DD-CKD adult patients, if approved.

In addition to clinical data from our Phase 3 INNO 2 VATE program that showed vadadustat was non-inferior to darbepoetin alfa with respect to hematological efficacy (change in hemoglobin concentration) and cardiovascular safety (MACE) in DD-CKD adult patients, we believe the potential opportunity for vadadustat within the DD-CKD market is supported by a number of factors including vadadustat's convenient oral dosing and unique U.S.

dialysis market dynamics.

According to the U.S.

Renal Data System, or USRDS, 2020 Annual Data Report, there were approximately 556,000 patients in the United States on dialysis in 2018, of which 88% were on in-center hemodialysis and the remainder on home dialysis, which includes both peritoneal dialysis and home hemodialysis.

We believe there is a significant opportunity for vadadustat to address limitations of injectable ESAs and become a new oral option for the treatment of anemia due to CKD in DD-CKD adult patients, if approved.

Further, in February 2023 the FDA approved daprodustat, an oral HIF-PH inhibitor marketed as Jesduvroq by GlaxoSmithKline plc, or GSK, as a once-a-day treatment of anemia due to CKD in adult patients who have been receiving dialysis for at least four months.

Injectable ESAs are administered by dialysis center staff to approximately 90% of in-center hemodialysis patients and 75% of home dialysis patients.

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Given the concentration of dialysis clinics in large networks, with DaVita, Inc., or DaVita, and Fresenius Kidney Care Group accounting for a vast majority of the dialysis population in the United States, treatment is usually driven by medical protocols that are implemented across the entire network of clinics.

These protocols are informed by very large data sets and when

updated, result in rapid change applicable to large segments of the patient population.

This is particularly true of medications covered under the End Stage Renal Disease, or ESRD, Prospective Payment System, or PPS, in Medicare, or the ESRD Bundle, a payment structure with a flat base rate per dialysis session adjusted for individual patient and facility characteristics.

These protocols are informed by very large data sets and when updated, result in rapid change applicable to large segments of the patient population.

This is particularly true of medications covered under the ESRD Prospective Payment System, or PPS, in Medicare, or the ESRD Bundle, a payment structure with a flat base rate per dialysis session adjusted for individual patient and facility characteristics.

Dialysis-related drugs are included in the ESRD Bundle if they fall into functional categories such as anemia management and bone and mineral metabolism, except that oral-only drugs are exempted from inclusion until 2025.

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Although there are several details that need further clarification, and the precise timing of when we could receive codes to allow for reimbursement under TDAPA is not known, the codes are assigned on a quarterly basis, and the rule provides support for our assumption that new anemia treatments, including those in the HIF-PH inhibitor class, will be included in the ESRD Bundle and will be eligible for separate payment initially under TDAPA.

NDD-CKD Market

Data from the USRDS 2015 Annual Data Report indicate that the collective injectable ESA treatment rate in NDD-CKD patients in the United States decreased by approximately half from 2009 to 2013 as a result of the safety concerns associated with ESAs.

Today, a high proportion of NDD-CKD patients with anemia are either not treated or inadequately treated despite having low hemoglobin levels.

In contrast to treatment with ESAs, we believe vadadustat, if approved for use in NDD-CKD patients, has the potential to expand the number of NDD-CKD patients receiving treatment by offering an alternative oral treatment for anemia due to CKD.

Results from our Phase 3 PRO 2 TECT program showed vadadustat was non-inferior to darbepoetin alfa with respect to hematological efficacy in treating anemia due to CKD in NDD-CKD adult patients, meeting both the primary and key secondary hematological efficacy endpoints.

However, it did not meet the program's primary cardiovascular safety (MACE) endpoint.

We are pursuing regulatory approval for vadadustat for the treatment of anemia due to CKD in NDD-CKD adult patients;

however , as PRO 2 TECT did not meet the program's primary safety endpoint , we remain cautious in our outlook for potential approval of vadadustat as a treatment for anemia due to CKD in NDD-CKD adult patients.

Vadadustat Has the Potential to Become the New Oral Standard of Care

We believe vadadustat has the potential to become the new oral standard of care for the treatment of anemia due to CKD, if approved.

Below is a summary of certain of the key clinical findings;

further details are included in the discussion below.

• Vadadustat stimulated endogenous EPO production.

In two Phase 1 studies in normal healthy volunteers and one Phase 2 study in CKD patients, vadadustat increased serum EPO levels in a dose-dependent manner.

Pre-dose EPO levels returned to baseline levels prior to subsequent daily dose.

In these studies, vadadustat stimulated endogenous EPO production while avoiding supraphysiologic EPO levels.

• Vadadustat significantly increased and maintained hemoglobin levels.

Our global Phase 3 program and Phase 2 studies in CKD patients with anemia demonstrated that vadadustat significantly increased and/or maintained hemoglobin levels.

• Vadadustat was dosed orally once daily and three times weekly.

Our Phase 2 studies showed that vadadustat can be orally dosed once daily in NDD-CKD patients with up to 20 weeks of dosing.

This study also showed the potential for three-times weekly dosing of vadadustat in DD-CKD patients.

We are conducting additional larger studies of vadadustat evaluating three-times weekly dosing and a modified approach to once-daily dosing.

Based on this and other data, we believe vadadustat has the potential to be a treatment for anemia due to CKD and become the new oral standard of care by:

• stimulating erythropoiesis and avoiding supraphysiologic EPO levels;

• increasing hemoglobin in a predictable and controlled manner;

• minimizing hemoglobin excursions;

• providing convenient oral dosing.

Vadadustat Clinical Development Program

Commercialization

We are supporting MTPC's commercialization of vadadustat in Japan and are preparing for a potential commercial launch of vadadustat in the United States, if approved.

Our intention is to secure a partner to commercialize vadadustat in the EU and certain other countries.

If we obtain FDA approval of vadadustat for DD-CKD adult patients, we plan to commercialize vadadustat in the United States.

In February 2022, we entered into a Second Amended and Restated License Agreement, or the Vifor Second Amended Agreement, with CSL Vifor.

Pursuant to the Vifor Second Amended Agreement, we granted CSL Vifor 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.

We refer to Fresenius Medical Care North America and its affiliates, these organizations and specialty pharmacies collectively as the “Supply Group.” During the term of the Vifor Second Amended Agreement, CSL Vifor is not permitted to sell any HIF product that competes with vadadustat in the Territory to the Supply Group.

We plan to commercialize vadadustat directly with organizations outside the Supply Group.

Clinical Development Program

Below is a summary of the clinical development work undertaken for vadadustat.

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INNO 2 VATE evaluated vadadustat in adult DD-CKD patients with anemia due to CKD in two studies, and PRO 2 TECT evaluated vadadustat in adult NDD-CKD patients with anemia due to CKD in two studies.

Combined, we enrolled approximately 7,500 patients in these studies and evaluated once daily oral dosing of vadadustat against an injectable ESA active comparator, darbepoetin alfa.

Combined, we enrolled approximately 7,500 patients in these studies and evaluated a once daily oral dosing of vadadustat against an injectable ESA active comparator, darbepoetin alfa.

Both the INNO 2 VATE and PRO 2 TECT Phase 3 programs were global, multicenter, open-label, sponsor-blind, active-controlled non-inferiority programs.

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patients treated to a target Hb range of 10 to 11 g/dL, in an analysis of MACE (HR 1.06, 95% CI:

In March 2021, based on these analyses and the totality of the data from our Phase 3 program, we submitted an NDA to the FDA for vadadustat for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients .

However, a s vadadustat did not meet the PRO 2 TECT program's primary safety en dpoint, we remain cautious in our outlook for potential approval of vadadustat in adult NDD-CKD patients.

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.

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We are also conducting additional studies of vadadustat evaluating a modified approach to once-daily and three-times weekly dosing, including assessment of a vadadustat starting dose based on an individual’s pre-conversion ESA dose prior to study entry and higher titration doses of vadadustat (up to 1200 mg).

We believe data from these and other studies could support registration of the modified approach to once daily dosing and three times weekly dosing, and further strengthen our potential commercial position if vadadusta t is approved for marketing.

We expect to share topline data from these studies at an appropriate medical conference or in a peer-reviewed journal.

Hepatic Safety Profile of Vadadustat in Clinical Studies

Following the completion of our global Phase 3 clinical program for vadadustat, there was a review of hepatic safety across the vadadustat clinical program, which includes 8 completed Phase 2 and 3 studies in NDD-CKD patients, 10 completed Phase 1, 2, and 3 studies, and one ongoing Phase 3b study in patients with DD-CKD, and 18 completed studies in healthy subjects (17 Phase 1 and one Phase 3).

This review included a blinded assessment of all hepatic events in the studies by a panel of hepatic experts and analysis by an independent hepatic expert and our team.

Hepatocellular injury attributed to vadadustat was reported in less than 1% of patients;

there was one case of severe hepatocellular injury with jaundice.

All events were asymptomatic and resolved after discontinuation of vadadustat.

Commercialization

We are supporting MTPC's commercialization 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.

Our ability to launch vadadustat in the United States is dependent on the successful review of the NDA, and approval by the FDA.

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 leveraging our collaboration with Otsuka and its U.S.

nephrology commercial organization.

We granted Otsuka exclusive rights to commercialize vadadustat in Europe, China and certain other markets, subject to marketing approvals.

Otsuka submitted a MAA for vadadustat for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients to the EMA in October 2021.

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.

In addition, MTPC filed a new drug application for vadadustat for the treatment of anemia due to CKD in adult patients in Taiwan.

In addition, in February 2022, we entered into the Vifor Second Amended Agreement with Vifor Pharma, which amended and restated the Vifor First Amended Agreement.

Pursuant to the Vifor Second Amended Agreement, we granted Vifor Pharma an exclusive license to sell vadadustat to the Supply Group in the Territory.

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.

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.

For more information about our license, collaboration and strategic agreements relating to vadadustat, see Part I, Item 1.

Business – License, Collaboration and Other Strategic Agreements – Vadadustat.

In February 2020, the Company entered into a letter agreement, 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, or the PRV Purchase.

A PRV entitles the holder to priority review of an NDA, or a Biologics License Application 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.

Pursuant to the Letter Agreement, we paid Vifor Pharma $10.0 million in connection with the closing of the PRV Purchase.

In March of 2021, we submitted an NDA for the treatment of anemia due to CKD in both DD-CKD and NDD-CKD adult patients.

Our NDA submission did not include a PRV.

In August 2021, we entered into an amendment to the Letter Agreement with Vifor Pharma whereby the parties agreed that Vifor Pharma would sell the PRV to a third party, and we and Vifor Pharma will share the proceeds from the sale based on certain terms.

In the fourth quarter of 2021, Vifor Pharma sold the PRV to a third party, and Vifor Pharma paid us $8.6 million in proceeds from the sale.

These proceeds were subsequently paid to Otsuka as reimbursement for their contribution to the purchase of the PRV, as required under a separate Letter Agreement executed with Otsuka.

Our Commercial Product:

Auryxia (ferric citrate) is a non-calcium, non-chewable, orally-administered tablet that was approved for marketing by the FDA in September 2014 as a phosphate binder for the Hyperphosphatemia Indication and was commercially launched in the United States shortly thereafter.

In November 2017, Auryxia received marketing approval from the FDA for a second indication, the IDA Indication, and was commercially launched for this indication in the United States shortly thereafter.

In January 2014, our Japanese sublicensee, JT, received approval from the Japanese Ministry of Health, Labour and Welfare to market ferric citrate hydrate in Japan under the trade name Riona as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and was commercially launched in Japan shortly thereafter.

In July 2019, JT, and its subsidiary, Torii, reported positive top-line results from a pivotal Phase 3 comparative study evaluating Riona for the treatment of IDA in adult patients in Japan.

In May 2020, JT and Torii filed an application for approval of IDA as an additional indication for Riona in Japan, which was approved in March 2021 .

