What changed in this filing

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Item 1A. Risk Factors

2023-11-08 compared with 2023-08-28 · 319 added, 309 removed, 1345 unchanged (32% of the section changed)

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Since our inception, we have devoted most of our resources to research and development, including our preclinical and clinical development activities, commercializing Auryxia, and providing general and administrative support for these operations.

We have financed our operations primarily through sales of equity securities, our strategic collaborations and product revenues, a royalty monetization transaction and debt.

We have funded our operations principally through product sales, payments received from our collaboration and licensing partners, borrowings under term loans, sales of our common stock, including through our employee stock purchase plan, a working capital payment from CSL Vifor and a royalty transaction.

Prior to our merger, or the Merger , with Keryx Biopharmaceuticals, Inc., or Keryx , whereby Keryx became our wholly owned subsidiary, we had no products approved for commercial sale and had not generated any revenue from the sale of products.

We are not currently profitable, and we have incurred net losses each year since our inception, including a net loss of $11.2 million for the three months ended June 30, 2023.

As of June 30, 2023, we had an accumulated deficit of $1.6 billion.

We are not currently profitable, and we have incurred net losses each year since our inception, including a net loss of $14.5 million for the three months ended September 30, 2023.

As of September 30, 2023, we had an accumulated deficit of $1.6 billion.

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

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In May 2023, the Office of New Drugs, or OND, denied our appeal but provided a path forward for us to resubmit the NDA for vadadustat for the treatment of anemia due to CKD for dialysis dependent patients without the need for us to generate additional clinical data.

In July 2023, we held an End of Dispute Type A meeting with the FDA to align on the contents of the NDA resubmission.

We expect to resubmit the NDA by the end of the third quarter of 2023, with a potential Prescription Drug User Fee Act, or PDUFA , date that we project will be in March 2024.

There can be no assurances that we will be successful in our anticipated NDA resubmission and obtain approval for vadadustat in a timely manner, on favorable terms, or at all.

In September 2023, we filed our resubmission to our NDA, and in October 2023, the FDA acknowledged that the resubmission was complete and set a user fee goal date, or PDUFA date , of March 27, 2024.

There can be no assurances that we will obtain approval for vadadustat in a timely manner, on favorable terms, or at all.

As a result, the regulatory approval process for vadadustat in the U.S.

is highly uncertain.

We may not obtain approval at all, and if we are able to obtain approval, the expense and time to do so could adversely impact our ability to successfully commercialize vadadustat or conduct our other business operations, and our financial condition could be materially harmed .

Even if we are able to obtain approval, the expense and time to do so could adversely impact our ability to successfully commercialize vadadustat or conduct our other business operations, and our financial condition could be materially harmed .

Our ability to generate product revenue and achieve profitability depends on the overall success of Auryxia (R) , vadadustat, if approved, and any current or future product candidates, including those that may be in-licensed or acquired, which depends on several factors, including:

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

• addressing the issues identified in the CRL for vadadustat that we received from the FDA and the outcome of our anticipated NDA resubmission;

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

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

• the outcome of our resubmission to our NDA to the FDA;

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

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

• actual or perceived advantages or disadvantages of our products or product candidates as compared to alternative treatments, including their respective safety, tolerability and efficacy profiles, the potential convenience and ease of administration and cost;

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For example, in May 2023, we entered into a license agreement with MEDICE Arzneimittel Pütter GmbH & Co.

KG, or Medice, pursuant to which we granted Medice an exclusive license to develop and commercialize vadadustat for the treatment of anemia in patients with chronic kidney disease in the European Economic Area, the United Kingdom, Switzerland and Australia, or Medice Territory .

KG, or Medice, pursuant to which we granted Medice an exclusive license to develop and commercialize vadadustat for the treatment of anemia in patients with chronic kidney disease in the European Economic Area, or the EEA , the United Kingdom, Switzerland and Australia, or Medice Territory .

If Medice’s launch of vadadustat in the Medice Territory is delayed or their sales are lower than anticipated, we may not receive the revenue that we expect from Medice on the timing anticipated, or at all.

In addition, under the Second Amended and Restated License Agreement that we entered into with CSL Vifor, in February 2022, or the Vifor 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, which represents a significant portion of the market for vadadustat.

If vadadustat is approved, but CSL Vifor is not successful in commercializing vadadustat in a timely manner, or at all, our revenue related to vadadustat will be impacted.

Our ability to achieve profitability also depends on our ability to manage our expenses.

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Additionally, we may incur additional costs not currently contemplated due to events associated with or resulting from the workforce reductions or other operating expenses, including additional costs related to vadadustat and selling, general and administrative expenses.

We expect to continue to incur additional operating expenses, including additional research and development expenses to our pipeline, additional costs related to vadadustat, and research and development and selling, general and administrative expenses for ongoing development and commercialization of Auryxia, which could lead to operating losses for the foreseeable future.

We expect to continue to incur additional operating expenses, including additional research and development expenses related to our pipeline, additional costs related to vadadustat, and research and development and selling, general and

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administrative expenses for ongoing development and commercialization of Auryxia, which could lead to operating losses for the foreseeable future.

In addition to any additional costs not currently contemplated due to events associated with or resulting from the workforce reductions noted above, our ability to achieve profitability and our financial position will depend, in part, on the rate of our future expenditures, on product revenue, collaboration revenue, and our ability to obtain additional funding.

In addition, we expect to continue to incur significant expenses if and as we:

• continue our commercialization activities for Auryxia and vadadustat, if we are able to obtain marketing approval for vadadustat following our anticipated NDA resubmission, and any other product or product candidate, including those that may be in-licensed or acquired;

• address the issues identified in the CRL for vadadustat that we received from the FDA and pursue our anticipated NDA resubmission for vadadustat with the FDA;

• continue our commercialization activities for Auryxia and vadadustat, if we are able to obtain marketing approval for vadadustat following our resubmission to our NDA, and any other product or product candidate, including those that may be in-licensed or acquired;

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

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

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• maintain marketing approvals for Auryxia and vadadustat, if we are able to obtain marketing approval for vadadustat following our anticipated NDA resubmission, and any other product, including those that may be in-licensed or acquired;

• maintain marketing approvals for Auryxia and vadadustat, if we are able to obtain marketing approval for vadadustat, and any other product, including those that may be in-licensed or acquired;

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

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

• continue to repay, and pay any associated pre-payment penalties, if applicable, the senior secured term loans in an aggregate principal amount of $43.0 million as of June 30, 2023, that were made available to us pursuant to the Loan Agreement;

• continue to repay, and pay any associated pre-payment penalties, if applicable, the senior secured term loans in an aggregate principal amount of $43.0 million, or the Term Loans , as of September 30, 2023, that were made available to us pursuant to the Loan Agreement;

• make royalty, milestone or other payments under our license agreements and any future license agreements;

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

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

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

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

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In any particular quarter, the progress of our clinical development and our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

We will continue to incur substantial expenditures relating to continued commercialization and post-marketing requirements for Auryxia and vadadustat, if we are able to obtain marketing approval for vadadustat following our anticipated NDA resubmission, and any other products, including those that may be in-licensed or acquired, as well as costs relating to the research and development of any other product candidate, including those that may be in-licensed or acquired.

We will continue to incur substantial expenditures relating to continued commercialization and post-marketing requirements for Auryxia and vadadustat, if we are able to obtain marketing approval for vadadustat, and any other products, including those that may be in-licensed or acquired, as well as costs relating to the research and development of any other product candidate, including those that may be in-licensed or acquired.

Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

Our expenses could increase beyond expectations if we are required by the FDA, the European Medicines Agency, or the EMA , or other regulatory authorities, or if we otherwise believe it is necessary, to change our manufacturing processes or assays, to amend or replace our study protocols, to conduct any additional clinical trials, whether in order to obtain approval or as a post-approval study, including any additional clinical trial that we decide to conduct for vadadustat, to perform studies in addition to, different from or larger than those currently planned, if there are any delays in completing our clinical trials or if there are further delays in or issues with obtaining marketing approval for vadadustat in the United States or other jurisdictions.

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

Even though we generate product revenue from Auryxia and royalties from Riona and Vafseo in Japan and may generate revenue and royalties from the sale of any products that may be approved in the future, including those that may be in-licensed or acquired, we may never generate revenue and royalties that are significant enough for us to become and remain profitable, and we will need to obtain additional funding to continue to fund our operating plan beyond Auryxia and certain development activities, and achieve strategic growth.

We will require substantial additional financing to achieve our goals.

Our expenses could increase beyond expectations if we are required by the FDA, the European Medicines Agency, or the EMA , or other regulatory authorities, or if we otherwise believe it is necessary, to change our manufacturing processes or assays, to amend or replace our study protocols, to perform studies different from or larger than those currently planned, to conduct any additional clinical trials, whether in order to obtain approval or as a post-approval study, including any additional clinical trial that we decide to conduct for vadadustat, if there are any delays in completing our clinical trials or if there are further delays in or issues with obtaining marketing approval for vadadustat in the United States or other jurisdictions.

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Even though we generate product revenue from Auryxia and royalties from Riona and Vafseo in Japan, may generate royalties from Vafseo in Europe and other territories where it is approved, and may generate revenue and royalties from the sale of any products that may be approved in the future, including those that may be in-licensed or acquired, we may never generate revenue and royalties that are significant enough for us to become and remain profitable, and we may need to obtain additional funding to continue to fund our operating plan.

We may require substantial additional financing to achieve our goals.

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

As of June 30, 2023, our cash and cash equivalents were $53.6 million.

As of September 30, 2023, our cash and cash equivalents were $46.5 million.

We expect to continue to expend substantial amounts of cash for the foreseeable future as we continue to commercialize Auryxia;

pursue our anticipated NDA resubmission for vadadustat in the U.S.

pursue approval for vadadustat in the U.S.

with the FDA;

support the regulatory process with respect to vadadustat in Australia;

and develop and commercialize any other product or product candidate, including those that may be in-licensed or acquired.

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In addition, other unanticipated costs may arise.

Because the outcomes of our current and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of funding necessary to

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successfully complete clinical development for any current or future product candidates, including vadadustat depending on what is required to address the issues identified in the CRL for vadadustat, including the outcome of our anticipated NDA resubmission , or to complete post-marketing studies for Auryxia and vadadustat, if approved.

Because the outcomes of our current and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of funding necessary to successfully complete clinical development for any current or future product candidates, including the outcome of our NDA resubmission, or to complete post-marketing studies for Auryxia and vadadustat, if approved.

Our future capital requirements depend on many factors, including:

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

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

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

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• the costs of maintaining marketing approvals for Auryxia or any other product, including those that may be in-licensed or acquired;

• the number of generic versions of Auryxia that enter the market following loss of exclusivity for Auryxia in March 2025, and the timing of, and the magnitude of, the impact on the price of Auryxia;

• the cost of securing and validating commercial manufacturing for any of our product candidates, including those that may be in-licensed or acquired, and maintaining our manufacturing arrangements for Auryxia and vadadustat or any other product, including those that may be in-licensed or acquired, or securing and validating additional arrangements;

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

We will need to obtain substantial additional funding to fund our operating plan beyond Auryxia and certain development activities, and achieve strategic growth.

