What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2023-11-08 · 610 added, 633 removed, 282 unchanged (82% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts) September 30,

(dollars in thousands, except per share amounts) March 31,

2024 December 31,

11 unchanged sentences

Total assets $ 225,477 $ 241,703

Liabilities and stockholders' (deficit) equity

Liabilities and stockholders' deficit

Current liabilities:

6 unchanged sentences

Long-term operating lease liabilities 7,636 8,947

Embedded debt derivative 760 760

Long-term debt, net 30,145 17,183

1 unchanged sentence

Refund liability to customer 39,927 40,093

Warrant liability 4,975 —

Other long-term liabilities 6,771 8,885

1 unchanged sentence

Commitments and contingencies (Note 10)

Stockholders' (deficit) equity:

Stockholders' deficit:

Preferred stock $ 0.00001 par value, 25,000,000 shares authorized;

no shares issued and

outstanding at September 30, 2023 and December 31, 2022

outstanding at March 31, 2024 and December 31, 2023

Common stock $ 0.00001 par value;

350,000,000 shares authorized at September 30, 2023 and December 31, 2022;

188,313,807 and 184,135,714 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

350,000,000 shares authorized at March 31, 2024 and December 31, 2023;

209,454,149 and 194,582,539 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,599,669 1,578,358

1 unchanged sentence

Accumulated deficit ( 1,626,935 ) ( 1,608,950 )

Total stockholders' (deficit) equity ( 39,422 ) 5,230

Total liabilities and stockholders' (deficit) equity $ 234,998 $ 356,054

Total stockholders' deficit ( 27,258 ) ( 30,584 )

Total liabilities and stockholders' deficit $ 225,477 $ 241,703

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands, except per share amounts) 2024 2023

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Cost of goods sold

Product 8,998 29,270 28,452 61,965

Cost of product and other revenue 2,594 11,178

Amortization of intangible asset 9,011 9,011

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Selling, general and administrative 25,438 25,053

License expense 864 743 2,381 2,323

License 711 568

Restructuring 58 106

3 unchanged sentences

Interest expense ( 2,498 ) ( 1,561 )

Other (expense) income ( 43 ) 1,167 229 2,712

Other income 95 282

Change in fair value of warrant liability ( 129 ) —

Loss on extinguishment of debt ( 517 ) —

Loss on termination of lease — — ( 524 ) —

Net loss before income taxes $ ( 17,985 ) $ ( 26,876 )

Net loss $ ( 17,985 ) $ ( 26,876 )

8 unchanged sentences

Akebia Therapeutics, Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated

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Balance at December 31, 2022 184,135,714 $ 2 $ 1,562,247 $ 6 $ ( 1,557,025 ) $ 5,230

Issuance of common stock, net of

issuance costs 4,404,600 1 7,177 — — 7,178

Proceeds from sale of stock under

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Balance at March 31, 2023 185,835,946 $ 2 $ 1,564,770 $ 6 $ ( 1,583,901 ) $ ( 19,123 )

Stock-based compensation expense — — 6,841 — — 6,841

Exercise of options 142,440 — 67 — — 67

Restricted stock unit vesting 176,179 — — — — —

Net income — — — — 29,449 29,449

Balance at June 30, 2022 183,704,654 $ 2 $ 1,555,788 $ 6 $ ( 1,496,859 ) $ 58,937

Proceeds from sale of stock under

employee stock purchase plan 144,000 — 43 — — 43

Share-based compensation expense — — 3,375 — — 3,375

Restricted stock unit vesting 102,929 — — — — —

Net loss — — — — ( 54,096 ) ( 54,096 )

Balance at September 30, 2022 183,951,583 $ 2 $ 1,559,206 $ 6 $ ( 1,550,955 ) $ 8,259

Common Stock Additional Paid-In

4 unchanged sentences

Balance at December 31, 2023 194,582,539 $ 2 $ 1,578,358 $ 6 $ ( 1,608,950 ) $ ( 30,584 )

Issuance of common stock, net of

issuance costs 13,261,311 — 18,740 — — 18,740

Proceeds from sale of stock under

employee stock purchase plan 92,321 — 70 — — 70

Exercise of options 280,260 — 141 — — 141

Stock-based compensation expense — — 2,360 — — 2,360

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Balance at March 31, 2024 209,454,149 $ 2 $ 1,599,669 $ 6 $ ( 1,626,935 ) $ ( 27,258 )

Stock-based compensation expense — — 3,490 — — 3,490

Restricted stock unit vesting 2,292,923 — — — — —

Net loss — — — — ( 11,172 ) ( 11,172 )

Balance at June 30, 2023 188,128,869 $ 2 $ 1,568,260 $ 6 $ ( 1,595,075 ) $ ( 26,807 )

Proceeds from sale of stock under

employee stock purchase plan 96,694 — 50 — — 50

Stock-based compensation expense — — 1,824 — — 1,824

Restricted stock unit vesting 88,244 — — — — —

Net loss — — — — ( 14,489 ) ( 14,489 )