In September 2015, we received approval to market ferric citrate in the European Union under the tradename Fexeric.

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

Although we successfully negotiated an extension to December 23, 2019, we did not commence marketing Fexeric by such date and therefore the Fexeric approval in the EU has ceased to be valid.

We have licensed and sublicensed certain intellectual property rights covering Auryxia from Panion & BF Biotech, Inc., or Panion.

For more information regarding our intellectual property rights to Auryxia and our license agreement with Panion see Part I, Item 1.

Business – Intellectual Property – Auryxia and Part I, Item 1.

Business - License, Collaboration and Other Strategic Agreements – License Agreement with Panion & BF Biotech, Inc.

We received Paragraph IV certification notice letters regarding Abbreviated New Drug Applications, or ANDAs, submitted to the FDA requesting approval for generic versions of Auryxia tablets (210 mg iron per tablet), with the first received on October 31, 2018.

We filed certain complaints for

patent infringement relating to such ANDAs, and have entered into settlement and license agreements with each of the ANDA filers.

See Part I, Item 3.

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

During the conduct of our Phase 3 program our team and hepatic experts analyzed hepatic cases (unblinded to treatment) and, following the completion of our global Phase 3 clinical program for vadadustat, there was a review of hepatic safety across the vadadustat clinical program, which included eight completed Phase 2 and 3 studies in NDD-CKD patients, 10 completed Phase 1, 2, and 3 studies, and two then-ongoing Phase 3b studies in DD-CKD patients, and 18 completed studies in healthy subjects (17 Phase 1 and one Phase 3).

This review consisted of a blinded re-assessment of hepatic events conducted by a separate panel of hepatic experts.

While hepatocellular injury attributed to vadadustat was reported in less than 1% of patients, there was one case of severe hepatocellular injury with jaundice, and we cannot guarantee that similar events will not happen in the future.

Additionally, the FDA expressed safety concerns related to the risk of drug-induced liver injury in the CRL that it issued in March 2022 .

Acute Respiratory Distress Syndrome

We have supported an investigator-sponsored study evaluating vadadustat for the prevention and treatment of ARDS in clinical trial subjects with COVID-19 and intend to develop vadadustat for the treatment of ARDS.

Market Opportunity

Hyperphosphatemia

Hyperphosphatemia is a metabolic disorder characterized by elevated serum phosphorus levels.

Phosphorus is a vital element required for most cellular processes and, in individuals with normal kidney function, excess dietary phosphorus is removed by the kidneys and excreted in urine.

In adults with functioning kidneys, normal serum phosphorus levels are 2.5 to 4.5 mg/dL.

In adults with DD-CKD, elevated phosphorus levels, or hyperphosphatemia, can be associated with adverse effects, including increased risk for cardiovascular disease, bone disease and death.

Phosphate binders are the only interventions marketed for the treatment of hyperphosphatemia.

According to the USRDS 2020 Annual Data Report, there were approximately 556,000 adult patients in the United States with DD-CKD in 2018, of which approximately 80% were treated with a phosphate binder.

Phosphate binders need to be taken with meals and snacks, and it is not uncommon for DD-CKD patients to be prescribed as many as 12 or more phosphate binder pills per day, among other medications.

Patients taking phosphate binders also experience gastrointestinal tolerability issues.

In addition, in 2018 approximately 42% of patients treated with a phosphate binder were treated solely with a calcium-based binder, which can lead to side effects such as increased cardiovascular risk, hypercalcemia and gastrointestinal-related adverse events.

Due to the risks associated with calcium-based binders, in 2017 Kidney Disease:

Improving Global Outcomes, or KDIGO, recommended that clinicians limit the use of calcium-based binders.

Sevelamer and lanthanum-based phosphate binders are other alternatives.

Lanthanum is a rare earth element and is minimally absorbed in the gastrointestinal tract.

Aluminum-type phosphate binders were widely used in the past.

However, the systemic absorption of aluminum from these agents and the potential toxicity associated with their use no longer make this type of binder a viable long-term treatment option.

Iron Deficiency Anemia

Anemia is a condition characterized by abnormally low levels of hemoglobin.

Hemoglobin is contained within RBCs and carries oxygen to other parts of the body.

If there are too few RBCs or if hemoglobin levels are low, the cells in the body will not get enough oxygen.

IDA is a common form of anemia that is caused by patients not having enough iron to manufacture healthy RBCs.

Although anyone can develop IDA, IDA is particularly common in patients with NDD-CKD.

IDA is associated with fatigue, lethargy, decrease quality of life, cardiovascular complications, hospitalizations and increased mortality.

We estimate that there are more than 500,000 adult patients in the United States with NDD-CKD diagnosed with IDA.

Currently, there are two forms of iron therapy used to treat IDA:

oral iron supplements and iron delivered via intravenous infusion, or IV iron.

Oral iron is currently the first-line iron replacement therapy for most physicians;

IV iron is viewed as an effective treatment;

however, like other intravenous medicines, it is logistically difficult to administer in an office setting, where NDD-CKD patients are more often treated.

Commercialization

We market Auryxia in the United States through our well-established, nephrology-focused sales force and commercial organization.

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

We have gained access for Auryxia in the United States in both Medicare Part D and commercial channels.

Auryxia is currently covered for the Hyperphosphatemia Indication in nine of the ten largest Medicare Part D plans, which provide coverage for approximately 35.8 million people, and the ten largest

commercial plans and pharmacy benefit managers in the United States, which provide coverage for approximately 131.0 million people.

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

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

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

On October 22, 2021, the parties agreed to dismiss the litigation.

See Part I, Item 3.

Legal Proceedings for further information.

JT, and its subsidiary, Torii, market Riona in Japan.

We receive tiered double-digit royalties from JT and Torii bas ed on their sales in Japan.

Acute respiratory distress syndrome, or ARDS, is a life-threatening acute form of lung disease characterized by acute bilateral pulmonary edema, severe hypoxia.

Despite improvement in treatment strategies, a third-party study indicated high hospital mortality rates for patients with ARDS admitted to participating ICUs.

The mortality rate among patients with ARDS was:

34.9% with mild ARDS;

40.3% with moderate ARDS and 46.1% with severe ARDS.

Clinical Development Program

Vadadustat for the Prevention and Treatment of ARDS in Hospitalized Patients with Coronavirus Disease 2019, or the VSTAT trial, was an investigator-sponsored clinical trial by UTHealth in Houston, Texas, evaluating the use of vadadustat as a potential therapy to prevent and treat ARDS in adult patients who have been hospitalized due to COVID-19 and hypoxemia (O2 saturation ≤94%).

The VSTAT trial was a randomized, double-blind, placebo-controlled study, and patients were dosed with vadadustat or a placebo starting within 24 hours of hospital admission and continuing for up to 14 days.

In addition to funds provided by Akebia for the VSTAT trial, UTHealth was awarded $5.1 million in funding from the U.S.

Department of Defense, or DOD, to expand this clinical trial at UTHealth’s facilities.

The VSTAT trial enrolled 449 adult subjects at five hospitals who were randomized 1:1 to vadadustat 900 mg or placebo once per day orally for up to 14 days while hospitalized.

The VSTAT trial measured the proportion of subjects with either 6 (non-invasive ventilation or high flow oxygen devices), 7 (invasive mechanical ventilation or extracorporeal membrane oxygenation), or 8 (death) on the NIAID-OS at Day 7 and Day 14 (primary).

While a smaller proportion of subjects in the vadadustat group had a score of 6, 7, or 8 on the NIAID-OS than in the placebo group at Day 14, the trial failed to meet its primary superiority threshold of >95% probability.

Those receiving vadadustat, however, did demonstrate 94% probability of conferring benefit on the NIAID-OS at Day 14.

At Day 14, the proportions of subjects who had a 6, 7 or 8 on the NIAID-OS were 13.3% (9.6%, 17.7%;

2.5, 97.5 percentiles from Bayesian simulations) for vadadustat versus 16.9% (12.6%, 22.0%) for placebo with a relative risk of 0.79 and 94% probability that vadadustat was superior to placebo.

In a pre-specified analysis at Day 7, the proportions of subjects who had a 6, 7 or 8 on the NIAID-OS were 25.4% (20.7%, 30.5%) for vadadustat versus 29.7% (24.5%, 35.3%) for placebo with a relative risk of 0.86 and 97% probability that vadadustat was superior to placebo.

The incidence of treatment emergent adverse events was 78.6% in the vadadustat group and 76.2% in the placebo group.

The most common treatment emergent adverse events reported in vadadustat/placebo subjects were alanine aminotransferase increase (34.4%/28.7%), COVID-19 pneumonia (19.5%/27.4%), anemia (14.0%/17.0%), aspartate aminotransferase increase (14.0%/14.8%), hyponatremia (10.7%/15.7%), septic shock (11.6%/10.8%), hyperkalemia (10.2%/10.8%), and hypermagnesemia (7.0%/13.9%).

The incidence of serious treatment emergent adverse events was 27.9% in the vadadustat

group and 32.7% in the placebo group.

The most common serious treatment emergent adverse events reported in vadadustat/placebo subjects were COVID-19 pneumonia (19.5%/27.4%) and septic shock (11.6%/10.8%).

While the VSTAT trial missed the primary endpoint, we are encouraged by the data and believe the data supports further development of vadadustat as a potential treatment for ARDS due to COVID-19 or other causes.

Manufacturing and Supply

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All clinical and commercial supplies are manufactured under current Good Manufacturing Practices, or cGMPs, which is a regulatory standard for the production of pharmaceuticals that will be used in humans.

We currently have redundant supply arrangements in place for the preclinical, clinical and commercial supply of vadadustat.

We have entered into supply agreements with Esteve Química, S.A.

and STA Pharmaceutical Hong Kong Limited, or STA, for the manufacture of vadadustat drug substance for commercial use and Patheon Inc.

and STA for the manufacture of vadadustat drug product for commercial use.

We plan to mitigate potential commercial supply risks for vadadustat, if any, through inventory management and additional redundant manufacturing arrangements for both drug substance and drug product and changes may occur following the launch of vadadustat, if approved.

We currently rely on a single source supplier for our drug substance and drug product for preclinical, clinical and commercial supply of vadadustat.

We have entered into a supply agreement with STA Pharmaceutical Hong Kong Limited, or STA, for the manufacture of vadadustat drug substance for commercial use and for the manufacture of vadadustat drug product for commercial use.

We plan to mitigate potential commercial supply risks for vadadustat, if any, through inventory management and we may enter redundant manufacturing arrangements for both drug substance and drug product if vadadustat is approved in the United States.

Vadadustat is a small molecule.

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As with any supply program, obtaining raw materials and finished drug product of the required quality and quantity cannot be guaranteed, and we cannot ensure that we will be successful in this endeavor.

We currently rely on a single source supplier for our drug substance and drug product for preclinical, clinical and commercial supply of Auryxia.

We have established CMO relationships for the supply of Auryxia to help ensure that we will have sufficient material for ongoing commercial sales and clinical trials.

The drug substance for Auryxia is supplied by Siegfried Evionnaz SA (two approved sites) and BioVectra Inc.

(one approved site), pursuant to supply agreements with pricing structured on a per-kilogram ba sis.

Consistent with our previously disclosed plans to lower the cost of goods sold for Auryxia, BioVectra and Keryx entered into an Amended and Restated Product Manufacture and Supply and Facility Construction Agreement on September 4, 2020.

A uryxia drug product is supplied by Patheon Manufacturing Services LLC (Thermo Fisher) (three approved sites) pursuant to a Master Manufacturing Service Agreement with per-bottle pricing structured on a tiered basis, with the price reduced as the product volume increases.

The drug substance for Auryxia is supplied by Siegfried Evionnaz SA, pursuant to a supply agreement, as amended, with pricing structured on a per-kilogram ba sis.

A uryxia drug product is supplied by Patheon Manufacturing Services LLC (Thermo Fisher) pursuant to a Master Manufacturing Service Agreement with per-bottle pricing structured on a tiered basis, with the price reduced as the product volume increases.