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We may need to obtain substantial additional funding to fund our operating plan.

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

For example, in connection with the Fourth Amendment to the Loan Agreement with Pharmakon, we agreed to remove the 3.35% cap on the Secured Overnight Financing Rate, thus potentially increasing the interest rate that we will pay on the Term Loans.

We failed to timely file our Quarterly Report on Form 10-Q for the three months ended June 30, 2023, or the Second Quarter 10-Q .

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This may make it more difficult for us to conduct a public offering of our securities.

We expect our cash resources to fund our current operating plan through at least the next twelve months from the filing of this Quarterly Report on Form 10-Q.

However, if our operating performance deteriorates significantly from the levels expected in our operating plan, it would have an effect on our liquidity and our ability to continue as a going concern in the future.

We believe our existing cash resources and cash we expect to generate from product, royalty and license revenue are sufficient to fund our current operating plan through at least the next twelve months from the filing of this Quarterly Report on Form 10-Q.

However, if our operating performance deteriorates significantly from the levels expected in our operating plan, or if vadadustat is not approved in the U.S., it would affect our liquidity and our ability to continue as a going concern in the future.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves numerous risks and uncertainties, and actual results could vary as a result of a number of factors, many of which are outside our control.

We have based this estimate on assumptions that may be substantially different than actual results, and we could utilize our available capital resources sooner than we currently expect.

In addition, if we fail to satisfy any of the covenants under our Loan Agreement with Pharmakon, including the covenant that our Annual Report on Form 10-K for the fiscal year ending December 31, 2023 not be qualified as to going concern, and the loan is accelerated, we may not have sufficient resources to fund our operating plan through the next twelve months.

There can be no assurance that the

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current operating plan will be achieved in the time frame anticipated by us, or that our cash resources will fund our operating plan for the period anticipated by us, or that additional funding will be available on terms acceptable to us, or at all.

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

In addition, if we fail to satisfy any of the covenants under our Loan Agreement with Pharmakon, including the covenant that our Annual Report on Form 10-K for the fiscal year ending December 31, 2023 not be qualified as to going concern, and the loan is accelerated, or if certain pre-specified events occur and we are required to make principal payments to Pharmakon sooner than we currently anticipate, we may not have sufficient resources to fund our operating plan through the next twelve months.

There can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, or that our cash resources will fund our operating plan for the period anticipated by us, or that additional funding will be available on terms acceptable to us, or at all.

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

Also, additional funds may not be available to us in sufficient amounts or on acceptable terms or at all.

If we are unable to raise additional capital in sufficient amounts when needed or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development and/or commercialization of Auryxia and any other products or product candidates, including those that may be in-licensed or acquired, or to take any actions with respect to vadadustat depending on future decisions with respect to vadadustat in the U.S.

In addition, raising funds in the current economic environment may present additional challenges.

For example, any sustained disruption in the capital markets from adverse macroeconomic conditions, such as rising inflation, increasing interest rates and slower economic growth or recession, could negatively impact our ability to raise capital, and we cannot predict the extent or duration of such macroeconomic disruptions.

If we are unable to raise additional capital in sufficient amounts when needed or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development and/or commercialization of Auryxia and any other products or product candidates, including vadadustat and those that may be in-licensed or acquired, or to take any actions with respect to vadadustat depending on future decisions with respect to vadadustat in the U.S.

Any of these events could significantly harm our business, financial condition and prospects.

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

We expect to finance future cash needs through product revenue, potential strategic transactions, public or private equity or debt transactions, or a combination of these approaches.

We expect to finance future cash needs through product revenue and royalty and license revenue, and we may seek to sell public or private equity, enter into new debt transactions, explore potential strategic transactions or a combination of these approaches.

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

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If we are unable to raise additional funds when needed, we may not be able to pursue planned development and commercialization activities and we may need to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

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If we fail to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price of $1.00 per share and timely filing of all periodic financial reports, or risk delisting, which would have a material adverse effect on our business.

If we fail to maintain compliance with Nasdaq's continued listing requirements, it could affect our ability to raise capital on acceptable terms, or at all.

In the event we are delisted from Nasdaq, the only established trading market for our common stock would be eliminated, and we would be forced to list our shares on the OTC Markets or another quotation medium, depending on our ability to meet the specific listing requirements of those quotation systems.

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On May 9, 2023, we received a letter from Nasdaq stating that the Company had not regained compliance with the minimum bid price rule during the compliance period and was subject to delisting.

We timely requested an appeal hearing which stayed delisting pending the decision of a Nasdaq Hearings Panel, or the Panel .

On May 22, 2023, we received a letter from the Office of General Counsel of Nasdaq informing us that Nasdaq confirmed that we had regained compliance with the $1.00 per share minimum bid price requirement.

Following this notice, the scheduled hearing before the Panel on June 22, 2023 was cancelled and our securities continue to be listed and traded on The Nasdaq Capital Market.

On August 11, 2023, we received a notification letter from Nasdaq informing us that since we had not yet filed our Second Quarter 10-Q, we are not in compliance with Nasdaq's listing rule requiring timely filing of all required periodic financial reports with the U.S.

Securities and Exchange Commission, or the SEC.

The Nasdaq notification letter specifies that we have 60 calendar days, or until October 10, 2023, to submit a plan to regain compliance with this rule.

If Nasdaq accepts our plan, Nasdaq can grant an exception of up to 180 calendar days from the Second Quarter 10-Q's due date, or until February 5, 2024, to regain compliance.

Our common stock will continue to trade on The Nasdaq Capital Market pending Nasdaq’s review of our plan to regain compliance.

Although the minimum bid price deficiency matter is now closed, and we expect to regain compliance with the Nasdaq periodic report filing requirement upon filing of this Quarterly Report on Form 10-Q, there can be no assurance that we will be able to continue to comply with the Nasdaq continued listing requirements.

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On August 30, 2023, we received a letter from the Office of General Counsel of Nasdaq informing us that Nasdaq confirmed that we had regained compliance with Nasdaq's listing rule requiring timely filing of all required periodic financial reports with the SEC.

Although the minimum bid price deficiency and Nasdaq periodic reporting requirement matters are now closed, there can be no assurance that we will be able to continue to comply with the Nasdaq continued listing requirements.

We may not be successful in our efforts to identify, acquire, in-license, discover, develop and commercialize additional products or product candidates or our decisions to prioritize the development of certain product candidates over others may not be successful, which could impair our ability to grow.

Although we continue to focus a substantial amount of our efforts on the commercialization of Auryxia and to pursue our anticipated NDA resubmission for vadadustat in the U.S.

with the FDA and to seek regulatory approval for vadadustat in other territories, a key element of our long-term growth strategy is to develop additional product candidates and acquire, in-license, dev elop and/or market additional products and product candidates.

Although we continue to focus a substantial amount of our efforts on the commercialization of Auryxia and to pursue approval for vadadustat in the U.S.

with the FDA, a key element of our long-term growth strategy is to develop additional product candidates and acquire, in-license, dev elop and/or market additional products and product candidates.

Research programs to identify product can didates require substantial technical, financial and human resources, regardless of whether product candidates are ultimately identified.

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If any of these events occur, we may be forced to abandon our research and development efforts for one or more of our programs, or we may not be able to identify, discover, develop or commercialize additional product candidates, which may have a material adverse effect on our business.

Because we have limited financial and managerial resources, especially as a result of the CRL for vadadustat that we received in March 2022 and the reductions in workforce that we implemented in 2022, we focus on products, research programs and product candidates for specific indications.

As a result, we may forgo or delay pursuit of opportunities with other product candidates or for other indications, or out license rights to product candidates, that later prove to have greater commercial potential.

Because we have limited financial and managerial resources, especially as a result of the CRL for vadadustat that we received in March 2022 and the reductions in workforce that we implemented in 2022, we have focused on products, research programs and product candidates for specific indications.

As a result, we may forgo or delay pursuit of opportunities with other product candidates or for other indications, or out license rights to product candidates, that later prove to have greater

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commercial potential.

For example, as a result of receipt of the CRL and implementation of the reductions in workforce, we delayed certain research activities.

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We may focus our efforts and resources on potential products, product candidates or other programs that ultimately prove to be unsuccessful.

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We may engage in strategic transactions to acquire assets, businesses, or rights to products, product candidates or technologies or form collaborations or make investments in other companies or technologies that could harm our operating results, dilute our stockholders’ ownership, increase our debt, or cause us to incur significant expense.

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Any of the foregoing could have a detrimental effect on our business, results of operations and financial condition.

For example, on June 4, 2021, we entered into a license agreement, the Cyclerion Agreement, with Cyclerion Therapeutics Inc., or C yclerion , 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.

For example, on June 4, 2021, we entered into a license agreement, 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.

Although we have progressed preclinical studies for praliciguat, we need to do additional work to manufacture product for clinical trials before we can initiate the trials, and when started, we may be unsuccessful in developing praliciguat.

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• increased amortization expenses or, in the case of a write-down of the value of acquired assets, impairment losses, such as the Auryxia intangible asset impairment in the second quarter of 2020 and corresponding adjustments to the estimated useful life of the developed product rights for Auryxia;

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• impairment of relationships with key suppliers or customers of any acquired business due to changes in management and ownership;

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

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We believe our revenue growth was negatively impacted by the recent COVID-19 pandemic in 2021, 2022 and the first half of 2023 primarily as the CKD patient populations that we serve experienced both high hospitalization and mortality rates due to COVID-19, and the pandemic had an adverse impact on the phosphate binder market in which Auryxia competes.

Labor shortages and costs have adversely impacted dialysis providers.

We believe our revenue growth was negatively impacted by the recent COVID-19 pandemic in 2021, 2022 and the first nine months of 2023 primarily as the CKD patient populations that we serve experienced both high hospitalization and mortality rates due to COVID-19, and the pandemic had an adverse impact on the phosphate binder market in which Auryxia competes.

Labor shortages and costs have also adversely impacted dialysis providers.

These impacts have refocused clinical efforts in addressing bone and mineral disorders like hyperphosphatemia to more acute operational issues to ensure patients receive dialysis treatments and still some patients have been rescheduled or missed treatments due to labor shortages.

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

For example, areas of China have recently continued to implement lockdowns for COVID-19, which could impact the global supply chain.

At this time, our CMOs continue to operate at or near normal levels.

However, it is possible that the recent COVID-19 pandemic and response efforts may have an impact in the future on our contract manufacturers’ ability to manufacture and deliver Auryxia and vadadustat (if approved in the United States and which is currently marketed under the trade name Vafseo by MTPC in Japan and approved in Europe), which may result in increased costs and delays, or disruptions to the manufacturing and supply of our products.