Balance at September 30, 2023 188,313,807 $ 2 $ 1,570,134 $ 6 $ ( 1,609,564 ) $ ( 39,422 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands) 2024 2023

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Amortization of intangible asset 9,011 9,011

Non-cash interest expense related to sale of future royalties — 6,352

Change in fair value of warrant liability 129 —

Non-cash royalty revenue related to sale of future royalties ( 391 ) ( 425 )

Non-cash collaboration revenue — ( 9,550 )

Non-cash research and development expense — 782

1 unchanged sentence

Non-cash operating lease expense 1,017 ( 578 )

Non-cash write-off from termination of lease ( 825 ) —

Non-cash loss on extinguishment of debt 294 —

Write-down of inventory 590 335

Change in excess inventory purchase commitments — 14,095

Stock-based compensation expense 2,360 2,489

Change in fair value of embedded debt derivative — ( 1,060 )

Changes in operating assets and liabilities:

10 unchanged sentences

Investing Activities:

Purchases of equipment — ( 114 )

Net cash used in investing activities — —

Financing Activities:

Proceeds from refund liabilities to customers — 40,000

Proceeds from the issuance of debt 37,000 —

Payments of issuance costs related to BlackRock Credit Agreement ( 750 ) —

Proceeds from issuance of common stock, net of issuance costs 18,740 —

Proceeds from issuances of stock under employee stock purchase plan 84 410

Proceeds from issuance of stock under employee stock purchase plan 70 34

Proceeds from the exercise of stock options 141 —

Repayments of term debt ( 24,000 ) ( 33,000 )

Net cash (used in) provided by financing activities ( 23,916 ) 14,599

Repayment of term debt ( 36,726 ) ( 16,000 )

Net cash provided by (used in) financing activities 18,475 ( 15,966 )

Decrease in cash, cash equivalents and restricted cash ( 957 ) ( 33,504 )

1 unchanged sentence

Cash, cash equivalents and restricted cash — end of period $ 43,622 $ 59,665

Non-cash financing activities

Issuance of warrants in connection with BlackRock Credit Agreement $ 4,846 $ —

Unpaid issuance costs related to BlackRock Credit Agreement $ 522 $ —

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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NATURE OF BUSINESS

Akebia Therapeutics, Inc., and it's subsidiaries, referred to as Akebia or the Company , was incorporated in the State of Delaware in 2007.

Akebia is a fully integrated biopharmaceutical company with the purpose of bettering the lives of people impacted by kidney disease.

The Company has one commercial product, Auryxia ® (ferric citrate), which is approved by the U.S.

Food and Drug Administration, or FDA , and marketed for two indications in the United States:

the control of serum phosphorus levels in adult patients with chronic kidney disease, or CKD, on dialysis, or DD-CKD , and the treatment of iron deficiency anemia, or IDA, in adult patients with CKD not on dialysis, or NDD-CKD .

Ferric citrate is also approved and marketed in Japan as an oral treatment for IDA in adult patients for the improvement of hyperphosphatemia in such patients with DD-CKD and NDD-CKD under the trade name Riona (ferric citrate hydrate).

Vadadustat, the Company’s lead investigational product candidate, is an investigational oral hypoxia-inducible factor prolyl hydroxylase, or HIF-PH , inhibitor designed to mimic the physiologic effect of altitude on oxygen availability.

On March 29, 2022, the Company received a complete response letter, or CRL , from the FDA, which provided that it could not approve the new drug application, or NDA , for vadadustat for the treatment of anemia due to CKD in adult patients in its present form.

In October 2022, the Company submitted a Formal Dispute Resolution Request with the FDA and in May 2023, the Office of New Drugs, or OND , denied the Company's appeal but provided a path forward for the Company to resubmit the NDA for vadadustat for the treatment of anemia due to CKD for dialysis dependent patients without the need for the Company to generate additional clinical data.

In September 2023, the Company completed its resubmission to its NDA for vadadustat for the treatment of anemia due to CKD for dialysis dependent patients.

In October 2023, the FDA acknowledged that the resubmission was complete, classified it as a Class 2 response and set a user fee goal date, or PDUFA date , of March 27, 2024.

In April 2023, the European Commission, or EC , approved the marketing authorization of vadadustat under the trade name Vafseo for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis.

The marketing authorization of vadadustat under the trade name Vafseo for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis was subsequently approved in May 2023 in the United Kingdom, or UK , by the Medicines and Healthcare products Regulatory Agency, in June 2023 in Switzerland by the Swiss Agency for Therapeutics Products, in March 2023 in Korea by the Ministry of Food and Drug Safety (under trade name Vadanem) and in September 2023 in Australia and Taiwan by the Therapeutic Goods Administration, or TGA, and Taiwan Food and Drug Administration, respectively.

In May 2023, the Company entered into a License Agreement, or the Medice License Agreement, with MEDICE Arzneimittel Pütter GmbH & Co.