These agreements require that we satisfy certain minimum purchase requirements, but we are not obligated to use them as our sole suppliers.

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License, Collaboration and Other Strategic Agreements

Collaboration with Otsuka Pharmaceutical Co.

and International Collaboration with Otsuka Pharmaceutical Co.

On December 18, 2016, we entered into a collaboration and license agreement with Otsuka, or the Otsuka U.S.

Agreement, pursuant to which we agreed to co-exclusively collaborate with Otsuka with respect to the development and commercialization of vadadustat in the United States, subject to the approval of vadadustat by the FDA.

We are responsible for leading the development of vadadustat, for which we submitted an NDA to the FDA in March of 2021.

We will co-commercialize vadadustat in the United States with Otsuka, subject to the approval of vadadustat by the FDA.

We control and retain final decision-making authority with respect to certain matters, including U.S.

pricing strategy and manufacturing.

Under the terms of the Otsuka U.S.

Agreement, Otsuka paid us an upfront payment of $125.0 million and we expect Otsuka to provide additional funding of $393.9 million or more, depending on the actual costs incurred, toward the vadadustat global Phase 3 development program.

This amount includes the Additional Funding (as defined below).

Due to the costs incurred in completing the activities under the current global development plan exceeding a certain threshold in the second quarter of 2019, we elected to require Otsuka to increase the aggregate percentage of current global development costs it funds under the Otsuka U.S.

Agreement and the Otsuka International Agreement, as defined below, from 52.5% to 80%, or the Otsuka Funding Option.

The additional funding expected to result from having exercised the Otsuka Funding Option, or the Additional Funding, is fully creditable against future payments due to us under the arrangement, provided that future payments due to us may not be reduced by more than 50% in any calendar year and any remaining creditable amount above 50% in any calendar year will be applied to subsequent future payments until fully credited.

We are eligible to receive from Otsuka up to $65.0 million in regulatory milestones and up to $575.0 million in specified commercial milestones.

The Otsuka U.S.

Agreement establishes a profit share for the commercialization of vadadustat in the United States.

The parties will equally share all net sales of vadadustat in the United States, if approved, and generally each party will bear half of all costs in the United States, including medical affairs, commercialization and manufacturing costs.

Under the Otsuka U.S.

Agreement, we and Otsuka will jointly conduct all medical affairs and commercialization activities pursuant to plans agreed to by the parties.

We will remain responsible for manufacturing vadadustat.

Additionally, the parties agreed not to promote, market or sell any competing product in the territory covered by the agreement.

Unless earlier terminated, the Otsuka U.S.

Agreement will expire in the United States on a product-by-product basis on the date that one or more generic versions of vadadustat first achieves 90% market penetration.

Either party may terminate the Otsuka U.S.

Agreement in its entirety upon an uncured breach or insolvency on the part of the other party.

Otsuka may terminate the Otsuka U.S.

Agreement in its entirety upon 12 months’ prior written notice at any time after the release of the first top-line data from the global Phase 3 development program for vadadustat, which release occurred in the second quarter of 2020.

International Collaboration with Otsuka Pharmaceutical Co.

The collaboration was focused on the development and commercialization of vadadustat in the United States.

We were responsible for leading the development of vadadustat, for which we submitted an NDA to the FDA in March 2021, and for which we received the CRL in March 2022.

On April 25, 2017, we entered into a collaboration and license agreement with Otsuka, or the Otsuka International Agreement, pursuant to which we granted Otsuka an exclusive license for the development and commercialization of vadadustat in certain territory outside the United States.

The territory covered by the Otsuka International Agreement includes the European Union, Russia, China, Australia, Canada, the Middle East and certain other countries, or the Otsuka International Territory, but excludes Latin America and previously licensed jurisdictions.

Under the Otsuka International Agreement, Otsuka is responsible for certain development activities and commercializing vadadustat in the Otsuka International Territory, while we led the global Phase 3 development program of vadadustat, and Otsuka submitted a MAA with the EMA in October 2021.

Otsuka will fund a significant percentage of the costs of such global development program regardless of the total actual costs ultimately incurred.

Additionally, the parties agreed not to promote, market or sell any competing product in the territory covered by the agreement.

Under the terms of the Otsuka International Agreement, we expect Otsuka to pay us at least $317.7 million, comprised of $73.0 million that was paid upon execution of the Otsuka International Agreement and $244.8 million or more, depending on actual costs incurred, of development funding.

In addition, we are eligible to receive from Otsuka up to $17.0 million in regulatory milestones for the licensed HIF product if we achieve the associated event within 12 to 24 months of the first HIF product approval and up to $525.0 million in commercial milestones.

Otsuka also agreed to make tiered, escalating royalty payments ranging from low double digits up to thirty percent of net sales of vadadustat within the Otsuka International Territory.

In limited circumstances, upper tier royalties may be subject to reduction if the supply price charged by us to Otsuka for vadadustat exceeds certain agreed upon thresholds, and royalty payments may also be reduced if a generic product is launched, on a country-by-country basis.

Otsuka may elect to conduct additional studies of vadadustat in the European Union, subject to our right to delay such studies based on our objectives outside the Otsuka International Territory.

Otsuka will pay a percentage of the costs of any such studies, and we will pay its portion of the costs in the form of a credit against future amounts due to us under the Otsuka International Agreement.

Unless earlier terminated, the Otsuka International Agreement will expire upon the expiration of the royalty term in the last country in the Otsuka International Territory.

Either party may terminate the Otsuka International Agreement in its entirety upon an uncured material breach or insolvency on the part of the other party.

Otsuka may terminate the Otsuka International Agreement in its entirety or for a specific region in the Otsuka International Territory upon 12 months’ prior written notice at any time after the release of the first top-line data from the global Phase 3 development program for vadadustat, which release occurred in the second quarter of 2020.

The territory covered by the Otsuka International Agreement included the European Union, Russia, China, Australia, Canada, the Middle East and certain other countries, or the Otsuka International Territory, but excluded Latin America and previously licensed jurisdictions.

Under the terms of the Otsuka U.S.

Agreement, Otsuka paid us an upfront payment of $125.0 million and additional funding of $353.0 million, based on the actual costs incurred, toward the vadadustat global Phase 3 development program.

Under the terms of the Otsuka International Agreement, Otsuka paid us $289.9 million, comprised of $73.0 million that was paid upon execution of the Otsuka International Agreement and $216.9 million, based on actual costs incurred, of development funding.

On May 12, 2022, we received notice from Otsuka that it had elected to terminate the Otsuka U.S.

Agreement and the Otsuka International Agreement (as defined below).

On June 30, 2022, we and Otsuka entered into the Termination Agreement (as defined below), pursuant to which, among other things, we and Otsuka agreed to terminate, as of June 30, 2022, the Otsuka U.S.

Agreement and the Otsuka International Agreement.

In July 2022, we received a nonrefundable and non-creditable payment of $55.0 million in consideration for the covenants and agreements set forth in the Termination Agreement, including the settlement and release of all disputes and claims as provided therein.

Also pursuant to the Termination Agreement, Otsuka has transferred the MAAs for vadadustat with the EMA, and in the United Kingdom, Switzerland and Australia to us.

Collaboration with Mitsubishi Tanabe Pharma Corporation

On December 11, 2015, we entered into a collaboration agreement with MTPC, or the MTPC Agreement, providing MTPC with exclusive development and commercialization rights to vadadustat in Japan and certain other Asian countries, or the MTPC Territory.

In addition, we will supply vadadustat to MTPC for both clinical and commercial use in the MTPC Territory, subject to MTPC’s option to manufacture commercial drug product in the MTPC Territory.

On July 15, 2020, we entered into a supply agreement with MTPC for the commercial supply of vadadustat for use in Japan and certain other Asian countries, as contemplated by the MTPC Agreement.

On July 15, 2020, we entered into a supply agreement with MTPC for the commercial supply of vadadustat for use in Japan and certain other Asian countries, as contemplated by the MTPC Agreement, which was amended effective as of December 5, 2022.

We and MTPC agreed that, instead of including Japanese patients in our global Phase 3 program for vadadustat, MTPC would be the sponsor of a Phase 3 program for vadadustat in Japan.

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In August 2020, MTPC launched vadadustat commercially in Jap an under the trade name, Vafseo TM , as a treatment of anemia due to CKD for adult patients on dialysis and not on dialysis.

In January 2022, MTPC filed a new drug application for vadadustat for the treatment of anemia due to CKD in adult patients in Taiwan .

MTPC filed a new drug application for vadadustat for the treatment of anemia due to CKD in adult patients in Taiwan in January 2022 and in Korea in March 2022.

Unless earlier terminated, the MTPC Agreement will continue in effect on a country-by-country basis until the later of the following:

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Financial Statements and Supplementary Data of this Annual Report on Form 10-K.

Vifor Pharma License Agreement

On February 18, 2022, we entered into the Vifor Second Amended Agreement with Vifor Pharma, which amended and restated the Vifor First Amended Agreement.

Pursuant to the Vifor Second Amended Agreement, we granted Vifor Pharma an exclusive license to sell vadadustat to the Supply Group in the Territory.

CSL Vifor License Agreement

On February 18, 2022, we entered into the Vifor Second Amended Agreement with CSL Vifor, which amended and restated the Vifor First Amended Agreement.

Pursuant to the Vifor Second Amended Agreement, we granted CSL Vifor an exclusive license to sell vadadustat to the Supply Group in the Territory.

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.

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.

Like the Vifor First Amended Agreement, the Vifor Second Amended Agreement is structured as a profit share arrangement between us and Vifor Pharma in which we will receive approximately 66% of the profit, net of certain pre-specified costs.

Under the Vifor First Amended Agreement, Vifor Pharma will make an upfront payment to us of $25 million in lieu of the previously disclosed milestone payment of $25 million that Vifor Pharma was to pay to us following approval of vadadustat by the FDA.

In addition, Vifor Pharma made an equity investment in us, as further described below.

During the term of the Vifor Second Amended Agreement, CSL Vifor is not permitted to sell any HIF product that competes with vadadustat in the Territory to the Supply Group.

Like the Vifor First Amended Agreement, the Vifor Second Amended Agreement is structured as a profit share arrangement between us and CSL Vifor in which we will receive approximately 66% of the profit, net of certain pre-specified costs.

Under the Vifor First Amended Agreement, CSL Vifor made an upfront payment to us of $25 million in lieu of the previously disclosed milestone payment of $25 million that CSL Vifor was to pay to us following approval of vadadustat by the FDA.

In addition, CSL Vifor made an equity investment in us, as further described below.

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.

As under the Vifor First Amended Agreement, 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.

As under the Vifor First Amended Agreement, the Vifor Second Amended Agreement provides that Akebia and Vifor Pharma will enter into a commercial supply agreement for vadadustat pursuant to which we will supply all of Vifor Pharma’s requirements for vadadustat in the Territory.

Under the Vifor Second Amended Agreement, Vifor Pharma will contribute $40 million to a working capital facility established to partially fund our costs of purchasing vadadustat from our contract manufacturers, which amount of funding will fluctuate, and which funding we will repay to Vifor Pharma over time.

As under the Vifor First Amended Agreement, during the term of the Vifor Second Amended Agreement, CSL Vifor is not permitted to sell any HIF product that competes with vadadustat in the Territory to the Supply Group.

As under the Vifor First Amended Agreement, the Vifor Second Amended Agreement provides that Akebia and CSL Vifor will enter into a commercial supply agreement for vadadustat pursuant to which we will supply all of CSL Vifor’s requirements for vadadustat in the Territory.

Under the Vifor Second Amended Agreement, CSL Vifor contributed $40 million to a working capital facility established to partially fund our costs of purchasing vadadustat from our contract manufacturers, which amount of funding will fluctuate, and which funding we are required to repay to CSL Vifor over time.