However, it is possible that the recent COVID-19 pandemic and response efforts may have an impact in the future on our contract manufacturers’

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ability to manufacture and deliver Auryxia and vadadustat (if approved in the United States and which is currently marketed under the trade name Vafseo by MTPC in Japan and approved in Europe), which may result in increased costs and delays, or disruptions to the manufacturing and supply of our products.

These impacts could have a negative effect on our inventory reserves, which could result in an increase in inventory write-offs due to expiry.

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Financial Statements of this Quarterly Report on Form 10-Q for additional information regarding our obligations under the Loan Agreement.

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The Loan Agreement contains affirmative and negative covenants applicable to us and our subsidiaries, including maintaining, on an annual basis, a minimum liquidity threshold and, on a quarterly basis, a minimum net sales threshold for Auryxia.

The Loan Agreement contains affirmative and negative covenants applicable to us and our subsidiaries, including maintaining, on a quarterly basis, a minimum net sales threshold for Auryxia and on an annual basis, in certain instances, a minimum liquidity threshold.

In addition, the Loan Agreement contains covenants that our Annual Reports on Form 10-K, must not be subject to any qualification as to going concern.

Failure to maintain compliance with these or other covenants would result in an event of default under the Loan Agreement, which could result in enforcement action, including acceleration of amounts due under the Loan Agreement.

Additionally, the liabilities under the Loan Agreement will be accelerated, subject to certain exceptions, if we are required to repay to CSL Vifor all or more than a specified amount of the working capital facility established in connection with the Second Amended and Restated License Agreement that we entered into with CSL Vifor, in February 2022, or the Vifor Second Amended Agreement, as a result of certain terminations of the Vifor Second Amended Agreement or due to a reduction in the balance of the working capital facility by more than a prespecified amount.

Additionally, the liabilities under the Loan Agreement will be accelerated, subject to certain exceptions, if we are required to repay to CSL Vifor all or more than a specified amount of the working capital facility established in connection with the Vifor Agreement, as a result of certain terminations of the Vifor Agreement or due to a reduction in the balance of the working capital facility by more than a prespecified amount.

The Fourth Amendment to the Loan Agreement extended the maturity date of each Term Loan from November 11, 2024 to March 31, 2025, or the New Maturity Date , and delayed the payment of additional principal of each Term Loan until October 31, 2024, at which time we will make monthly payments of principal.

However, if certain pre-specified events occur, we will be required to (a) make payments of principal of such Term Loans commencing on the Payment Date (as defined in the Loan Agreement) immediately following the occurrence of such event and continuing on a quarterly basis on each Payment Date thereafter through the New Maturity Date and (b) repay, on a specified date on or after July 1, 2024, all unpaid principal that would have been due and payable during the period commencing on the Payment Date immediately following the Fourth Amendment Effective Date and ending on the Payment Date immediately following such date (including all accrued and unpaid interest thereon, if any), as if we had been required to make equal quarterly payments of principal of such Term Loans commencing on the Payment Date immediately following the Fourth Amendment Effective Date.

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

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This represented the repayment of $5.0 million of the first tranche and the full $20.0 million of the second tranche.

Upon a change of control, mandatory prepayment provisions require us to prepay the principal amount outstanding, the applicable prepayment premium and make-whole premium and accrued and unpaid interest.

Upon a change of control, mandatory prepayment provisions require us to prepay the principal amount outstanding, the applicable prepayment premium and

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make-whole premium and accrued and unpaid interest.

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

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

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

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

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Risks Related to Commercialization

Our business is substantially dependent on the commercial success of Auryxia.

If we are unable to continue to successfully commercialize Auryxia, our results or operations and financial condition will be materially harmed.

Our business and our ability to generate product revenue largely depend on our, and our collaborators’, ability to successfully commercialize Auryxia.

Our ability to generate revenue depends on our ability to execute on our commercialization plans, and

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the size of the market for, and the level of market acceptance of, Auryxia and any other product or product candidate, including those that may be in-licensed or acquired.

Our business is substantially dependent on the commercial success of Auryxia and vadadustat, if approved.

If we are unable to continue to successfully commercialize Auryxia, our results of operations and financial condition will be materially harmed.

Our business and our ability to generate product revenue largely depend on our, and our collaborators’, ability to successfully commercialize Auryxia and vadadustat .

Our ability to generate revenue depends on our ability to execute on our commercialization plans, and the size of the market for, and the level of market acceptance of, Auryxia, and vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired.

If the size of any market for which a product or product candidate is approved decreases or is smaller than we anticipate, our revenue and results of operations could be materially adversely affected.

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

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

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

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

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• the prevalence and complications of the disease treated by the product;

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• the clinical indications for which the product is approved and the product label approved by regulatory authorities, including any warnings or limitations that may be required on the label as a consequence of potential safety risks associated with the product;

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In addition, our ability to generate net product revenue depends on our ability to control the expenses associated with commercializing a product, including internal expenses, manufacturing costs, rebates, product returns and other adjustments.

We do not have control over many of the expenses required to commercialize our products, and if we experience increased expenses, our net product revenue may decrease and/or we may incur additional expenses.

In addition, o ur net product revenue requires judgement and includes estimates for rebates and product returns, which can fluctuate from quarter-to-quarter and year-over-year.

If our net product revenue is lower than anticipated, our business could be harmed.

We do not have control over many of the expenses required to commercialize our products, and if we experience increased expenses, our net product revenue may decrease and we may incur additional expenses.

In addition, our net product revenue requires judgement and includes estimates for rebates and product returns, which can fluctuate from quarter-to-quarter and year-over-year.

If our net product revenue is lower than anticipated, including as a result of higher expenses, our business could be harmed.

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

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We have built a commercial infrastructure and sales force in the United States for Auryxia, our only commercial product.

However, f ollowing receipt of the CRL, in April and May 2022, we implemented a reduction of our workforce by approximately 42% across all areas of the Company (47% inclusive of the closing of the majority of open positions), including several members of our sales and marketing team and management.

However, following receipt of the CRL, in April and May 2022, we implemented a reduction of our workforce by approximately 42% across all areas of the Company (47% inclusive of the closing of the majority of open positions), including several members of our sales and marketing team and management.

In November 2022, we also implemented a reduction of our workforce, by approximately 14% consisting of individuals within our commercial organization as a result of our decision to shift to a strategic account management focused model for our commercial efforts.

If the remaining sales and marketing team cannot successfully commercialize Auryxia, or if additional sales and marketing employees decide to leave as a result of the reduction in workforce or otherwise, it could have a material adverse effect on Auryxia revenue and our financial condition.

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If we obtain regulatory approval to market vadadustat in the U.S., we believe that we can leverage the current commercial foundation for vadadustat in the U.S., but if we are unable to do so successfully this would materially harm our business.

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Further, our reductions in workforce may further exacerbate these conditions and interfere with our ability to find and retain qualified personnel.

As a result, we may not be able to retain our existing employees or hire new employees quickly enough to meet our needs.

As a result, we may not be able to retain our existing

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employees or hire new employees quickly enough to meet our needs.

At the same time, we may face high turnover, requiring us to expend time and resources to source, train and integrate new employees.

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

If we are unable to maintain our own sales and marketing capabilities, we will not be successful in commercializing Auryxia, vadadustat, if approved, and any other product candidate that may be approved.

I f we are unable to maintain our own sales and marketing capabilities, we will not be successful in commercializing Auryxia, vadadustat, if approved, and any other product candidate that may be approved.

Furthermore, if we are unable to maintain our arrangements with third parties with respect to sales and marketing, if we are unsuccessful in entering into additional arrangements with third parties to sell and market our products or we are unable to do so on terms that are favorable to us, or if such third parties are unable to carry out their obligations under such arrangements, it will be difficult to successfully commercialize our product and product candidates, including vadadustat, if approved.

For example, if in connection with the Vifor Second Amended Agreement, we experience difficulties with CSL Vifor, or if CSL Vifor experiences difficulties with other parties to whom it expects to sell vadadustat, if approved, our ability to commercialize vadadustat, if approved, will be severely hindered and our business operations will be materially harmed.

For example, if in connection with the Vifor Agreement, we experience difficulties with CSL Vifor, or if CSL Vifor is not successful in commercializing vadadustat, if approved, in a timely manner, or at all, our revenue related to vadadustat will be impacted.

Our, or our partners', failure to obtain or maintain adequate coverage, pricing and reimbursement for Auryxia, vadadustat, if approved, or any other future approved products, could have a material adverse effect on our or our collaboration partners’ ability to sell such approved products profitably and otherwise have a material adverse impact on our business.

Market acceptance and sales of any approved products, including Auryxia and, if approved, vadadustat, depends significantly on the availability of adequate coverage and reimbursement from third party payors and may be affected by existing and future healthcare reform measures.

Governmental author ities, third party payors, and PBMs decide which drugs they will cover, as well as establish formularies or implement other mechanisms to manage utilization of p roducts and determine reimbursement levels.

Governmental authorities, third party payors, and PBMs decide which drugs they will cover, as well as establish formularies or implement other mechanisms to manage utilization of products and determine reimbursement levels.

We cannot be sure that coverage or adequate reimbursement will be available for Auryxia, vadadustat, if approved, or any of our potential future products.

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Obtaining coverage and reimbursement approval for a product from a governmental authority, PBM or a third-party payor is a time consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor.

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reimbursement by a governmental payor can be dependent on the assignment of codes via the Healthcare Common Procedural Coding System, which codes are assigned on a quarterly basis.

In the United States, there are multiple governmental authorities, PBMs and third-party payors with varying coverage and reimbursement levels for pharmaceutical products, and the timing of commencement of reimbursement by a governmental payor can be dependent on the assignment of codes via the Healthcare Common Procedural Coding System, which codes are assigned on a quarterly basis.

Within Medicare, for oral drugs dispensed by pharmacies and also administered in facilities, coverage and reimbursement may vary depending on the setting.

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While this decision does not impact CMS coverage for the control of serum phosphorus levels in adult patients with DD-CKD, or the Hyperphosphatemia Indication, it requires Part D plan sponsors to impose prior authorization or other steps to ensure that Auryxia is reimbursed only for the Hyperphosphatemia Indication.

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

While we believe that the vast majority of the Medicare prescriptions written for Auryxia today are for the Hyperphosphatemia Indication and therefore will

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continue to be covered by Medicare with prior authorization, the CMS Decision has had and will continue to have an adverse impact on the sales and future growth of Auryxia for the Hyperphosphatemia Indication and the IDA Indication.

Medicaid reimbursement of drugs varies by state.