Unless earlier terminated, the Vifor Second Amended Agreement will expire upon the later of the expiration of all patents that claim or cover vadadustat or the expiration of marketing or regulatory exclusivity for vadadustat in the Territory.

Vifor Pharma may terminate the Vifor Second Amended Agreement in its entirety upon 30 months’ prior written notice after the first anniversary of the receipt of regulatory approval, if approved, from the FDA for vadadustat for dialysis-dependent CKD patients.

CSL Vifor may terminate the Vifor Second Amended Agreement in its entirety upon 30 months’ prior written notice after the first anniversary of the receipt of regulatory approval, if approved, from the FDA for vadadustat for dialysis-dependent CKD patients.

We may terminate the Vifor Second Amended Agreement in its entirety for convenience, following the earlier of a certain period of time elapsing or following certain specified regulatory events, and upon six months’ prior written notice.

If we so terminate for convenience, subject to a specified exception, we will pay a termination fee to Vifor Pharma.

If we so terminate for convenience, subject to a specified exception, we will pay a termination fee to CSL Vifor.

In addition, either party may, subject to a cure period, terminate the Vifor Second Amended Agreement in the event of the other party’s uncured material breach or bankruptcy.

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The Vifor Second Amended Agreement also continues to include a standstill provision and customary representations and warranties.

Also in connection with entering into the Vifor Second Amended Agreement, on February 18, 2022, we and Vifor Pharma entered into an Investment Agreement, or the Investment Agreement, pursuant to which we sold an aggregate of 4,000,000 shares of our common stock to Vifor Pharma for a total of $20.0 million dollars.

For more information on the Vifor Second Amended Agreement and Investment Agreement with Vifor Pharma, see Note 18 to our consolidated financial statements in Part II, Item 8.

Financial Statements and Supplementary Data of this Annual Report on Form 10-K.

Also in connection with entering into the Vifor Second Amended Agreement, on February 18, 2022, we and CSL Vifor entered into an Investment Agreement, or the Investment Agreement, pursuant to which we sold an aggregate of 4,000,000 shares of our common stock to CSL Vifor for a total of $20.0 million dollars.

Janssen Pharmaceutica NV Research and License Agreement

On February 9, 2017, we entered into a Research and License Agreement, the Janssen Agreement, with Janssen Pharmaceutica NV, or Janssen, a subsidiary of Johnson & Johnson, pursuant to which Janssen granted us an exclusive license under certain intellectual property rights to develop and commercialize worldwide certain HIF prolyl hydroxylase targeted compounds.

Under the terms of the Janssen Agreement, Janssen granted us a license for a three-year research term to conduct research on the HIF compound portfolio, which research term is now expired.

During the research term, we could designate one or more compounds as candidates for development and commercialization.

Once a compound was designated for development and commercialization, we were to be solely responsible for the development and commercialization of the compound worldwide at our own cost and expense.

Under the terms of the Janssen Agreement, we paid an upfront payment of $1.0 million in cash to Janssen and issued a warrant to purchase 509,611 shares of our common stock, which expired on February 9, 2022.

In addition, Janssen could be eligible to receive up to an aggregate of $16.5 million from us in specified development milestone payments on a product-by-product basis.

Janssen will also be eligible to receive up to $215.0 million from us in specified commercial milestones as well as tiered, escalating royalties ranging from a low to mid-single digit percentage of net sales, on a product-by-product basis, and subject to reduction upon expiration of patent rights or the launch of a generic product in the territory.

Unless earlier terminated, the Janssen Agreement will expire on a product-by-product and country-by-country basis upon the expiration of the last royalty term, which ends upon the longer of the expiration of the patents licensed under the Janssen

Agreement, the expiration of regulatory exclusivity for such product, or 10 years from first commercial sale of such product.

We may terminate the Janssen Agreement in its entirety or only with respect to a particular licensed compound or product upon 180 days’ prior written notice to Janssen.

The parties also have customary termination rights, subject to a cure period, in the event of the other party’s material breach of the Janssen Agreement or in the event of certain additional circumstances.

As discussed above, we issued a Common Stock Purchase Warrant, or the Warrant, to Johnson & Johnson Innovation – JJDC, Inc., or JJDC, an affiliate of Janssen, for 509,611 shares of our common stock at an exercise price of $9.81 per share.

The Warrant was issued without registration under the Securities Act of 1933, as amended, or the Securities Act.

The Warrant was exercisable by JJDC, in whole or in part, at any time prior to February 9, 2022.

We recorded the fair value of the Warrant in the amount of $3.4 million to additional paid-in capital and research and development expense in March 2017.

On August 1, 2022, we notified Janssen that we were exercising our right to terminate the Janssen Agreement in its entirety, and Janssen agreed to the termination which became effective on August 2, 2022.

Cyclerion Therapeutics License Agreement

On June 4, 2021, we entered into the Cyclerion Agreement with Cyclerion, pursuant to which Cyclerion granted us an exclusive global license under certain intellectual property rights to research, develop and commercialize praliciguat, an investigational oral sGC stimulator.

On June 4, 2021, we entered into the Cyclerion Agreement with Cyclerion Therapeutics, Inc., or Cyclerion, pursuant to which Cyclerion granted us an exclusive global license under certain intellectual property rights to research, develop and commercialize praliciguat, an investigational oral soluble guanylate cyclase, or sGC, stimulator.

Under the terms of the Cyclerion Agreement, we made an upfront payment of $3.0 million in cash to Cyclerion, which was paid during the second quarter of 2021.

In addition, Cyclerion is eligible to receive up to an aggregate of $222.0 million from us in specified development and regulatory milestone payments on a product-by-product basis.

Cyclerion will also be eligible to receive specified commercial milestones as well as tiered royalties ranging from a mid-single-digit to mid-teen percentage of net sales, on a product-by-product basis, and subject to reduction upon expiration of patent rights or the launch of a generic product in the territory.

Cyclerion will also be eligible to receive specified commercial milestones as well as tiered royalties ranging from a mid-single-digit to mid-teen percentage of

net sales, on a product-by-product basis, and subject to reduction upon expiration of patent rights or the launch of a generic product in the territory.

We recorded the upfront payment in the amount of $3.0 million to research and development expense in June 2021.

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License Agreement with Panion & BF Biotech, Inc.

Prior to the Merger, Keryx entered into a license agreement, or the Panion License Agreement, which was amended from time to time, with Panion & BF Biotech, Inc., or Panion, under which Keryx in-licensed the exclusive worldwide rights, excluding certain Asian-Pacific countries, or the Licensor Territory, for the development and commercialization of ferric citrate.

Prior to the merger, or the Merger, whereby Keryx Biopharmaceuticals, Inc., or Keryx, became our wholly owned subsidiary, Keryx entered into a license agreement, or the Panion License Agreement, which was amended from time to time, with Panion & BF Biotech, Inc., or Panion, under which Keryx in-licensed the exclusive worldwide rights, excluding certain Asian-Pacific countries, or the Licensor Territory, for the development and commercialization of ferric citrate.

On April 17, 2019, we and Panion entered into a second amended and restated license agreement, or the Panion Amended License Agreement, which amends and restates in full the Panion License Agreement.

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The Panion Amended License Agreement also provides that, on a country-by-country basis, during the term and until the second anniversary of the expiration of our or Panion’s obligation, as applicable, to pay royalties in a country in which such party has ferric citrate for sale on the date of such expiration, neither the other party nor its affiliates will, directly or indirectly, sell, distribute or otherwise commercialize or supply or cause to supply ferric citrate to a third party for sale or distribution in such country.

In addition, the

Panion Amended License Agreement provides that each of us and Panion has the right, but not the obligation, to conduct litigation against any infringer of certain patent rights under the Panion Amended License Agreement in certain territories.

In addition, the Panion Amended License Agreement provides that each of us and Panion has the right, but not the obligation, to conduct litigation against any infringer of certain patent rights under the Panion Amended License Agreement in certain territories.

During the year-ended December 31, 2022, Panion earned $13.8 million in royalty payments relating to the sales of Auryxia in the United States and JT and Torii net sales of Riona in Japan, as we are required to pay a mid-single digit percent of JT and Torii’s net sales of Riona in Japan to Panion under the terms of the Panion Amended License Agreement.

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In May 2020, JT and Torii filed an application for approval of IDA as an additional indication for Riona in Japan.

Under the terms of the Revised Agreement with JT and Torii, we are eligible to receive royalty payments based on a tiered low double-digit percentage of net sales of Riona in Japan inclusive of amounts that we must pay to Panion on JT and Torii’s net sales of Riona under the Panion Amended License Agreement, subject to certain reductions upon expiration or termination of the Panion Amended License Agreement, and may also receive up to an additional $55.0 million upon the achievement of certain annual net sales milestones.

Under the terms

of the Revised Agreement with JT and Torii, we are eligible to receive royalty payments based on a tiered low double-digit percentage of net sales of Riona in Japan inclusive of amounts that we must pay to Panion on JT and Torii’s net sales of Riona under the Panion Amended License Agreement, subject to certain reductions upon expiration or termination of the Panion Amended License Agreement, and may also receive up to an additional $55.0 million upon the achievement of certain annual net sales milestones.

We recorded $5.3 million in license revenue related to royalties earned on net sales of Riona in Japan during the twelve months ended December 31, 2022.

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Even once patents successfully issue, third parties may challenge the validity, enforceability, inventorship, or scope thereof, which may result in such patents being narrowed, invalidated or held not infringed or unenforceable.

For this and more comprehensive risks related to our intellectual property, please see “Risk Factors—Risks Related to Our Intellectual Property.”

For this and more comprehensive risks related to our intellectual property, please see “Risk Factors—Risks Related to Our Intellectual Property” in Part I, Item 1A.

Risk Factors.

Individual patents extend for varying periods of time depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained.

Generally, patents issued from applications filed in the United States are effective for 20 years from the earliest filing date of a United States non-provisional application or an international application filed under the Patent Cooperation Treaty.

In addition, in certain instances, a patent term can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period,

however, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval.

In addition, in certain instances, a patent term can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period, however, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval.

The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest international filing date.

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Furthermore, our competitors may be able to independently develop and commercialize similar drugs or duplicate our technology, business model or strategy without infringing our patents.

Because of the extensive time required for clinical development and regulatory review of a drug we may develop, it is possible that, before any of our drugs can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.

expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.

The patent positions for vadadustat and Auryxia are summarized below.

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We have ongoing opposition and invalidity proceedings relating to vadadustat.

See Part II, Item 3.

See Part I, Item 3.

Legal Proceedings for further information relating to these matters.

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Ltd., or Torii, we have exclusively sublicensed certain Japanese patent rights to JT and Torii.

These sublicensed rights include several Japanese patents and pending patent applications with composition of matter claims and methods of use claims covering Riona, the trade name under which JT and Torii market ferric citrate in Japan.

These sublicensed rights include several Japanese patents and pending patent applications with composition of matter claims, methods of synthesizing claims, and methods of use claims covering Riona, the trade name under which JT and Torii market ferric citrate in Japan.

The expected expiration dates for these patents and pending patent applications are between 2025 and 2027.

To date, to our knowledge, no contested proceedings or third-party claims have been lodged against any of these Japanese patents.

We received Paragraph IV certification notice letters regarding ANDAs submitted to the FDA requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet), filed certain complaints for patent infringement relating to such

ANDAs, and have entered into settlement and license agreements with each of the ANDA filers.

See Part II, Item 3.

Legal Proceedings for further information relating to these matters.

Pursuant to the sublicense with our European partner, Averoa, we have exclusively sublicensed certain European patent rights to Averoa.

These sublicensed rights include several European patents and pending patent applications with composition of matter claims and methods of use claims covering ferric citrate.

The expected expiration dates for these patents and pending patent applications are between 2024 and 2036.

To date, to our knowledge, no contested proceedings or third-party claims have been lodged against any of these European patents.

We received Paragraph IV certification notice letters regarding ANDAs submitted to the FDA by third parties requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet).

In response we filed certain complaints for patent infringement against five third parties, and have entered into settlement and license agreements with each of the five ANDA filers.

Each settlement agreement granted the defendants a license to market a generic version of Auryxia in the United States beginning on March 20, 2025 (subject to FDA approval), or earlier under certain circumstances customary for settlement agreements of this nature.

Other Intellectual Property Rights

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Orange Book Listing

In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent whose claims cover the applicant’s product.

In seeking approval for a drug through an NDA, sponsors are required to list with the FDA each patent whose claims cover the sponsor’s product.

Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

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An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be therapeutically equivalent to the listed drug.

Other than the requirement for bioequivalence testing, ANDA applicants are usually not required to conduct, or submit results of, nonclinical or clinical tests to prove the safety or effectiveness of their drug product.

Other than the requirement for bioequivalence testing, ANDA sponsors are usually not required to conduct, or submit results of, nonclinical or clinical tests to prove the safety or effectiveness of their drug product.

Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.

The ANDA applicant is required to make certain certifications to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book.

Specifically, the applicant must certify that:

The ANDA sponsor is required to make certain certifications to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book.

Specifically, the sponsor must certify that:

(i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product.

The ANDA applicant may also elect to submit a Section viii statement, certifying that its proposed ANDA label does not contain or carve out any language regarding the patented method-of-use, rather than certify to a listed method-of-use patent.

If the applicant does not challenge the listed patents, the ANDA will not be approved until all the listed patents claiming the referenced product have expired.

The ANDA sponsor may also elect to submit a Section viii statement, certifying that its proposed ANDA label does not contain or carve out any language regarding the patented method-of-use, rather than certify to a listed method-of-use patent.

If the sponsor does not challenge the listed patents, the ANDA will not be approved until all the listed patents claiming the referenced product have expired.

A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.

If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.

If the ANDA sponsor has provided a Paragraph IV certification to the FDA, the sponsor must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.

The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

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

Also, the ANDA will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the referenced product has expired.

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After NDA approval, owners of relevant drug patents or their agents may apply for up to a five-year patent extension for delays caused by FDA regulatory review.

The allowable patent term extension is calculated as half of the drug’s testing phase which is the time between IND submission and NDA submission, and all of the review phase, which is the time between NDA submission and approval, up to a maximum of five years.

The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence.

The allowable patent term extension is calculated as half of the drug’s testing phase which is the time between Investigational New Drug application, or IND submission and NDA submission, and all of the review phase, which is the time between NDA submission and approval, up to a maximum of five years.

The time can be shortened if the FDA determines that the sponsor did not pursue approval with due diligence.

The total patent term after the extension may not exceed 14 years from the date of approval by virtue of the patent term extension.

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The director of the USPTO must determine that approval of the drug covered by the patent for which a patent extension is being sought is likely.

We previously filed for and received interim patent term extension in accordance with 35 U.S.C.

§ 156(e)(2) for U.S.

5,753,706 until February 3, 2022.

In addition, certain jurisdictions outside of the U.S., including Japan, have provisions that provide for patent term extension.

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4964585 and 4173553.

As a result of the extension of patent term, Japanese Patents Nos.

4964585 and 4173553 will expire in November 2025 and November 2022, respectively.

As a result of the extension of patent term, Japanese Patent No.

4173553 expired in November 2022 and Japanese Patent No.

4964585 will expire in November 2025.

In the future, if and when our product candidates, including vadadustat, receive approval by the FDA or foreign regulatory authorities, we expect to apply for patent term extensions on issued patents covering those drugs, depending upon the length of the clinical trials for each product candidate and other factors.

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To compete successfully in this industry, we must identify novel and unique drugs or methods of treatment and then complete the development of those drugs as treatments in advance of our competitors.

Drugs that may compete with vadadustat, if approved, include Epogen® (epoetin alfa) and Aranesp® (darbepoetin alfa), both commercialized by Amgen, Procrit® (epoetin alfa) and Eprex® (epoetin alfa), commercialized by Johnson & Johnson in the United States and Europe, respectively, and Mircera® (methoxy PEG-epoetin beta), commercialized by Vifor Pharma in the United States and Roche Holding Ltd.

Drugs that may compete with vadadustat, if approved, include Epogen® (epoetin alfa) and Aranesp® (darbepoetin alfa), both commercialized by Amgen, Procrit® (epoetin alfa) and Eprex® (epoetin alfa), commercialized by Johnson & Johnson in the United States and Europe, respectively, and Mircera® (methoxy PEG-epoetin beta), commercialized by CSL Vifor in the United States and Roche Holding Ltd.

outside of the United States.

In addition, in the United States, the FDA approved Jesduvroq (daprodustat), an oral HIF-PHI from GSK for the once-a-day treatment of anemia due to CKD in adults who have been receiving dialysis for at least four months.

FibroGen filed an NDA for its product candidate, roxadustat, with the FDA, but the FDA issued a complete response letter indicating the FDA will not approve the NDA in its present form.

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

We and our partners may also face competition from potential new anemia therapies.

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These candidates are being developed by companies such as FibroGen Inc., or FibroGen, together with its collaboration partners, Astellas Pharma Inc.

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

and AstraZeneca PLC, JT, GSK, and Bayer HealthCare AG, or Bayer.

Furthermore, certain companies are developing potential new therapies for renal-related diseases that could potentially reduce injectable ESA utilization and thus limit the market potential for vadadustat if they are approved and launched commercially.

Other new therapies are in development for the treatment of conditions inclusive of renal anemia that may impact the market for anemia-targeted treatment.

In addition, in the United States, FibroGen filed an NDA for its product candidate, roxadustat, with the FDA, but the FDA issued a complete response letter indicating the FDA will not approve the NDA in its present form.

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

In Japan, Vafseo, which is approved for patients with CKD, including both DD-CKD and NDD-CKD, competes with roxadustat, daprodustat and enarodustat.

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In addition, Bayer HealthCare AG has submitted a new drug application for its product candidate for the treatment of renal anemia in Japan.

In China, FibroGen launched roxadustat for the treatment of anemia of DD-CKD and for the treatment of anemia due to CKD in NDD-CKD patients.

In China, FibroGen launched roxadustat for the treatment of anemia due to CKD in DD-CKD patients and for the treatment of anemia due to CKD in NDD-CKD patients.

A biosimilar is a biologic product that is approved based on demonstrating that it is highly similar to an existing, FDA-approved branded biologic product.

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Hyperphosphatemia Competition

by Shire Pharmaceuticals Group plc, and Velphoro® (sucroferric oxyhydroxide), marketed by Fresenius Medical Care North America, as well as over-the-counter calcium carbonate products such as TUMS® and metal-based options such as aluminum, lanthanum and magnesium.

Auryxia is competing in the hyperphosphatemia market in the United States with other FDA-approved phosphate binders such as Renagel® (sevelamer hydrochloride) and Renvela® (sevelamer carbonate), both marketed by Sanofi, PhosLo® and Phoslyra® (calcium acetate), marketed by Fresenius Medical Care North America, Fosrenol® (lanthanum carbonate), marketed by Shire Pharmaceuticals Group plc, and Velphoro® (sucroferric oxyhydroxide), marketed by Fresenius Medical Care North America, as well as over-the-counter calcium carbonate products such as TUMS® and metal-based options such as aluminum, lanthanum and magnesium.

Most of the phosphate binders listed above are now also available in generic forms.

In addition, other agents are in development, including OPKO Health Inc.’s Alpharen™ Tablets (fermagate tablets) or could otherwise enter the market, including Ardelyx, Inc.’s tenapanor (which is approved in the U.S.

for the treatment of adults with irritable bowel syndrome with constipation, but for which the FDA issued a complete response letter with respect to the control of serum phosphorus in adult patients with CKD on dialysis) , that may impact the market for Auryxia.

In addition, other agents are in development, including OPKO Health Inc.’s Alpharen™ Tablets (fermagate tablets) and Unicycive’s RENAZORB™ (lanthanum dioxycarbonate) or could otherwise enter the market, including Ardelyx, Inc.’s tenapanor (which is approved in the U.S.

for the treatment of adults with irritable bowel syndrome with constipation, and which the FDA granted

Ardelyx’s appeal to the FDA’s CRL in December 2022 that will allow Ardelyx to resubmit a new drug application in 2023 with respect to the control of serum phosphorus in adult patients with CKD on dialysis), that may impact the market for Auryxia.

Iron Deficiency Anemia Competition

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In the United States, the FDA approves and regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations.

The failure to comply with applicable requirements under the FDCA and other applicable laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or other governmental entities.

Our product candidates must be approved by the FDA for therapeutic indications before we or our partners are able to market them in the United States.

An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:

A company, institution, or organization which takes responsibility for the initiation and management of a clinical development program for such products is referred to as a sponsor.

A sponsor seeking approval to market and distribute a new drug product in the United States must typically undertake the following:

• completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations and consistent with International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use, or ICH, requirements;

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• compliance with any post-approval requirements and/or commitments, including the potential requirement to implement a risk evaluation and mitigation strategy, or REMS, and potentially post-market requirement, or PMR, and post-market commitment, or PMC, studies.

Preclinical Studies

Before an applicant begins testing a product candidate with potential therapeutic value in humans, the product candidate enters the preclinical testing stage.

Preclinical Tests

Before a sponsor begins testing a product candidate with potential therapeutic value in humans, the product candidate enters the preclinical testing stage.

Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as other studies to evaluate, among other things, the toxicity of the product candidate.

The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including GLP regulations and standards and the United States Department of Agriculture’s Animal Welfare Act, if applicable .

The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND.

The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND and are generally referred to as IND-enabling studies.

Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, and long-term toxicity studies, may continue after the IND is submitted.

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An IRB must operate in compliance with FDA regulations.

An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if

the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND.

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When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval.

Specifically, the studies must be conducted in accordance with GCP, including undergoing review and receiving approval by an independent ethics committee, or IEC, and seeking and receiving informed consent from subjects.

Specifically, the studies must be conducted in accordance with GCP, including undergoing review and receiving approval by an independent ethics committee and seeking and receiving informed consent from subjects.

GCP requirements encompass both ethical and data integrity standards for clinical trials.

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Reporting Clinical Trial Results

Under the Public Health Service Act, or PHSA, sponsors of clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S.

Under the Public Health Service Act, or PHSA, sponsors of certain clinical trials of certain FDA-regulated products, including prescription drugs and biologics, are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S.

National Institutes of Health, or NIH.

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Although sponsors are also obligated to disclose the results of their clinical trials after completion, disclosure of the results can be delayed in some cases for up to two years after the date of completion of the trial.

The NIH’s Final Rule on registration and reporting requirements for clinical trials became effective in 2017, and both NIH and the FDA have recently signaled the government’s willingness to begin enforcing those requirements against non-compliant clinical trial sponsors.

The NIH’s Final Rule on registration and reporting requirements for clinical trials became effective in 2017, and both NIH and the FDA have signaled the government’s willingness to begin enforcing those requirements against non-compliant clinical trial sponsors.

Specifically, the PHSA grants the Secretary of the U.S.

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In addition to civil monetary penalties, violations may also result in other regulatory action, such as injunction and/or criminal prosecution or disqualification from federal grants.

Although the FDA has historically not enforced these reporting requirements due to HHS’s long delay in issuing final implementing regulations, those regulations have now been issued and the FDA did issue its first Notice of Noncompliance to a manufacturer in April 2021.

Although the FDA has historically not enforced these reporting requirements due to HHS’s long delay in issuing final implementing regulations, those regulations have now been issued and the FDA has issued several Notices of Noncompliance to manufacturers since April 2021.