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Four distributors, Fresenius Medical Care Rx, McKesson Corporation, Cardinal Health, Inc.

and Amerisource Bergen Drug Corporation, in the aggregate, accounted for a significant percentage of our gross revenue during the three months ended June 30, 2023.

and Amerisource Bergen Drug Corporation, in the aggregate, accounted for a significant percentage of our gross revenue during the three months ended September 30, 2023.

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

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

We currently believe it is likely that vadadustat, if approved, will be reimbursed using the Transitional Drug Add-on Payment Adjustment, or TDAPA , followed by inclusion in the bundled reimbursement model for Medicare beneficiaries.

For those that obtain dialysis through commercial insurance during the 30-month coordination period or through Medicaid prior to Medicare becoming primary payer after 90 days, patients may access vadadustat through contracts we negotiate with third party payors for reimbursement of vadadustat, which would be subject to the risks and uncertainties described above.

Furthermore, vadadustat was approved in Europe and Australia for the treatment of anemia due to CKD in DD-CKD patients.

In Europe, reimbursement is obtained on a country-by-country basis and it is a time consuming process.

Medice is working on securing pricing and reimbursement in key markets in Europe, but there is no guarantee of the timing or extent of reimbursement that they will receive, if at all.

For those that obtain dialysis through commercial insurance during the 30-month coordination period or through Medicaid prior to Medicare becoming primary payer after 90 days, patients may access vadadustat through contracts we or CSL Vifor negotiate with third party payors for reimbursement of vadadustat, which would be subject to the risks and uncertainties described above.

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

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DaVita and Fresenius Medical Care, which account for a vast majority of the dialysis population in the United States.

Under 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.

Under the Vifor 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.

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

See Note 5 to our consolidated

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financial statements in Part I, Item 1.

Financial Statements of this Quarterly Report on Form 10-Q for additional information regarding the Vifor Second Amended Agreement.

If vadadustat is approved and we are not able to maintain the Vifor Second Amended Agreement or enter into a supply agreement with DaVita or other dialysis clinics, our business may be materially harmed.

See Note 4 to our consolidated financial statements in Part I, Item 1.

Financial Statements of this Quarterly Report on Form 10-Q for additional information regarding the Vifor Agreement.

If vadadustat is approved and we are not able to maintain the Vifor Agreement or enter into a supply agreement with DaVita or other dialysis clinics, or if Vifor is not able to successfully contract with the Supply Group, our business may be materially harmed.

Similar to how payor coverage may affect the sales of a product, formulary status within dialysis organizations may affect what products are prescribed within that specific organization.

Therefore, if a product is not on a formulary, the prescribers within that organization may be less likely to prescribe that product or may have a difficult time prescribing that product, resulting in less sales.

Further, one dialysis organization’s determination to add a product to their formulary does not assure that other dialysis organizations will also add the product to theirs.

Further, one dialysis organization’s determination to add a product to their formulary does not assure

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that other dialysis organizations will also add the product to theirs.

There is always a risk a dialysis organization will not contract with a drug manufacturer for a specific product, resulting in that product not being on that organization’s formulary.

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However, the failure to obtain reimbursement in one jurisdiction may negatively impact our ability to obtain reimbursement in another jurisdiction.

We or our partners may not be able to obtain such reimbursement approvals on a timely basis, if at all, an d favorable pricing in certain countries depends on a number of factors, some of which are outside of our control.

In addition, we plan to rely on a partner to obtain approval by reimbursement authorities outside the United States.

Our partners may not be able to obtain such reimbursement approvals on a timely basis, if at all, and favorable pricing in certain countries depends on a number of factors, some of which are outside of our partners' control.

In May 2023, we entered into the license agreement with Medice, pursuant to which we granted Medice an exclusive license to develop and commercialize vadadustat for the treatment of anemia in patients with chronic kidney disease in the Medice Territory.

If Medice is not able to obtain favorable pricing in the Medice Territory, or if such approvals are delayed, it will effect Medice’s sales of vadadustat in the Medice Territory , which could have an adverse effect on our results of operations.

If Medice is not able to obtain favorable pricing in the Medice Territory, or if such approvals are delayed, it will effect Medice’s sales of vadadustat in the Medice Territory, which could have an adverse affect on our results of operations.

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

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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) and Unicycive’s Renazorb TM (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 Ardelyx resubmitted a new drug application to the FDA in April 2023 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 RenazorbTM (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 with respect to the control of serum phosphorus in adult patients with CKD on dialysis), that may impact the market for Auryxia.

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

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

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

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

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

Other companies have product candidates in various stages of preclinical or clinical development to treat diseases and complications of the diseases for which we are marketing Aury xia.

Other companies have product candidates in various stages of preclinical or clinical development to treat diseases and complications of the diseases for which we are marketing Auryxia.

In addition, we and Keryx’s licensors, Panion & BF Biotech, Inc., or Panion, and, as applicable, Dr.

Hsu, entered into settlement agreements with all but one of the third parties who submitted Paragraph IV certification notice letters regarding Abbreviated New Drug Applications, or ANDAs , submitted to the FDA , pursuant to which we granted licenses to market a generic version of Auryxia in the United States beginning in March 2025 (subject to FDA approval), or earlier under certain circumstances customary for settlement agreements of this nature, which may impact our business and results of operation.

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we granted licenses to market a generic version of Auryxia in the United States beginning in March 2025 (subject to FDA approval), or earlier under certain circumstances customary for settlement agreements of this nature, which may impact our business and results of operation.

Drugs that may compete with vadadustat 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.

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

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

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

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

In addition, daprodustat, GSK’s product, and enarodustat, JT’s product, are approved in Japan for the treatment of anemia due to CKD.

Bayer HealthCare AG has submitted an NDA for its product candidate for the treatment of renal anemia in Japan.

In addition, daprodustat, GSK’s product, and enarodustat, JT’s product, are approved in Japan for the treatment of anemia due to CKD, and molidustat, Bayer HealthCare AG's product, is approved in Japan for the treatment of renal anemia.

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

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The patents for epoetin alfa, an injectable ESA, expired in 2004 in the EU, and the remaining patents expired between 2012 and 2016 in the United States.

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

The introduction of biosimilars into the injectable ESA market in the United States will constitute additional competition for vadadustat if we are able to obtain approval for and commercially launch vadadustat.

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

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In particular, these companies have greater experience and expertise in conducting preclinical testing and clinical trials, obtaining marketing approvals, manufacturing such products on a broad scale and marketing approved products.

These companies also

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have significantly greater research and marketing capabilities than we do and may also have products that have been approved or are in late stages of development and have collaborative arrangements in our target markets with leading companies and research institutions.

These companies also have significantly greater research and marketing capabilities than we do and may also have products that have been approved or are in late stages of development and have collaborative arrangements in our target markets with leading companies and research institutions.

Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product candidates that we are developing obsolete.

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

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

The commercialization of Riona and Vafseo in Japan, Vafseo in Europe and our current and potential future efforts with respect to the development and commercialization of our products and product candidates outside of the United States subject us to a variety of risks associated with international operations, which could materially adversely affect our business.

If we are not able

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

The commercialization of Riona and Vafseo in Japan, Vafseo in Europe and other territories where it is approved, and our current and potential future efforts with respect to the development and commercialization of our products and product candidates outside of the United States subject us to a variety of risks associated with international operations, which could materially adversely affect our business .

Our Japanese sublicensee, JT, and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii , commercialize Riona, the trade name for ferric citrate hydrate 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 adult patients with IDA in Japan.

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We also granted Averoa SAS, or Averoa , an exclusive license to develop and commercialize ferric citrate in the EEA, Turkey, Switzerland and the United Kingdom.

In 2023, the marketing authorization for vadadustat was approved by the EMA, the Medicines and Healthcare Products Regulatory Agency, or the MHRA , and the Swiss Agency for Therapeutic Products, or Swissmedic .

In 2023, the marketing authorization for vadadustat was approved by the EMA, the United Kingdom Medicines and Healthcare Products Regulatory Agency, or the MHRA , the Swiss Agency for Therapeutic Products, or Swissmedic , and the Australian Therapeutic Goods Administration, or TGA .

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Foreign Corrupt Practices Act, or FCPA , the UK Bribery Act or similar local regulation, the EU General Data Protection Regulation, or GDPR , and similar data protection laws, and tax, employment, immigration and labor laws;

• economic weakness, including inflation, or political instability in particular foreign economies and markets;

• economic weakness, including inflation, increasing interest rates, or political instability in particular foreign economies and markets;

• foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

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As and if we continue to expand our commercialization efforts, we may encounter new risks.

Risks Related to Product Development

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Risks Related to Product Development

Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and we will incur additional costs in connection with, and may experience delays in completing, or ultimately be unable to complete, the development of vadadustat and any other product candidates.

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In May 2023, the OND denied our appeal but provided a path forward for us to resubmit the NDA for vadadustat for the treatment of anemia due to CKD for dialysis dependent patients without the need for us to generate additional clinical data.

In July 2023, we held an End of Dispute Type A meeting with the FDA to align on the contents of the NDA resubmission.

We expect to resubmit the NDA by the end of the third quarter of 2023, with a potential PDUFA date that we project will be in March 2024.

In September 2023, we filed our resubmission to our NDA, and in October 2023, the FDA acknowledged that the resubmission was complete and set a PDUFA date of March 27, 2024.

However, it is impossible to predict when or if vadadustat or any of our other product candidates will prove effective or safe in humans or will receive marketing approval or on what terms.

If we are unsuccessful in obtaining approval for vadadustat in the U.S.

or other territories, it would have an adverse effect on our results of operations.

If we are unsuccessful in obtaining approval for vadadustat in the U.S., it would have an adverse effect on our results of operations.

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

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• regulators, independent data monitoring committees, or IDMCs , institutional review boards, or IRBs , safety committees, or ethics committees, may require that we suspend or terminate our clinical trials for various reasons, including noncompliance with regulatory requirements, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using our product candidate, or a finding that the participants are being exposed to unacceptable health risks;

• clinical trials of our product candidates may produce negative or inconclusive results or results that may be interpreted in a manner different than we interpret them, and we may decide, or regulators may require us, to conduct additional clinical trials, repeat a clinical trial or abandon product development programs;

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

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for other reasons, such as failure to recruit or enroll suitable patients or patients' failure to return for post-treatment follow up;

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

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

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If any of the foregoing occurs, the following may occur:

• regulators may require that we conduct additional clinical trials, repeat clinical trials or conduct other studies beyond those that we currently contemplate;

• re gulators may require that we conduct additional clinical trials, repeat clinical trials or conduct other studies beyond those that we currently contemplate;

• we may be delayed in obtaining marketing approval for vadadustat or other product candidates;

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Our preclinical studies or clinical trials may need to be restructured or may not be completed on schedule, or at all.

Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize vadadustat, if approved, or any other product candidate, including those that may be in-licensed or acquired, or allow our competitors to bring products to market before we do.

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licensed or acquired, or allow our competitors to bring products to market before we do.