Expanded Access to an Investigational Drug for Treatment Use

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There is no obligation for a sponsor to make its investigational products available for expanded access;

however, as required by amendments to the FDCA included in the 21st Century Cures Act, or the Cures Act, passed in 2016, if a sponsor has a policy regarding how it responds to expanded access requests with respect to product candidates in development to treat serious diseases or conditions, it must make that policy publicly available.

however, as required by amendments to the FDCA included in the 21st Century Cures Act passed in 2016, if a sponsor has a policy regarding how it responds to expanded access requests with respect to product candidates in development to treat serious diseases or conditions, it must make that policy publicly available.

Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study for a covered investigational product;

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Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program.

There is no obligation for a

drug manufacturer to make its product candidates available to eligible patients as a result of the Right to Try Act, but the manufacturer must develop an internal policy and respond to patient requests according to that policy.

There is no obligation for a drug manufacturer to make its product candidates available to eligible patients as a result of the Right to Try Act, but the manufacturer must develop an internal policy and respond to patient requests according to that policy.

Human Clinical Trials in Support of an NDA

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Human clinical trials are typically conducted in four sequential phases, which may overlap or be combined:

The product candidate is initially introduced into a small number of healthy human patients or, in certain indications such as cancer, patients with the target disease or condition (e.g., cancer) and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

The product candidate is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases and to determine dosage tolerance and optimal dosage.

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Generally, pivotal trials are Phase 3 trials, but they may be Phase 2 trials if the design provides a well-controlled and reliable assessment of clinical benefit, particularly in an area of unmet medical need.

In December 2022, with the passage of Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.

These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.

Specifically, actions plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them.

In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans.

Progress reports detailing the results of the clinical trials conducted under the IND must be submitted at least annually to the FDA and, more frequently, if serious adverse events occur.

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The guidance sets out a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include in the clinical study report (or as a separate document) contingency measures implemented to manage the study, and any disruption of the study as a result of COVID-19.

a list of all study participants affected by COVID-19-related study disruptions by a unique subject identifier and by investigational site, and a description of how the individual’s participation was altered;

and analyses and corresponding discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product and/or study, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported for the study, among other things.

The FDA has indicated that it will continue to provide any necessary guidance to sponsors, clinical investigators, and research institutions as the public health emergency evolves.

On January 30, 2023, the Biden Administration announced that it will end the public health emergency declarations related to COVID-19 on May 11, 2023.

On January 31, 2023, the FDA indicated that it would soon issue a Federal Register notice describing how the termination of the public health emergency will impact the agency’s COVID-19 related guidance, including the clinical trial guidance and updates thereto.

At this point, it is unclear how, if at all, these developments will impact our efforts to develop and commercialize our product candidates.

Pediatric Studies

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The sponsor must submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-phase 2 meeting or as may be agreed between the sponsor and the FDA.

Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.

The sponsor and the FDA must reach agreement on a final plan.

Those plans must contain an outline of the proposed pediatric study or studies the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.

The sponsor and the

FDA must reach agreement on a final plan.

A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from nonclinical trials, early phase clinical trials, and/or other clinical development programs.

For investigational products intended to treat a serious or life-threatening disease or condition, the FDA must, upon the request of an applicant, meet to discuss preparation of the initial pediatric study plan or to discuss deferral or waiver of pediatric assessments.

For investigational products intended to treat a serious or life-threatening disease or condition, the FDA must, upon the request of a sponsor, meet to discuss preparation of the initial pediatric study plan or to discuss deferral or waiver of pediatric assessments.

In addition, the FDA will meet early in the development process to discuss pediatric study plans with sponsors, and the FDA must meet with sponsors by no later than the end-of-phase 1 meeting for serious or life-threatening diseases and by no later than ninety days after the FDA’s receipt of the study plan.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

The FDA may, on its own initiative or at the request of the sponsor, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

A deferral may be granted for several reasons, including a finding that the product or therapeutic candidate is ready for approval for use in adults before pediatric trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric trials begin.

Pursuant to the Food and Drug Administration Safety and Innovation Act of 2012, or FDASIA, the FDA must send a PREA Non-Compliance letter to sponsors who have failed to submit their pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required pediatric formulation.

FDASIA further requires the FDA to publicly post the PREA Non-Compliance letter and sponsor’s response.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although FDA has recently taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.

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The fee required for the submission and review of an application under the Prescription Drug User Fee Act, or PDUFA, is substantial (for example, for fiscal year 2023 this application fee is approximately $3.2 million), and the sponsor of an approved application is also subject to an annual program fee, currently more than $393,000 per eligible prescription product.

These fees are typically adjusted annually, and exemptions and waivers may be available under certain circumstances, such as where a waiver is necessary to protect the public health, where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human therapeutic application for review.

These fees are typically adjusted annually, and exemptions and waivers may be available under certain circumstances, such as where a waiver is necessary to protect the public health, where the fee would present a significant barrier to innovation, or where the sponsor is a small business submitting its first human therapeutic application for review.

The FDA conducts a preliminary review of all applications within 60 days of receipt and must inform the sponsor at that time or before whether an application is sufficiently complete to permit substantive review.

This is known as the filing decision.

In the event that FDA determines that an application does not satisfy this standard, it will issue a Refuse to File determination to the applicant.

In the event that FDA determines that an application does not satisfy this standard, it will issue a Refuse to File determination to the sponsor.

The FDA may request additional information rather than accept an NDA for filing.

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A product that has been designated as a breakthrough therapy may also be eligible for review within six months if supported by clinical data at the time of submission of the NDA.

The review process may be extended by the FDA for three additional months to consider new information or clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

The review process may be extended by the FDA for three additional months to consider new information or clarification provided by the sponsor to address an outstanding deficiency identified by the FDA following the original submission.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured.

These pre-approval inspections may cover all facilities associated with an NDA submission, including drug component

manufacturing such as active pharmaceutical ingredients, finished drug product manufacturing, control testing laboratories, as well as packaging and labeling facilities.

These pre-approval inspections may cover all facilities associated with an NDA submission, including drug component manufacturing such as active pharmaceutical ingredients, finished drug product manufacturing, control testing laboratories, as well as packaging and labeling facilities.

The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

The PREVENT Pandemics Act, which was enacted in December 2022, clarifies that foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug or biologic undergoes further manufacture, preparation, propagation, compounding, or processing at a separate establishment outside the United States prior to being imported or offered for import into the United States.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

The applicant of the NDA may also have their records, processes, procedures, training, and other aspects reviewed during an inspection.

The sponsor of the NDA may also have their records, processes, procedures, training, and other aspects reviewed during an inspection.

The FDA must implement a protocol to expedite review of responses to inspection reports pertaining to certain drug applications, including applications for drugs in a shortage or drugs for which approval is dependent on remediation of conditions identified in the inspection report.

In addition, as a condition of approval, the FDA may require an applicant to develop a REMS.

In addition, as a condition of approval, the FDA may require a sponsor to develop a REMS.

REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks.

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The FDA reviews an application to determine, among other things, whether the product is safe and whether it is effective for its intended use(s), with the latter determination being made on the basis of substantial evidence.

The term “substantial evidence” is defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the product involved, on the basis of which it could fairly and responsibly be concluded by such experts that the product will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.”

The term “substantial evidence” is defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical

investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the product involved, on the basis of which it could fairly and responsibly be concluded by such experts that the product will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.”

The FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical investigations to establish effectiveness of a new product.

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It has not yet finalized that guidance.

After evaluating the application and all related information, including the advisory committee recommendations, if any, and inspection reports of manufacturing facilities and clinical trial sites, the FDA will issue either a Complete Response Letter, or CRL, or an approval letter.

To reach this determination, the FDA must determine that the drug is effective and that its expected benefits outweigh its potential risks to patients.

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The CRL may require additional clinical or other data, additional pivotal Phase 3 clinical trial(s) and/or other significant and time- consuming requirements related to clinical trials, preclinical studies or manufacturing.

If a CRL is issued, the applicant will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the applicant an additional six month extension to respond.

If a CRL is issued, the sponsor will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application withdrawn or, in its discretion, grant the sponsor an additional six month extension to respond.

The FDA has committed to reviewing resubmissions in response to an issued CRL in either two or six months depending on the type of information included.

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The FDA has taken the position that a CRL is not final agency action making the determination subject to judicial review.

Rather, for those seeking to challenge FDA’s CRL decision, the agency has indicated that sponsors may request a formal hearing on the CRL or they may file a request for reconsideration or a request for a formal dispute resolution.

An approval letter, on the other hand, authorizes commercial marketing of the product with specific prescribing information for specific indications.

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In addition, companies may also promote information that it consistent with the prescribing information and have the ability to proactively speak to formulary committee members of payors regarding data for an unapproved drug or unapproved uses of an approved drug under some relatively recent guidance from the FDA.

Moreover, with passage of the Pre-Approval Information Exchange Act, or PIE Act, in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product approval.

Previously, such communications were permitted under FDA guidance but the new legislation explicitly provides protection to sponsors who convey certain information about products in development to payors, including unapproved uses of approved products.

However, if a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities.

This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the

manner in which a company promotes or distributes drug products.

This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products.

The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

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The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA.

This type of application allows the applicant to rely, in part, on the FDA’s previous findings of safety and efficacy for a similar product, or published literature.

Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the applicant for approval of the application “were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.”

Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and effectiveness data that were not developed by the applicant.

This type of application allows the sponsor to rely, in part, on the FDA’s previous findings of safety and efficacy for a similar product, or published literature.

Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the sponsor for approval of the application “were not conducted by or for the sponsor and for which the sponsor has not obtained a right of reference or use from the person by or for whom the investigations were conducted.”

Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and effectiveness data that were not developed by the sponsor.

NDAs filed under Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously approved products.

If the 505(b)(2) applicant can establish that reliance on the FDA’s previous approval is scientifically appropriate, the applicant may eliminate the need to conduct certain preclinical studies or clinical trials of the new product.

If the 505(b)(2) sponsor can establish that reliance on the FDA’s previous approval is scientifically appropriate, the sponsor may eliminate the need to conduct certain preclinical studies or clinical trials of the new product.

The FDA may also require companies to perform additional studies or measurements to support the change from the approved product.

The FDA may then approve the new drug candidate for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.

Products approved under Section 505(b)(2) are often referred to as follow-on products.

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In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to be bioequivalent to, drugs previously approved by the FDA pursuant to NDAs.

To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application, or ANDA, to the agency.

To obtain approval of a generic drug, a sponsor must submit an abbreviated new drug application, or ANDA, to the agency.

An ANDA is a comprehensive submission that contains, among other things, data and information pertaining to the active pharmaceutical ingredient, bioequivalence, drug product formulation, specifications and stability of the generic drug, as well as analytical methods, manufacturing process validation data and quality control procedures.

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An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

In cases where such NCE exclusivity has been granted, a generic or follow-on drug application may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of the application.

In cases where such NCE exclusivity has been granted, a

generic or follow-on drug application may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the sponsor may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the sponsor and are essential to the approval of the application.

This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication.

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Hatch-Waxman Patent Certification and the 30-Month Stay

As part of the submission of an NDA or certain supplemental applications, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product.

As part of the submission of an NDA or certain supplemental applications, NDA sponsors are required to list with the FDA each patent with claims that cover the sponsor’s product or an approved method of using the product.

Upon approval of a new drug, each of the patents listed in the application for the drug is then published in the Orange Book.

The FDA’s regulations governing patent listings were largely codified into law with enactment of the Orange Book Modernization Act in January 2021.

When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book.

Specifically, the ANDA applicant must certify that:

When an ANDA sponsor files its application with the FDA, the sponsor is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book.

Specifically, the ANDA sponsor must certify that:

(i) the required patent information has not been filed;

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or (iv) the listed patent is invalid or will not be infringed by the new product.

Moreover, to the extent that the Section 505(b)(2) NDA applicant is relying on studies conducted for an already approved product, the applicant also is required to certify to the FDA concerning any patents listed for the NDA-approved product in the Orange Book to the same extent that an ANDA applicant would.