This could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

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Additionally, it is often more difficult to enroll special or particular subpopulations of patients, such as pediatric or elderly patients, due to a number of factors including parental or other caregiver considerations, concerns and burdens.

For example, we enrolled sites in

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a post-approval pediatric study for the Hypophosphatemia Indication of Auryxia in the second quarter of 2022, which began patient recruitment in the third quarter of 2022, but enrollment of eligible pediatric patients in study sites continues to be very slow despite efforts to do so.

For example, we enrolled sites in a post-approval pediatric study for the Hypophosphatemia Indication of Auryxia in the second quarter of 2022, which began patient recruitment in the third quarter of 2022, but enrollment of eligible pediatric patients in study sites continues to be very slow despite efforts to do so.

Furthermore, the recent COVID-19 pandemic resulted in temporary closures of, and may continue to impact, clinical trial sites on which we rely for the conduct of clinical trials and recent COVID-19 pandemic precautions and staffing shortages have caused moderate delays in enrolling new clinical trials and may cause delays in enrolling other new clinical trials.

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

Further, if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.

F urther, if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.

For example, in December 2022, with the passage of Food and Drug Omnibus Reform Act, 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.

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Conducting clinical trials outside of the United States, as we have done historically and as we may decide to do in the future, presents additional risks and complexities and, if we decide to conduct a clinical trial outside of the United States in the future, we may not complete such trials successfully, in a timely manner, or at all, which could affect our ability to obtain regulatory approvals.

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• the potential burden of complying with a variety of laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatments.

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Data obtained from studies conducted in the United States may not be accepted by the EMA, the PMDA and other regulatory authorities outside of the United States.

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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.

In October 2022, we submitted the FDRR to the FDA and focused on the favorable balance between the benefits and risks of vadadustat for the treatment of anemia due to CKD in adult patients on dialysis in light of safety concerns expressed by the FDA in the CRL for dialysis patients related to the rate of adjudicated thromboembolic events driven by vascular access thrombosis for vadadustat compared to the active comparator and th e risk of drug-induced liver injury.

In July 2023, we held an End of Dispute Type A meeting with the FDA to align on the contents of the NDA resubmission.

We expect to resubmit the NDA by the end of the third quarter of 2023, with a potential PDUFA date that we project will be in March 2024.

There can be no assurances that we will be successful in our anticipated NDA resubmission.

In September 2023, we filed our resubmission to our NDA, and in October 2023, the FDA acknowledged that the resubmission was complete and set a PDUFA date of March 27, 2024.

There can be no assurances that we will be successful in our NDA resubmission.

If we are unable to overcome these concerns, vadadustat may not be approved by the FDA on favorable terms, or at all, and our financial condition could be materially harmed.

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• patient recruitment could be slowed, and enrolled patients may not want to complete the clinical trial;

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• regulatory authorities may require warnings on the label, such as the warning on Auryxia’s label regarding iron overload;

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• we may be precluded from pursuing additional development opportunities to enhance the clinical profile of a product within its indicated populations, or studying the product or product candidate in additional indications and populations or in new formulations;

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• we could be investigated by the government or sued and held liable for harm caused to patients, including in class action lawsuits;

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For example, 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.

This review consisted of a blinded re-assessment of hepatic events conducted

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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.

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

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

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Risks Related to Regulatory Approval

We may not be able to obtain marketing approval for, or successfully commercialize, vadadustat or any other product candidate, or we may experience significant delays in doing so, any of which would materially harm our business.

We may not be able to obtain marketing approval for vadadustat or any other product candidate, or we may experience significant delays in doing so, any of which would materially harm our business.

Clinical trials, manufacturing and marketing of any product or product candidate are subject to extensive and rigorous review and regulation by numerous governmental authorities in the United States and other jurisdictions.

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

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

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

We are not permitted to market vadadustat in the United States until we receive approval from the FDA or in any other jurisdiction until the requisite approval from regulatory authorities in such jurisdiction is received.

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In July 2023, we held an End of Dispute Type A meeting with the FDA to align on the contents of the NDA resubmission.

We expect to resubmit the NDA by the end of the third quarter of 2023 , with a potential PDUFA date that we project will be in March 2024 .

There can be no assurances that we will be successful in our anticipated NDA resubmission and obtain approval for vadadustat in a timely manner, on favorable terms, or at all.

In September 2023, we filed our resubmission to our NDA, and in October 2023, the FDA acknowledged that the resubmission was complete and set a PDUFA date of March 27, 2024.

There can be no assurances that we will obtain approval for vadadustat in a timely manner, on favorable terms, or at all.

As a result, the regulatory approval process for vadadustat in the U.S.

is highly uncertain.

We may not obtain approval at all, and if we are able to obtain approval, it will only be for patients with DD-CKD and, in any event, the expense and time to do so could adversely impact our ability to successfully commercialize vadadustat, and our financial condition could be materially harmed.

Even if we are able to obtain approval, it will only be for patients with DD-CKD and, in any event, the expense and time to do so could adversely impact our ability to successfully commercialize vadadustat, and our financial condition could be materially harmed.

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Further, vadadustat and any other product candidate may not receive marketing approval in the United States even if it is approved in other countries.

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

Pursuant to the sunset clause under EU law, the EC’s approval of Fexeric in the

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EU was contingent on, among other things, our commencing marketing of Fexeric within three years;

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

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 could face heightened risks with respect to seeking marketing approval in the United Kingdom, or UK , as a result of the recent withdrawal of the UK from the EU, commonly referred to as Brexit.

Pursuant to the formal withdrawal arrangements agreed between the UK and the EU, the UK withdrew from the EU, effective December 31, 2020.

On December 24, 2020, the UK and the EU entered into a Trade and Cooperation Agreement.

The agreement sets out certain procedures for approval and recognition of medical products in each jurisdiction.

Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of the Trade and Cooperation Agreement would prevent us from commercializing vadadustat or any other product candidate, including those that may be in-licensed or acquired, in the UK and/or the EU and restrict our ability to generate revenue and achieve and sustain profitability.

If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the UK for vadadustat or any other product candidate, which could significantly and materially harm our business.

As of January 1, 2021, the MHRA became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas Northern Ireland will continue to be subject to European Union rules under the Northern Ireland Protocol.

The MHRA will rely on the Human Medicines Regulations 2012 (SI 2012/1916) (as amended) as the basis for regulating medicines.

In addition, the safety concerns associated with the current standard of care for the indications for which we are seeking marketing approval for vadadustat may affect the FDA’s or other regulatory authorities’ review of the safety results of vadadustat.

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• the FDA may disagree with inclusion of data obtained from certain regions outside the United States to support the NDA for potential reasons such as differences in clinical practice from United States standards;

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

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Advisory Committee could recommend non-approval, conditions of approval or restrictions on approval, and the FDA may ultimately agree with the recommendations;

• as part of any future regulatory process, the FDA may ask an Advisory Committee to review portions of the NDA, the FDA may have difficulty scheduling an Advisory Committee meeting in a timely manner or, if convened, an FDA Advisory Committee could recommend non-approval, conditions of approval or restrictions on approval, and the FDA may ultimately agree with the recommendations;

• the relevant regulatory authority’s review process and decision-making regarding vadadustat and any other product candidate may be impacted by the results of our and our competitors’ clinical trials and safety concerns of marketed products used to treat the same indications as the indications for which vadadustat and any other product candidate are being developed;

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Supreme Court entered a stay pending disposition of the appeal of the district court decision in the Court of Appeals for the Fifth Circuit or the Supreme Court.

That court held oral arguments in the case on May 17, 2023 and a decision is expected soon.

The Court of Appeals for the Fifth Circuit held oral arguments in the case on May 17, 2023 and, on August 16, 2023, issued its decision.

The court declined to order the removal of mifepristone from the market, finding that a challenge to the FDA’s initial approval in 2000 is barred by the statute of limitations.

But the court did hold that changes allowing for expanded access of mifepristone that FDA authorized in 2016 and 2021 were arbitrary and capricious in violation of federal law.

On September 8, 2023, the Justice Department and a manufacturer of mifepristone asked the U.S.

Supreme Court to review the court’s decision.

Depending on the outcome of this litigation and the regulatory uncertainty it has engendered, our ability to develop new drug product candidates and to maintain approval of existing drug products and measures adopted under a REMS is at risk and could be delayed, undermined or subject to protracted litigation.

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In June 2023 we requested an extension of time for the submission of the final report and such request was denied by the FDA in August 2023.

Therefore, the final report for this PMR trial is still due in April 2024, and we are unlikely to complete the trial by that time.

Therefore, the final report for this PMR trial is still due in

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April 2024, and we are unlikely to complete the trial by that time.

With regard to our IDA Indication, we initially committed to completing the post-approval pediatric study and submitting a final report to the FDA by January 2023.

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The FDA lifted the partial clinical hold in June 2022, however, we have not commenced start up of this study pending resolution of the manufacturing of the smaller size tablets.

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enjoin the sale of Auryxia or seek civil penalties, which would have a material adverse impact on our ability to commercialize Auryxia and our ability to generate revenues from Auryxia.

If we are unable to complete these studies successfully by the applicable deadline, or have further delays in completing these studies, we will need to inform the FDA, have further discussions and, if the FDA finds that we failed to comply with pediatric study requirements, in violation of applicable law, it could institute enforcement proceedings to seize or enjoin the sale of Auryxia or seek civil penalties, which would have a material adverse impact on our ability to commercialize Auryxia and our ability to generate revenues from Auryxia.

In addition, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for Auryxia, vadadustat, if approved, and any other product for which we receive regulatory approval will be subject to extensive and ongoing regulatory requirements and guidance.

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

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

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Risks Related to Governmental Regulation and Compliance

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investigations, fines, penalties or sanctions, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

We are subject to a complex regulatory scheme that requires significant resources to ensure compliance and our failure to comply with applicable laws could subject us to government scrutiny or enforcement, potentially resulting in costly investigations, fines, penalties or sanctions, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

In general, a variety of laws apply to us or may otherwise restrict our activities, including the following:

• laws and regulations governing the conduct of preclinical studies and clinical trials in the United States and other countries in which we are conducting such studies;

• l aws and regulations governing the conduct of preclinical studies and clinical trials in the United States and other countries in which we are conducting such studies;

• anti-corruption and anti-bribery laws, including the FCPA, the UK Bribery Act and various other anti-corruption laws in countries outside of the United States;

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• the federal False Claims Act, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties, and violations of the FDCA, the federal government pricing laws, and the federal Anti-Kickback Statute trigger liability under the federal False Claims Act;

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• HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• HIPAA, as amended by the HITECH, and their respective implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

• the federal Physician Payments Sunshine Act (renamed the Open Payments Act) requires applicable manufacturers of covered drugs to report payments and other transfers of value to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

• the federal Open Payments Act (the former Physician Payments Sunshine Act) requires applicable manufacturers of covered drugs to report payments and other transfers of value to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

• analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws and gift ban and transparency statutes, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by state Medicaid or other programs, or non-governmental third party payors, including private insurers, and which are not preempted by federal laws and often differ from state to state, thus complicating compliance efforts;

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state laws restricting interactions with healthcare providers and other members of the healthcare community or requiring pharmaceutical manufacturers to implement certain compliance standards, which vary from state to state.

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There are also restrictions about making comparative or superiority claims based on safety or efficacy that are not supported by substantial evidence.

Accordingly, we may not promote Auryxia in the United States for use in any indications other than the Hyperphosphatemia Indication and the IDA Indication, and all promotional claims must be consistent with the FDA-approved labeling for Auryxia.

Accordingly, we may not promote Auryxia in the United States for use in any

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indications other than the Hyperphosphatemia Indication and the IDA Indication, and all promotional claims must be consistent with the FDA-approved labeling for Auryxia.

Promoting a drug off-label is a violation of the FDCA and can give rise to liability under the federal False Claims Act, as well as under additional federal and state laws and insurance statutes.

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

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Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products in certain circumstances.

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However, in the event of a resurgence of the recent COVID-19 pandemic or a similar public health emergency in the future, the FDA may not be able to continue its current pace and review timelines could be extended.

Regulatory authorities outside the United States facing similar circumstances may adopt similar restrictions or other policy measures in response to the recent COVID-19 pandemic or a similar public health emergency and may also experience delays in their regulatory activities.

Regulatory authorities outside the United States facing

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similar circumstances may adopt similar restrictions or other policy measures in response to the recent COVID-19 pandemic or a similar public health emergency and may also experience delays in their regulatory activities.

If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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Data Protection Act 2018 applies to the processing of personal data that takes place in the U.K.

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includes parallel obligations to those set forth by GDPR.

and includes parallel obligations to those set forth by GDPR.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data when required, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, when required, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third party processors.

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Companies must continue to monitor the regulatory landscape and implement necessary changes, all of which may be costly and may put the company out of compliance while any changes are being implemented.

Following the withdrawal of the UK from the EU, the UK Data Protection Act 2018 applies to the processing of personal data that takes place in the UK and includes parallel obligations to those set forth by GDPR.

In relation to data transfers, both the UK and the EU have determined, through separate “adequacy” decisions, that data transfers between the two jurisdictions are in compliance with the UK Data Protection Act and the GDPR, respectively.

The UK and the U.S.

have also agreed to a U.S.-UK “Data Bridge”, which functions similarly to the EU-U.S.

Data Privacy Framework and provides an additional legal mechanism for companies to transfer data from the UK to the United States.

In addition to the UK, Switzerland is also in the process of approving an adequacy decision in relation to the Swiss-U.S.

Data Privacy Framework (which would function similarly to the EU-U.S.

Data Privacy Framework and the U.S.-UK Data Bridge in relation to data transfers from Switzerland to the United States).

Any changes or updates to these developments have the potential to impact our business.

Additionally, in October 2022, President Biden signed an executive order to implement the EU-U.S.

Data Privacy Framework, which would serve as a replacement to the EU-U.S.

Data Privacy Framework, which serves as a replacement to the EU-U.S.

Privacy Shield.

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Data Privacy Framework in December 2022, and the EC adopted the adequacy decision on July 10, 2023.

The adequacy decision will permit U.S.

The adequacy decision permits U.S.

companies who self-certify to the EU-U.S.

Data Privacy Framework to rely on it as a valid data transfer mechanism for data transfers from the EU to the U.S.

However, some privacy advocacy groups have already suggested that they will be challenging the EU-U.S.

However, some privacy advocacy groups have already challenged or suggested that they will be challenging the EU-U.S.

Data Privacy Framework.

If these challenges are successful, they may not only impact the EU-U.S.

If these challenges are

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successful, they may not only impact the EU-U.S.

Data Privacy Framework, but also further limit the viability of the standard contractual clauses and other data transfer mechanisms.

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New laws also are being considered at both the state and federal levels.

For example, the CCPA, which went into effect on January 1, 2020, and the CPRA, which amends CCPA by expanding the scope and applicability, while also introducing new

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privacy protections, is creating similar risks and obligations as those created by GDPR.

For example, the CCPA, which went into effect on January 1, 2020, and the CPRA, which amends CCPA by expanding the scope and applicability, while also introducing new privacy protections, is creating similar risks and obligations as those created by GDPR.

In November 2020, California voters passed a ballot initiative for the CPRA, which went into effect on January 1, 2023 and significantly expanded the CCPA to incorporate additional GDPR-like provisions including requiring that the use, retention and sharing of personal information of California residents be reasonably necessary and proportionate to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater disclosures related to notice to residents regarding retention of information.

The CPRA also creates a new agency that is specifically responsible for enforcing the new law.

The CPRA also creates a new agency that is specifically responsible for enforcing the new law and other California privacy laws.

Because of this, we may need to engage in additional activities (e.g., data mapping) to identify the personal information we are collecting and the purposes for which such information is collected.

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Even if we are not determined to have violated these laws, investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.

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Legislative and regulatory healthcare reform may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain for any products that are approved in the United States or foreign jurisdictions.

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In addition, other legislative and regulatory changes have been proposed, but not yet adopted.

For example, in July

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2019, the U.S.

For example, in July 2019, the U.S.

Department of Health and Human Services, or HHS , proposed regulatory changes in kidney health policy and reimbursement.

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Further, on July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals.

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.

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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.

M ore 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.

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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.

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On June 6, 2023, Merck & Co.

Inc., or Merck , filed a lawsuit against HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the United States Constitution.

Subsequently, other parties, including the U.S.

Chamber of Commerce, Bristol Myers Squibb Company, and the Pharmaceutical Research and Manufacturers of America also filed lawsuits in various courts with similar constitutional claims against HHS and CMS.

On July 11, 2023, Merck moved for summary judgment in its action and, the next day, the U.S.

Chamber of Commerce moved for preliminary injunctive relief seeking to stop implementation of the drug pricing provisions of the IRA.

Subsequently, a number of other parties, including the U.S.

Chamber of Commerce, the Chamber , Bristol Myers Squibb Company, the Pharmaceutical Research and Manufacturers of America, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against HHS and CMS.

On July 12, 2023, the Chamber moved for preliminary injunctive relief seeking to halt implementation of the drug pricing provisions of the IRA.

On September 29, 2023, in the first substantive ruling in this litigation, the district court denied the Chamber’s motion, finding that the Chamber did not show, among other things, a strong likelihood of success on its constitutional arguments because Medicare is voluntary.

The court also denied the government’s motion to dismiss, indicating that it needs more information from the parties before ruling on that motion.

We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.

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, marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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

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

The continuing efforts of the government,

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

• the demand for Auryxia and any products candidates for which we receive marketing approval;

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We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

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Although we maintain workers’ compensation insurance to cover us for costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities.

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We also entered into a collaboration agreement with MTPC to develop and commercialize vadadustat in Japan and certain other Asian countries.

In addition, we entered into the Vifor Second Amended Agreement pursuant to which we granted CSL Vifor an exclusive license to sell vadadustat to the Supply Group in the United States .

In addition, we entered into the Vifor Agreement pursuant to which we granted CSL Vifor an exclusive license to sell vadadustat to the Supply Group in the United States.

We also granted to Averoa an exclusive license to develop and commercialize ferric citrate in the EEA, Turkey, Switzerland and the United Kingdom.

Furthermore, in May 2023, we entered into the license agreement with Medice, pursuant to which we granted Medice an exclusive license to develop and commercialize vadadustat for the treatment of anemia in patients with chronic kidney disease in the Medice Territory.

We may form or seek other strategic alliances, joint ventures, or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our and our partners' commercialization efforts with respect to Auryxia, Riona, Vafseo and our and our partners' development and, if approved, commercialization efforts with respect to vadadustat and any other product candidates.

We may form or seek other strategic alliances, joint

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ventures, or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our and our partners' commercialization efforts with respect to Auryxia, Riona, Vafseo and our partners' development and, if approved, commercialization efforts with respect to vadadustat and any other product candidates.

We may not be able to maintain our collaborations for development and commercialization.

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In addition, our current and any future collaborations may not be successful due to a number of important factors, including the following:

• collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations;

• c ollaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations;

• collaborations may be terminated in accordance with the terms of the collaboration agreements and, if terminated, may make it difficult for us to attract new collaborators or adversely affect how we are perceived in scientific and financial communities, and may result in a need for additional capital and expansion of our internal capabilities to pursue further development or commercialization of the applicable products and product candidates;

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• inefficiencies or structural changes in internal operations or processes of our collaborators may lead to increased expenses associated with commercializing a product, including manufacturing costs, rebates, returns and other adjustments which would negatively impact net product revenue;

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delayed timelines, re-prioritization of our programs, decreasing resources or funding allocated to support our programs, or termination of the collaborations;

• a significant change in the senior management team, a change in the financial condition or a change in the business operations, including a change in control or internal corporate restructuring, of any of our collaborators, could result in delayed timelines, re-prioritization of our programs, decreasing resources or funding allocated to support our programs, or termination of the collaborations;

• collaborators may not comply with all applicable regulatory and legal requirements.

If any of these events occurs, the market potential of Auryxia, Riona, Vafseo or vadadustat, if and where approved, and any other products or product candidates, could be reduced, and our business could be materially harmed.

If any of these events occur, the market potential of Auryxia, Riona, Vafseo or vadadustat, if and where approved, and any other products or product candidates, could be reduced, and our business could be materially harmed.

Collaborations may also divert resources, including the attention of management and other employees, from other parts of our business, which could have an adverse effect on other parts of our business, and we cannot be certain that the benefits of the collaboration will outweigh the potential risks.

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We will require substantial additional cash to fund the continued commercialization of Auryxia and the development and potential commercialization of any of our product candidates, including vadadustat, if approved.

We may decide to enter into additional collaborations for the development and commercialization of Auryxia or our product candidates, including vadadustat, both within and outside of the United States.

We may decide to enter into

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additional collaborations for the development and commercialization of Auryxia or our product candidates, including vadadustat, both within and outside of the United States.

For example, in May 2023, we entered into the license agreement with Medice, pursuant to which we granted Medice an exclusive license to develop and commercialize vadadustat for the treatment of anemia in patients with chronic kidney disease in the Medice Territory.

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

We received $44.8 million from HCR (net of certain transaction expenses) under the Royalty Agreement, and we are eligible to receive up to an additional $15.0 million under the Royalty

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Agreement if specified sales milestones are achieved for vadadustat in the territory covered by the MTPC Agreement, subject to the satisfaction of certain customary conditions.