If the generic drug or follow-on drug applicant does not challenge the innovator’s listed patents, FDA will not approve the ANDA or 505(b)(2) application until all the listed patents claiming the referenced product have expired.

Moreover, to the extent that the Section 505(b)(2) NDA sponsor is relying on studies conducted for an already approved product, the sponsor also is required to certify to the FDA concerning any patents listed for the NDA-approved product in the Orange Book to the same extent that an ANDA sponsor would.

If the generic drug or follow-on drug sponsor does not challenge the innovator’s listed patents, FDA will not approve the ANDA or 505(b)(2) application until all the listed patents claiming the referenced product have expired.

A certification that the new generic product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.

If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA owner and patent holders once the ANDA has been accepted for filing by the FDA.

If the ANDA sponsor has provided a Paragraph IV certification to the FDA, the sponsor must also send notice of the Paragraph IV certification to the NDA owner and patent holders once the ANDA has been accepted for filing by the FDA.

The NDA owner and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

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Pediatric Studies and Exclusivity

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing patent or regulatory exclusivity, including the non-patent and orphan exclusivity.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, for drug products, provides for the attachment of an additional six months of marketing protection to the term of any existing patent or regulatory exclusivity, including the non-patent and orphan exclusivity.

This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

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This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

With regard to patents, the six-month pediatric exclusivity period will not attach to any patents for which an ANDA or 505(b)(2) applicant submitted a paragraph IV patent certification, unless the NDA sponsor or patent owner first obtains a court determination that the patent is valid and infringed by the proposed product.

With regard to patents, the six-month pediatric exclusivity period will not attach to

any patents for which an ANDA or 505(b)(2) sponsor submitted a Paragraph IV patent certification, unless the NDA sponsor or patent owner first obtains a court determination that the patent is valid and infringed by the proposed product.

Patent Term Restoration and Extension

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HIPAA also imposes certain obligations on the business associates of covered entities that obtain protected health information in providing services to or on behalf of covered entities.

While we are not a covered entity and thus HIPAA does not directly apply to us, we could be subject to penalties, including criminal penalties, if we knowingly obtain or further disclose PHI from a covered entity, such as a health care provider or clinical research site, and therefore we must ensure the proper authorizations are in place before we, or our vendors or business partners, obtain access to any PHI.

While we are not a covered entity, as a business associate, we could be subject to penalties, including criminal penalties, and contractual damages if we knowingly obtain or further disclose PHI from a covered entity, such as a health care provider or clinical research site, and therefore we must ensure the proper authorizations are in place before we, or our vendors or business partners, obtain access to any PHI.

In addition to federal privacy regulations, there are a number of state laws governing confidentiality and security of health information that may be applicable to our business.

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The CCPA went into effect on January 1, 2020 and requires covered companies to provide new disclosures to California consumers, provide such consumers rights as it relates to their personal information, and allow for a new cause of action for data breaches.

Additionally, effective starting on January 1, 2023, the California Privacy Rights Act, or CPRA, will significantly modify the CCPA, including by expanding consumers’ rights, particularly with respect to certain sensitive personal information and creating new principles, such as data minimization, purpose limitation, and storage limitation.

The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.

Additionally, starting on January 1, 2023, the California Privacy Rights Act, or CPRA, significantly modified the CCPA, including by expanding consumers’ rights, particularly with respect to certain sensitive personal information and creating new principles, such as data minimization, purpose limitation, and storage limitation.

The CPRA also created a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.

The CCPA and CPRA could impact our business activities depending on how it is interpreted and exemplifies the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data and individually identifiable health information.

These provisions may apply to some of our business activities.

In addition, other states already have passed state privacy laws.

Other states will be considering these laws in the future.

In addition, other states, including Virginia, Colorado, Utah, and Connecticut already have passed state privacy laws.

Virginia’s privacy law also went into effect on January 1, 2023, and the laws in the other three states will go into effect later in 2023.

Other states will be considering these laws in the future, and Congress has also been debating a proposed federal privacy law.

These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products, if and once approved.

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The heightening compliance environment and the need to build and maintain robust and secure systems to comply with different privacy compliance and/or reporting requirements in multiple jurisdictions could increase the possibility that a healthcare company may fail to comply fully with one or more of these requirements.

If our operations are found to be in violation of any of the privacy or data security laws or regulations described above that are applicable to us, or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal, civil and administrative penalties, damages, fines, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a consent decree or similar agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any

of which could adversely affect our ability to operate our business and our results of operations.

operations are found to be in violation of any of the privacy or data security laws or regulations described above that are applicable to us, or any other laws that apply to us, we may be subject to penalties, including potentially significant criminal, civil and administrative penalties, damages, fines, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a consent decree or similar agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

To the extent that any product candidates we may develop, once approved, are sold in a foreign country, we may be subject to similar foreign laws.

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Clinical Trial Approval in the European Union

Requirements for the conduct of clinical trials in the European Union including GCP are set forth in the Clinical Trials Directive 2001/20/EC, or the Clinical Trials Directive, and the GCP Directive 2005/28/EC, or the GCP Directive.

Before the new Clinical Trials Regulation, (EU) No 536/2014, or the Clinical Trials Regulation, came into

application in January 2022, requirements for the conduct of clinical trials in the European Union including GCP were set forth in the Clinical Trials Directive 2001/20/EC, or the Clinical Trials Directive, and the GCP Directive 2005/28/EC, or the GCP Directive.

Pursuant to the Clinical Trials Directive and the GCP Directive, as amended, a system for the approval of clinical trials in the European Union has been implemented through national legislation of the EU member states.

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Furthermore, a clinical trial may only be started after a competent ethics committee has issued a favorable opinion on the clinical trial application in that country.

In April 2014, the new Clinical Trials Regulation, (EU) No 536/2014, or the Clinical Trials Regulation, was adopted.

In April 2014, the Clinical Trials Regulation was adopted.

The Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the EU.

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However, overall related timelines will be defined by the Clinical Trials Regulation.

The new Clinical Trials Regulation is scheduled to come into application on January 31, 2022, following confirmation of full functionality of the Clinical Trials Information System through an independent audit by the European Commission in mid-2020.

The Clinical Trials Regulation will come into application in all the EU Member States, repealing the current Clinical Trials Directive.

The conduct of all clinical trials performed in the EU will continue to be bound by currently applicable provisions until the new Clinical Trials Regulation becomes applicable at the end of January 2022.

According to the transitional provisions, if a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable, the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

The Clinical Trials Regulation came into application on January 31, 2022, following confirmation of full functionality of the Clinical Trials Information System through an independent audit by the European Commission in mid-2020.

The Clinical Trials Regulation came into application in all the EU Member States and repealed the previous Clinical Trials Directive.

According to the transitional provisions, if a clinical trial continues for more than three years from the day on which the Clinical Trials Regulation became applicable, the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the European Union at the EudraCT website:

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The PRIME scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.

Products from small- and medium-sized enterprises, or SMEs,

may qualify for earlier entry into the PRIME scheme than larger companies.

Products from small- and medium-sized enterprises, or SMEs, may qualify for earlier entry into the PRIME scheme than larger companies.

Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted.

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Pediatric Studies

Prior to obtaining a marketing authorization in the EU, applicants have to demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver or a deferral for one or more of the measures included in the PIP.

Prior to obtaining a marketing authorization in the EU, sponsors have to demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver or a deferral for one or more of the measures included in the PIP.

The respective requirements for all marketing authorization procedures are set forth in Regulation (EC) No 1901/2006, which is referred to as the Pediatric Regulation.

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Marketing Authorization

To obtain marketing approval of a product under EU regulatory systems, an applicant must submit a marketing authorization application, or MAA, either under a centralized or decentralized procedure.

To obtain marketing approval of a product under EU regulatory systems, a sponsor must submit a marketing authorization application, or MAA, either under a centralized or decentralized procedure.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all EU member states.

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The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.

Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP.

Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation.

In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days.

The decentralized procedure is available to applicants who wish to market a product in various EU member states where such product has not received marketing approval in any EU member state before.

The decentralized procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state designated by the applicant, known as the reference member state.

Under this procedure, an applicant submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states.

The decentralized procedure is available to sponsors who wish to market a product in various EU member states where such product has not received marketing approval in any EU member state before.

Under this procedure, a sponsor submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states.

The reference member state prepares a draft assessment report and drafts of the related materials within 210 days after receipt of a valid application.

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If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, whose decision is binding on all member states.

A marketing authorization may be granted only to an applicant established in the European Union.

A marketing authorization may be granted only to a sponsor established in the European Union.

Once the marketing authorization is obtained in all member states of the European Union and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension.

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In particular circumstances, E.U.

legislation (Article 14–a Regulation (EC) No 726/2004 (as amended by Regulation (EU) 2019/5 and Regulation (EC) No 507/2006 on Conditional Marketing Authorizations for Medicinal Products for Human Use) enables applicants to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization.

legislation (Article 14–a Regulation (EC) No 726/2004 (as amended by Regulation (EU) 2019/5) and Regulation (EC) No 507/2006 on Conditional Marketing Authorizations for Medicinal Products for Human Use) enables sponsors to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization.

Such conditional approvals may be granted for product candidates (including medicines designated as orphan medicinal products) if (1) the product candidate is intended for the treatment, prevention or medical diagnosis of seriously debilitating or life-threatening diseases;

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(3) a marketing authorization may be granted prior to submission of comprehensive clinical data provided that the benefit of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required;

(4) the risk-benefit balance of the product candidate is positive, and (5) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data.

A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new studies and with respect to the collection of pharmacovigilance data.

(4) the risk-benefit balance of the product candidate is positive, and (5) it is likely that the sponsor will be in a position to provide the required comprehensive clinical trial data.

A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new clinical studies and with respect to the collection of pharmacovigilance data.

Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions or specific obligations.

The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.

The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization, but sponsors can also request EMA to conduct an accelerated

assessment, for instance in cases of unmet medical needs.

Periods of Authorization and Renewals in the European Union

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In the European Union, innovative medicinal products authorized in the European Union on the basis of a full marketing authorization application (as opposed to an application for marketing authorization that relies on data available in the marketing authorization dossier for another, previously approved, medicinal product) are entitled to eight years of data exclusivity.

During this period, applicants for authorization of generics of these innovative products cannot rely on data contained in the marketing authorization dossier submitted for the innovative medicinal product.

During this period, sponsors for authorization of generics of these innovative products cannot rely on data contained in the marketing authorization dossier submitted for the innovative medicinal product.

Innovative medicinal products are also entitled to a total of ten years’ market exclusivity.

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Pediatric Exclusivity

If an applicant obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the European Commission, and the study results for the pediatric population are included in the product information, even when negative, the medicine is then eligible for an additional six-month period of qualifying patent

protection through extension of the term of the Supplementary Protection Certificate, or SPC, or alternatively a one year extension of the regulatory market exclusivity from ten to eleven years, as selected by the marketing authorization holder.

If a sponsor obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the European Commission, and the study results for the pediatric population are included in the product information, even when negative, the medicine is then eligible for an additional six-month period of qualifying patent protection through extension of the term of the Supplementary Protection Certificate, or SPC, or alternatively a one year extension of the regulatory market exclusivity from ten to eleven years, as selected by the marketing authorization holder.

Brexit and the Regulatory Framework in the United Kingdom

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The HMR has incorporated into the domestic law, the body of EU law instruments governing medicinal products that pre-existed prior to the U.K.’s withdrawal from the EU.

Since a significant proportion of the regulatory framework for pharmaceutical products in the U.K.

covering the quality, safety, and efficacy of pharmaceutical products, clinical trials,

marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from EU directives and

regulations, Brexit may have a material impact upon the regulatory regime with respect to the development, manufacture,

importation, approval and commercialization of our product candidates in the U.K.

For example, the U.K.

is no longer covered

by the centralized procedures for obtaining EU-wide marketing authorization from the EMA, and a separate marketing

authorization will be required to market our product candidates, including vadadustat, in the U.K.