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

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

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We rely upon third parties to conduct all aspects of our product manufacturing, and in many instances only have a single supplier, and the loss of these manufacturers, their failure to supply us on a timely basis, or at all, or their failure to successfully carry out their contractual duties or comply with regulatory requirements, cGMP requirements, or guidance could cause delays in or disruptions to our supply chain and substantially harm our business.

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We do not have any manufacturing facilities and do not expect to independently manufacture any product or product candidates.

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

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In addition, the cost of obtaining Auryxia and vadadustat is subject to adjustment based on our third party manufacturers’ costs of obtaining raw materials and producing the product.

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This supply interruption was resolved, and we have taken and continue to take actions designed to prevent future interruptions in the supply of Auryxia.

However, we recently experienced issues in manufacturing Auryxia, and if we continue to experience manufacturing issues or our actions to prevent future interruptions are not successful, we may experience additional supply issues.

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In addition, before we can manufacture product at a new site, we must validate the process at that site.

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If we have additional write-downs to inventory reserves in the future, it could negatively impact our ability to supply Auryxia, and our financial condition could be harmed.

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

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

Moreover, our failure or the failure of our third party manufacturers to comply with applicable regulations or guidance, or our failure to oversee or facilitate such compliance, could result in sanctions being imposed on us or our third party manufacturers, including, where applicable, clinical holds, fines, injunctions, civil penalties, delays in, suspension of or withdrawal of approvals, license revocation, seizures or recalls of Auryxia or Vafseo in Japan, operating restrictions, receipt of a Form 483 or warning letter, or criminal prosecutions, any of which could significantly and adversely affect the supply of Auryxia or vadadustat.

For example, we previously conducted three limited, voluntary recalls of Auryxia.

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

Also, if our starting materials, drug substance or drug product are damaged or lost while in our or our third party

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manufacturers’ control, it may adversely impact our ability to supply Auryxia or vadadustat, and we may incur significant financial harm.

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

Also, if our starting materials, drug substance or drug product are damaged or lost while in our or our third party manufacturers’ control, it may adversely impact our ability to supply Auryxia or vadadustat, and we may incur significant financial harm.

In addition, Auryxia and vadadustat may compete with other products and product candidates for access to third party manufacturing facilities.

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Any of the foregoing could negatively impact our third party manufacturers' ability to meet our demand, which could adversely impact our ability to supply Auryxia or vadadustat, and we may incur significant financial harm.

Our curre nt and anticipated future dependence on third parties for the manufacture of Auryxia and vadadustat may adversely affect our and our partners' ability to commercialize Auryxia and vadadustat, where approved, on a timely and competitive basis and may reduce any future profit margins.

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Our current and anticipated future dependence on third parties for the manufacture of Auryxia and vadadustat may adversely affect our and our partners' ability to commercialize Auryxia and vadadustat, where approved, on a timely and competitive basis and may reduce any future profit margins.

We rely upon third parties to conduct our clinical trials and certain of our preclinical studies.

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For example, we use third parties to store product at various sites in the United States to distribute to our clinical trial sites.

A ny performance failure on the part of our storage or distributor partners could delay clinical development, marketing approval or commercialization, resulting in additional costs and depriving us of potential product revenue.

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Any performance failure on the part of our storage or distributor partners could delay clinical development, marketing approval or commercialization, resulting in additional costs and depriving us of potential product revenue.

If the licensor of certain intellectual property relating to Auryxia terminates, modifies or threatens to terminate existing contracts or relationships with us, our business may be materially harmed.

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

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

For example, following announcement of the Merger, Panion notified Keryx in writing that Panion would terminate the Panion License

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Agreement on November 21, 2018 if Keryx did not cure the breach alleged by Panion, specifically, that Keryx failed to use commercially reasonable best efforts to commercialize Auryxia outside the United States.

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

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No consistent policy regarding the breadth of claims allowed in pharmaceutical and biotechnology patents has emerged to date.

Changes in the patent laws or the interpretation of the patent laws in the United States and other jurisdictions

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may diminish the value of our patents or narrow the scope of our patent protection.

Changes in the patent laws or the interpretation of the patent laws in the United States and other jurisdictions may diminish the value of our patents or narrow the scope of our patent protection.

Accordingly, the patents we own or license may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products.

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The patents we own or license may be challenged or invalidated or may fail to provide us with any competitive advantage.

Since we have licensed or sublicensed many patents from third parties, we may not be able to enforce such licensed patents against third party infringers without the cooperation of the patent owner and the licensor, which may not be forthcoming.

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we have licensed or sublicensed many patents from third parties, we may not be able to enforce such licensed patents against third party infringers without the cooperation of the patent owner and the licensor, which may not be forthcoming.

In addition, we may not be successful or timely in obtaining any patents for which we submit applications.

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If we cannot maintain the confidentiality of this information, our ability to receive patent protection or protect our trade secrets or other proprietary information will be at risk.

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We may not be able to protect our intellectual property rights throughout the world.

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

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

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

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territories where we have patent protection, but where enforcement is not as strong as in the United States.

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

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

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

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The three-year exclusivity period, unlike five-year exclusivity, does not prevent the submission of a competing ANDA or 505(b)(2) NDA.

Instead, it only prevents the FDA from granting final approval to such a product until expiration of the exclusivity period.

Instead, it only prevents the FDA from granting final approval to such a product until expiration of the

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exclusivity period.

Five-year and three-year exclusivity will not delay the submission (in the case of five-year exclusivity) or the approval (in the case of three-year exclusivity) of a full NDA submitted under section 505(b)(1) of the FDCA;

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In addition, third parties may have or may obtain patents in the future and claim that our products or other technologies infringe their patents.

If we are required to defend against suits brought by third parties, or if we sue third parties to protect our rights, we may be required to pay substantial litigation costs, and our management’s attention

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may be diverted from operating our business.

In addition, any legal action against our licensor, licensees or us that seeks damages or an injunction of commercial activities relating to Auryxia, vadadustat or any other product candidates or other technologies, including those that may be in-licensed or acquired, could subject us to monetary liability, a temporary or permanent injunction preventing the development, marketing and sale of such products or such technologies, and/or require our licensor, licensees or us to obtain a license to continue to develop, market or sell such products or other technologies.

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We cannot predict whether our licensor, licensees or we would prevail in any of these types of actions or that any required license would be made available on commercially acceptable terms, if at all.

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Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties.

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Should a license to a third party patent become necessary, we cannot predict whether we would be able to obtain a license or, if a license were available, whether it would be available on commercially reasonable terms.

If such a license is necessary and a license under the applicable patent is unavailable on

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commercially reasonable terms, or at all, our ability to commercialize our product or product candidate may be impaired or delayed, which could in turn significantly harm our business.

If such a license is necessary and a license under the applicable patent is unavailable on commercially reasonable terms, or at all, our ability to commercialize our product or product candidate may be impaired or delayed, which could in turn significantly harm our business.

Further, defense of infringement claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.

In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties or redesign our products, which may be impossible or require substantial time and monetary expenditure.

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In addition, there may be a challenge or dispute regarding inventorship or ownership of patents or applications currently identified as being owned by or licensed to us.

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We are also highly dependent on our executives, certain members of our senior management and certain members of our commercial organization.

The loss of the services of our

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executives, senior managers or other employees could impede the achievement of our research, development, regulatory and commercialization objectives and seriously harm our ability to successfully implement our business strategy.

The loss of the services of our executives, senior managers or other employees could impede the achievement of our research, development, regulatory and commercialization objectives and seriously harm our ability to successfully implement our business strategy.

Specifically, following receipt of the CRL, in April and May 2022, we implemented a reduction of our workforce by approximately 42% across all areas of our Company (47% inclusive of the closing of the majority of open positions), including several members of management.

In addition, uncertainty related to the timing and outcome of regulatory decisions, could increase attrition.

Losing members of management and other key personnel subjects us to a number of risks, including the failure to coordinate responsibilities and tasks, the necessity to create new management systems and processes, the impact on corporate culture, and the retention of historical knowledge.

In addition, uncertainty related to the outcome of regulatory decisions, could increase attrition.

Losing members of management and other key personnel subjects us to a number of risks, including the failure to

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coordinate responsibilities and tasks, the necessity to create new management systems and processes, the impact on corporate culture, and the retention of historical knowledge.

Furthermore, replacing executives, senior managers and other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, obtain and/or maintain marketing approval of and commercialize Auryxia, vadadustat and other product candidates.

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If we are unable to realize the expected operational efficiencies and cost savings from the restructuring, our operating results and financial condition would be adversely affected.

We also cannot guarantee that we will not have to undertake additional workforce reductions or restructuring activities in the future, including as a result of the FDA's decision related to our anticipated NDA resubmission for vadadustat.

Furthermore, our cost savings plan may be disruptive to our operations, including our commercialization of Auryxia, which could affect our ability to generate product revenue.

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Additionally, in the United States, we have a strategic relationship with CSL Vifor related to the commercialization of vadadustat, if approved.

As our operations continue, we expect that we will need to manage our current relationships and enter into new relationships with

As our operations continue, we expect that we will need to manage our current relationships and enter into new relationships with various strategic collaborators, consultants, vendors, suppliers and other third parties.

These relationships are complex and create numerous risks as we deal with issues that arise.

For example, we supply or have agreed to supply, as applicable, Auryxia in Europe, Vafseo in Japan, Europe and other territories where it is approved, and vadadustat in the United States, if approved, for commercial and clinical use to MTPC, Medice, Averoa and CLS Vifor, which will require us to successfully manage our limited financial and managerial resources.

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various strategic collaborators, consultants, vendors, suppliers and other third parties.

These relationships are complex and create numerous risks as we deal with issues that arise.

For example, we supply or have agreed to supply, as applicable, Auryxia in Europe, Vafseo in Japan and Europe and vadadustat in the United States, if approved, for commercial and clinical use to MTPC, Medice, Averoa and CLS Vifor, which will require us to successfully manage our limited financial and managerial resources.

In addition, we may not be able to obtain the raw materials or product that we need, or the cost of the raw materials or product may be higher than expected.

addition, we may not be able to obtain the raw materials or product that we need, or the cost of the raw materials or product may be higher than expected.

If we are unable to successfully manage our supply obligations, our ability to commercialize our products or supply such products to our partners could have a material adverse effect on our relationships with our partners and our results of operations.

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For further discussion of the material weakness, see Part I, Item 4, “Controls and Procedures.”

GAAP experience

We have taken certain steps and plan to take additional steps to remediate this material weakness, including (i) implementing and documenting a new methodology and new controls to help to ensure the completeness and accuracy of our product return reserves, (ii) engaging additional third party subject matter experts and accounting personnel with GAAP experience specific to product returns accounting and (iii) establishing effective monitoring and oversight controls to help to ensure the completeness and accuracy of our accrued product returns included in our financial statements and related disclosures.

However, we cannot provide assurance that we will be able to correct this material weakness in a timely manner or that our

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specific to product returns accounting and (iii) establishing effective monitoring and oversight controls to help to ensure the completeness and accuracy of our accrued product returns included in our financial statements and related disclosures.