Access Consortium

In October 2020, the MHRA joined the Access Consortium along with the Australian Therapeutic Goods Administration of Australia, Health Canada, Health Sciences Authority of Singapore and Swissmedic.

The consortium is a coalition of these regulatory authorities that work together to promote greater regulatory collaboration and alignment of regulatory requirements.

The consortium’s goal is to maximize international co-operation between partners in the consortium, reduce duplication, and increase each agency’s capacity to ensure patients have timely access to high quality, safe and effective therapeutic products.

The MHRA commenced work-sharing applications with Access partners on January 1, 2021.

Access Consortium working group members have regular meetings to exchange information on regulatory issues and challenges faced by the participating regulatory agencies, including issues on clinical trials, marketing authorizations, product manufacturing site inspections, post-marketing surveillance, joint development of technical guidelines or regulatory standards, and collaboration on information platforms.

The Access consortium has developed three authorization procedures:

the New Active Substance and Biosimilar Work Sharing Initiatives and the Generic Medicine Work Sharing Initiative.

General Data Protection Regulation

Many countries outside of the United States maintain rigorous laws governing the privacy and security of personal information.

The collection, use, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals who are located in the European Economic Area, or EEA, and the processing of personal data that takes place in the EEA, is subject to the European Union General Data Protection Regulation, or GDPR, which became effective on May 25, 2018.

The collection, use, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals who are located in the EEA, and the processing of personal data that takes place in the EEA, is subject to the European Union General Data Protection Regulation, or GDPR, which became effective on May 25, 2018.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, and it imposes heightened requirements on companies that process health and other sensitive data, such as requiring in many situations that a company obtain the consent of the individuals to whom the sensitive personal data relate before processing such data.

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The GDPR also imposes strict rules on the transfer of personal data to countries outside the EEA, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.

The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain

compensation for damages resulting from violations of the GDPR.

Compliance with the GDPR is a rigorous and time-intensive process that may increase the cost of doing business or require companies to change their business practices to ensure full compliance.

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generally and increase our costs of compliance with data privacy legislation as well as our costs of negotiating appropriate privacy and security agreements with our vendors and business partners.

Additionally, in October 2022, U.S.

President Biden signed an executive order to implement a new EU-U.S.

Data Privacy Framework, which would serve as a replacement to the EU-U.S.

Privacy Shield.

The EU initiated the process to adopt the EU-U.S.

Data Privacy Framework in December 2022.

It is unclear if and when the framework will be finalized and whether it will be challenged in court.

The uncertainty around this issue may further impact our business operations in the EU.

As with other issues related to Brexit, there are open questions about how personal data will be protected in the U.K.

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Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor.

In a final ESRD PPS rule published in November 2018, CMS confirmed that it will expand the TDAPA to all new dialysis drugs approved by the FDA after January 1, 2020.

The TDAPA provides separate payment for new drugs for two years based on the drug’s Average Sales Price, or ASP, that will be in addition to the base rate in order to facilitate the adoption of innovative therapies.

Although there are several details that need further clarification, including precise timing related to receiving codes to allow for reimbursement under TDAPA, which codes are assigned on a quarterly basis, the rule provides support for our assumption that new anemia treatments, including those in the HIF-PH inhibitor class, will be included in the ESRD Bundle and will be eligible for separate payment initially under TDAPA.

Dialysis-related drugs are included in the ESRD prospective payment system (PPS) bundled payment and are grouped into functional categories such as anemia management and bone and mineral metabolism, except that oral-only drugs are exempted from inclusion until 2025.

In a final ESRD PPS rule published in October 2019, CMS confirmed that it will expand the TDAPA to most new dialysis drugs approved by the FDA after January 1, 2020.

The TDAPA provides separate payment for eligible new drugs for two years based on the drug’s Average Sales Price, or ASP, that will be in addition to the base rate in order to facilitate the adoption of innovative therapies.

Although there are several details that need further clarification, including precise timing related to receiving codes to allow for reimbursement under TDAPA, which are assigned on a quarterly basis, the rule provides support for our assumption that new anemia treatments, including those in the HIF-PH inhibitor class, will be included in the ESRD PPS bundle and will be eligible for separate payment initially under TDAPA.

The containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus in this effort.

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• HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

• the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;

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officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment;

• the federal transparency requirements, known as the federal Physician Payments Sunshine Act (renamed the Open Payments Act), under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or ACA, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians, other healthcare providers and their immediate family members;

• the PDMA and its implementation regulations, as well as the DSCA, which regulate the distribution and tracing of prescription drugs and prescription drug samples at the federal level, and set minimum standards for the regulation of drug distributors by the states;

• the PDMA and its implementation regulations, as well as the DSCSA, which regulate the distribution and tracing of prescription drugs and prescription drug samples at the federal level, and set minimum standards for the regulation of drug distributors by the states;

• analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by third-party payors, including private insurers, and state gift ban and disclosure law requirements that differ from the federal Physician Payments Sunshine Act in terms of the nature and type of transfers of value that are reportable and the types of covered recipients.

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Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines, such as the Pharmaceutical Research and Manufacturers of America Code on Interactions with Health Care Professionals, known as the PhRMA Code.

State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

State and foreign laws also govern the privacy and security of health information in

some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Healthcare Reform

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In March 2010, the United States Congress enacted the ACA, which, among other things, includes changes to the coverage and payment for products under government health care programs.

Among the provisions of the ACA of importance to our potential drug candidates are:

• an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;

• expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

• expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans;

• addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

• expanded the types of entities eligible for the 340B drug discount program;

• established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;

• a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

• the Independent Payment Advisory Board, or IPAB, which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs.

However, the IPAB implementation has not been clearly defined.

The ACA provided that under certain circumstances, IPAB recommendations will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings;

• established the Center for Medicare and Medicaid Innovation within CMS, to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Funding has been allocated to support the mission of the Center for Medicare and Medicaid Innovation from 2011 to 2019.

Other legislative changes have been proposed and adopted since the ACA was enacted.

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These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 203.

Pursuant to the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, and subsequent legislation, these Medicare sequester reductions have been suspended through the end of March 2022.

From April 2022 through June 2022 a 1% sequester cut will be in effect, with the full 2% cut resuming thereafter.

Pursuant to the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, and subsequent legislation, these Medicare sequester reductions were suspended and reduced through the end of June 2022 but the full 2% cut has resumed as of July 2022.

Under current legislation, the actual reductions in Medicare payments may vary up to 4%.

Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

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demonstrations and waivers under Medicaid and the ACA that may reduce coverage or undermine the programs, including work requirements;

policies that undermine the Health Insurance Marketplace

or other markets for health insurance;

policies that undermine the Health Insurance Marketplace or other markets for health insurance;

policies that make it more difficult to enroll in Medicaid and under the ACA;

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That rule, however, has been subject to a nationwide preliminary injunction and, on December 29, 2021, CMS issued a final rule to rescind it.

With issuance of this rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries' access to evidence-based care.

With issuance of this

rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries' access to evidence-based care.

In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.

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Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed by the Biden administration until January 1, 2023.

The final rule would eliminate the current safe harbor drug rebates and create new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager service fees.

It originally was set to go into effect on January 1, 2022, but with passage Inflation Reduction Act has been delayed by Congress to January 1, 2032.

On July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals.

The Order directs the Department of Health and Human Services, or HHS, to create a plan within 45 days to combat “excessive pricing of prescription pharmaceuticals and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such pharmaceuticals, and to address the recurrent problem of price gouging.” On September 9, 2021, HHS released its plan to reduce pharmaceutical prices.

The Order directs HHS to create a plan within 45 days to combat “excessive pricing of prescription pharmaceuticals and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such pharmaceuticals, and to address the recurrent problem of price gouging.” On September 9, 2021, HHS released its plan to reduce pharmaceutical prices.

The key features of that plan are to:

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and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments.

More recently, on August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law by President Biden.

The new legislation has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage.

Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D.

CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.

The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation.

The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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Additionally, interactions with or on the part of our partners, collaborators, contract research organizations, vendors or other agents may also implicate the FCPA.

The FCPA also requires public companies to make and keep books and records that accurately

and fairly reflect their transactions and to devise and maintain an adequate system of internal accounting controls.

The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect their transactions and to devise and maintain an adequate system of internal accounting controls.

Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem.

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Employees and Human Capital Resources

As of December 31, 2021, we had 426 employees, all of whom were full-time.

As of December 31, 2022, we had 205 employees, all but one of whom were full-time.

None of our employees are represented by any collective bargaining unit.

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We offer competitive compensation (including base salary, incentive bonus, and long-term equity awards tied to the value of our stock price) as well as benefits packages designed to attract, motivate and reward talented individuals who possess the skills necessary to support our business objectives, assist in the achievement of our strategic goals and create value for our stockholders.

Our compensation program is designed to differentiate us from our talent competition and incentivize achievement of corporate goals, individual performance and demonstrate our corporate values.

Our compensation program is designed to differentiate us from our competition and incentivize achievement of corporate goals, individual performance and demonstrate our corporate values.

In addition, we provide development and leadership opportunities to our employees to cultivate talent throughout the Company.

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In March 2020, in response to the COVID-19 pandemic, we adjusted our workplace policies to allow employees to work from home and in 2021 we remodeled our work paradigm to one that is flexible and designed to accommodate a range of work profiles from office based, to hybrid to fully remote, to field-based, allowing us to maximize productivity and performance.

Further, in October 2021, to comply with federal, state and local mandates and guidelines, and in an effort to keep our employees safe, we announced a requirement that all of our employees be fully vaccinated by January 1, 2022, subject to medical and religious exemptions.

Recognizing the pandemic has had an impact on well-being as well as the availability of support services, we recently launched Modern Health, a platform focused on services to support employees’ and their dependents in areas such as mental, physical, financial, social and professional health, making it easier for them to get personalized care faster.

Recognizing the pandemic had an impact on well-being as well as the availability of support services, we launched Modern Health, a platform focused on services to support employees’ and their dependents in areas such as mental, physical, financial, social and professional health, making it easier for them to get personalized care faster.

We are also committed to diversity, equality and inclusion, and this is reflected in Akebia’s leadership.

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Zumwalt, are women, and women comprise approximately 45% of our senior management team.

In addition, in November 2021, we appointed Ron Frieson to our Board of Directors.

In addition, Ron Frieson has served on our Board of Directors since November 2021, increasing the diversity of our Board of Directors.

With the goal of ensuring every employee is included, supported, and treated equitably, we developed a team (IDEA – Inclusion, Diversity & Equity Alliance) to support and guide Akebia as a diverse, inclusive, and culturally intelligent workplace.

Over the past year this team has worked to identify areas for growth and education in order to develop processes, systems and actions that will enable us to continue to build an inclusive workplace and a diverse workforce.

Over the past two and a half years this team has worked with executive leadership to identify areas for growth and education and move forward several initiatives that will enable us to continue to build an inclusive workplace and a diverse workforce.

We also provide access to LinkedIn Learning, an online learning platform that recommends expert-led courses for relevant skill development for all of our employees.

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In the United States, we have a patient services program, Akebia Cares, designed to provide one-on-one support to help communicate individual benefits and available resources for patients today facing financial obstacles that keep them from accessing important medications.

We also work closely with multiple kidney patient advocacy organizations, including the National Kidney Foundation, the American Kidney Fund, the Renal Support Network and Dialysis Patient Citizens.

In 2022, we provided over $5.3 million worth of Auryxia for free to approximately 14,000 patients needing assistance.

We also support and work closely with multiple kidney patient advocacy organizations, including the National Kidney Foundation, the American Kidney Fund, the Renal Support Network, Dialysis Patient Citizens and American Association of Kidney Patients .

We believe our involvement with these organizations shows our commitment to our purpose of bettering the life of each person impacted by kidney disease.

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

What changed 10-K

Item 1. Business