However, we cannot provide assurance that we will be able to correct this material weakness in a timely manner or that our remediation efforts will be adequate to allow us to conclude that our internal control over financial reporting will be effective in the future.

remediation efforts will be adequate to allow us to conclude that our internal control over financial reporting will be effective in the future.

Even if this material weakness is remediated in the future, we could identify additional material weaknesses or deficiencies in our internal control over financial reporting that could require correction or remediation.

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We, our collaborators, contractors and other third parties rely significantly upon information technology, and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively.

In addition, we and our collaborators, contractors and other third parties rely on information technology networks and systems, including the Internet, to process, transmit and store clinical trial data, patient information, and other electronic information, and manage or support a variety of business processes, including operational and financial transactions and records, personal identifying information, payroll data and workforce scheduling information.

In addition, we and our collaborators, contractors and other third parties rely on information technology networks and systems, including the Internet and artificial intelligence based software, to process, transmit and store clinical trial data, patient information, and other electronic information, and manage or support a variety of business processes, including operational and financial transactions and records, personal identifying information, payroll data and workforce scheduling information.

We purchase most of our information technology from vendors, on whom our systems depend.

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We also rely on third parties to manage patient information for Auryxia.

Additionally, the use of artificial intelligence based software is increasingly being used in the biopharmaceutical industry.

Use of artificial intelligence based software may lead to the release of confidential proprietary information, which may impact our ability to realize the benefit of our intellectual property.

The secure maintenance of this sensitive information is critical to our business and reputation.

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These threats can come from a variety of sources, ranging in sophistication from individual hackers to state-sponsored attacks.

Attackers have used artificial intelligence and machine learning to launch more automated, targeted and coordinated attacks against targets.

Cyber threats may be broadly targeted, or they may be custom-crafted against our information systems or those of our vendors or third party service providers.

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Although we take steps to manage and avoid these risks and to be prepared to respond to attacks, our preventive and any remedial actions may not be successful and no such measures can eliminate the possibility of the systems’ improper functioning or the improper access or disclosure of confidential or personally identifiable information such as in the event of cyberattacks.

Security breaches, whether through physical or electronic break-ins, computer viruses, ransomware, impersonation of authorized users, attacks by hackers or other means, can create system disruptions or shutdowns or the unauthorized disclosure of confidential information.

Security breaches, whether through

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physical or electronic break-ins, computer viruses, ransomware, impersonation of authorized users, attacks by hackers or other means, can create system disruptions or shutdowns or the unauthorized disclosure of confidential information.

Although we believe our collaborators, vendors and service providers, such as our CROs, take steps to manage and avoid information security risks and respond to attacks, we may be adversely affected by attacks against our collaborators, vendors or service providers, and we may not have adequate contractual remedies against such collaborators, vendors and service providers to remedy any harm to our business caused by such event.

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Our employees, independent contractors, principal investigators, CROs, CMOs, consultants and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.

In addition, l aws and regulations governing any international operations we have or may have in the future may require us to develop and implement costly compliance programs.

In addition, laws and regulations governing any international operations we have or may have in the future may require us to develop and implement costly compliance programs.

We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, CMOs, consultants and vendors may engage in fraudulent conduct or other illegal activity.

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equivalents, including those related to insider trading.

We hold a marketing authorization for vadadustat from the EMA, the MHRA and Swissmedic, we are seeking regulatory approval for vadadustat with countries in the ACCESS Consortium, and we conducted our global clinical trials for vadadustat, and may in the future conduct additional trials, in countries where corruption is prevalent, and violations of any of these laws by

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our personnel or by any of our vendors or agents, such as our CROs or CMOs, could have a material adverse impact on our clinical trials and our business and could result in criminal or civil fines and sanctions.

We hold a marketing authorization for vadadustat from the EMA, the MHRA, Swissmedic and TGA, and we conducted our global clinical trials for vadadustat, and may in the future conduct additional trials, in countries where corruption is prevalent, and violations of any of these laws by our personnel or by any of our vendors or agents, such as our CROs or CMOs, could have a material adverse impact on our clinical trials and our business and could result in criminal or civil fines and sanctions.

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

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Additionally, it is not always possible to identify and deter misconduct by employees and third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling known or unknown risks or preventing losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, or if any such action is instituted against our employees, consultants, independent contractors, CROs, CMOs, vendors or principal investigators, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, curtailment of our operations, disclosure of our confidential information and imprisonment, any of which could adv ersely affect our ability to operate our business and our results of operations.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, or if any such action is instituted against our employees, consultants, independent contractors, CROs, CMOs, vendors or principal investigators, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, curtailment of our operations, disclosure of our confidential information and imprisonment, any of which could adversely affect our ability to operate our business and our results of operations.

Our financial statements include goodwill and an intangible asset as a result of the Merger.

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As of June 30, 2023, we had approximately $113.1 million in the aggregate of goodwill and a definite lived intangible asset from the Merger.

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

As of September 30, 2023, we had approximately $104.1 million in the aggregate of goodwill and a definite lived intangible asset from the Merger.

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

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

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• a decline in our stock price.

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Failure to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop.

1 unchanged sentence

Although we maintain product liability insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage.

Our insurance policies also have various exclusions, and

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we may be subject to a product liability claim for which we have insufficient or no coverage.

Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have insufficient or no coverage.

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

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We will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives and corporate governance practices.

As a public company, w e operate in a demanding regulatory environment, and we have and will continue to incur significant legal, accounting and other expenses.

As a public company, we operate in a demanding regulatory environment, and we have and will continue to incur significant legal, accounting and other expenses.

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

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• The rights conferred in our Bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons.

Any claims for indemnification made by our directors or officers could impact our cash resources and our ability to fund the business.

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Any claims for indemnification made by our directors or officers could impact our cash resources and our ability to fund the business.

Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.

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On January 18, 2023, defendants moved to dismiss the amended consolidated complaint in its entirety.

Briefing on defendants’ motion to dismiss the amended consolidated complaint was completed on April 5, 2023 and oral argument is currently scheduled to be held on October 18, 2023.

Briefing on defendants’ motion to dismiss the amended consolidated complaint was completed on April 5, 2023 and oral argument is currently scheduled to be held on January 12, 2024.

In connection with any litigation or other legal proceedings, we could incur substantial costs, and such costs and any related settlements or judgments may not be covered by insurance.

Monetary damages or any other adverse judgment would have a material adverse effect on our business and financial position.

In addition, if other resolution or actions taken as a result of legal proceedings were to restrain our ability to operate or market our products and services, our consolidated financial position, results of operations or cash flows could be materially adversely affected.

We could also suffer an adverse impact on our reputation, negative publicity and a diversion of management’s attention and resources, which could have a material adverse effect on our business.

In addition, if other resolution or actions taken as a result of legal

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proceedings were to restrain our ability to operate or market our products and services, our consolidated financial position, results of operations or cash flows could be materially adversely affected.

We could also suffer an adverse impact on our reputation, negative publicity and a diversion of management’s attention and resources, which could have a material adverse effect on our business.

Risks Related to our Common Stock

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Our stock price has been and will likely continue to be volatile.

The stock market in general and the market for similarly situated biopharmaceutical companies specifically have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

Since our initial public offering in March 2014, the price of our common stock as reported on The Nasdaq Stock Market has ranged from a low of $0.24 on October 24, 2022 to a high of $31.00 on June 20, 2014.

The daily closing market price for our common stock varied between a high price of $1.43 on May 24, 2023 and a low price of $0.51 on April 5, 2023 in the three-month period ended June 30, 2023.

The daily closing market price for our common stock varied between a high price of $1.84 on August 1, 2023 and a low price of $0.87 on July 6, 2023 in the three-month period ended September 30, 2023.

During that time, the price of our common stock ranged from an intra-day low of $0.82 per share to an intra-day high of $1.84 per share.

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

As of June 30, 2023 and based on the amounts reported in the most recent filings made under Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, Muneer A.

As of September 30, 2023 and based on the amounts reported in the most recent filings made under Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act , Muneer A.

Satter, or Satter, beneficially owned approximately 8% of our outstanding shares of common stock, the Vanguard Group, or Vanguard, beneficially owned approximately 6% of our outstanding shares of common stock, and CSL Vifor beneficially owned approximately 4% of our outstanding shares of common stock.

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Such sales of our common stock could result in higher than average trading volume and may cause the market price for our common stock to decline.

In addition, we currently have on file with the SEC a shelf registration statement, which allows us to offer and sell up to $300 million in registered securities, such as common stock, preferred stock, debt securities, warrants and units, from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale, including a sales agreement

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prospectus that covers the offering, issuance and sale by us of up to a maximum aggregate offering price of up to $26 million of our common stock that may be issued and sold from time to time under a sales agreement with Jefferies LLC.

In addition, we currently have on file with the SEC a shelf registration statement, which allows us to offer and sell up to $300.0 million in registered securities, such as common stock, preferred stock, debt securities, warrants and units, from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale, including a sales agreement prospectus that covers the offering, issuance and sale by us of up to a maximum aggregate offering price of up to $26.0 million of our common stock that may be issued and sold from time to time under a sales agreement with Jefferies LLC.

Sales of substantial amounts of shares of our common stock or other securities by our employees or our other stockholders or by us under our shelf registration statement, pursuant to at-the-market offerings or otherwise, could dilute our stockholders, lower the market price of our common stock and impair our ability to raise capital through the sale of equity securities.

Our executive officers, directors and principal stockholders maintain the ability to significantly influence all matters submitted to stockholders for approval.

As of June 30, 2023, our executive officers, directors and principal stockholders, in the aggregate, beneficially owned shares representing a significant percentage of our capital stock.

As of September 30, 2023, our executive officers, directors and principal stockholders, in the aggregate, beneficially owned shares representing a significant percentage of our capital stock.

As a result, if these stockholders were to choose to act together, they would be able to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.

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We have never declared or paid cash dividends on our capital stock and we currently intend to retain all of our future earnings, if any, to finance the development and growth of our business.

Any payment of cash dividends in the future would be at the discretion of our Board of Directors and would depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board of Directors deems relevant.

In addition, the terms of the Loan Agreement preclude us from

Any payment of cash dividends in the future would

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paying cash dividends and future debt agreements may preclude us from paying cash dividends.

be at the discretion of our Board of Directors and would depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board of Directors deems relevant.

In addition, the terms of the Loan Agreement preclude us from paying cash dividends and future debt agreements may preclude us from paying cash dividends.

As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain for the foreseeable future.

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Sales of Unregistered Securities

During the quarter ended June 30, 2023, we did not have any sales of unregistered securities.

During the quarter ended September 30, 2023, we did not have any sales of unregistered securities.

Defaults Upon Senior Securities.

3 unchanged sentences

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

What changed 10-Q

Item 1A. Risk Factors