KG, or Medice, pursuant to which the Company granted Medice an exclusive license to develop and commercialize vadadustat for the treatment of anemia in patients with CKD in the European Economic Area, the UK, Switzerland and Australia, or the Medice Territory.

Vadadustat is also approved in Japan as a treatment for anemia due to CKD in both DD-CKD and NDD-CKD patients under the trade name Vafseo, and marketed and sold in Japan by Mitsubishi Tanabe Pharma Corporation, or MTPC.

Additionally, following regulatory approval of vadadustat in Japan, the Company began recognizing royalty revenues from MTPC from the sale of Vafseo in August 2020.

In February 2021, the Company entered into a royalty interest acquisition agreement with HealthCare Royalty Partners IV, L.P., or HCR, or Royalty Agreement , whereby the Company sold its right to receive royalties and sales milestones under its Collaboration Agreement with MTPC, or MTPC Agreement , subject to certain caps and other terms and conditions (see Note 4 for additional information).

The Company has not generated a profit to date, and may never generate profits, from product sales.

Vadadustat and the Company’s other potential product candidates are subject to long development cycles, and the Company may be unsuccessful in its efforts to develop, obtain marketing approval for or market vadadustat and its other potential product candidates.

Going Concern

Since inception, the Company has devoted most of its resources to research and development, including its preclinical and clinical development activities, commercializing Auryxia and providing general and administrative support for these operations.

Akebia Therapeutics, Inc., referred to as Akebia or the Company , was incorporated in the State of Delaware in 2007 and became a public company in 2014.

Akebia is a fully integrated commercial-stage biopharmaceutical company committed to addressing patients' unmet needs.

The Company's purpose is to better the life of each person impacted by kidney disease.

The Company has two products approved by the Food and Drug Administration, or FDA , in the United States, or U.S.

Vafseo® (vadadustat) is an oral hypoxia-inducible factor prolyl hydroxylase, or HIF-PH, inhibitor.

Vafseo (vadadustat) tablets is approved in the U.S.

on March 27, 2024 for the treatment of anemia due to chronic kidney disease, or CKD , in adults who have been receiving dialysis for at least three months.

The Company intends to commercialize Vafseo in the U.S.

with Vifor (International) Ltd.

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

Auryxia ® (ferric citrate) is marketed for two indications:

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

Auryxia will lose exclusivity in the U.S.

in March 2025.

Vafseo is also approved for the treatment of symptomatic anemia associated with CKD in the European Economic Area, or EEA , the United Kingdom, or UK , Switzerland, Australia, South Korea and Taiwan in adult patients on chronic maintenance dialysis and in Japan for adult dialysis-dependent and non-dialysis patients.

The Company will continue to support its partners in preparation to launch Vafseo in Europe, Taiwan and potentially other countries to pursue its goal of enabling broad access to Vafseo for patients globally.

Ferric citrate is also approved in Japan, and is marketed and sold by the Company's collaboration partner, 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 under the trade name Riona (ferric citrate hydrate).

Since its inception, the Company has devoted most of its resources to research and development, or R&D , including its preclinical and clinical development activities, commercializing Auryxia and providing general and administrative support for these operations.

The Company began recording revenue from the U.S.

sales of Auryxia in 2014 and revenue from sublicensing rights to Auryxia in Japan from the Company’s Japanese partners, Japan Tobacco, Inc.

and its subsidiary Torii Pharmaceutical Co., Ltd., collectively, JT and Torii, in December 2018.

sales of Auryxia and revenue from sublicensing rights to Auryxia in Japan from the Company’s Japanese partners, Japan Tobacco, Inc.

and its subsidiary Torii Pharmaceutical Co., Ltd., collectively, JT and Torii, in 2018.

In addition, the Company continues to explore additional development opportunities to expand its pipeline and portfolio of novel therapeutics.

If the Company does not successfully commercialize vadadustat, if approved, or any other potential product candidate, it may be unable to achieve profitability.

As of September 30, 2023, the Company had cash and cash equivalents of approximately $ 46.5 million.

Based on its current operating plan, the Company believes its cash resources and the cash the Company expects to generate from product, royalty and license revenues will be sufficient to fund its current operating plan for at least twelve months from the filing of this Quarterly Report on Form 10-Q.

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

The Company expects to finance future cash needs through

Akebia Therapeutics, Inc.

| Form 10-Q | Page 6

Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

product revenue and royalty and license revenue and, if the Company believes its resources are insufficient to satisfy its liquidity requirements, the Company may seek to sell public or private equity, enter into new debt transactions, explore potential strategic transactions or a combination of these approaches.

As of March 31, 2024, the Company had cash and cash equivalents of approximately $ 42.0 million.

Based on its current operating plan, the Company believes that its cash resources and the cash the Company expects to generate from product, royalty, supply and license revenues will be sufficient to fund its current operating plan for at least twelve months from the filing of this Quarterly Report on Form 10-Q, or Form 10-Q .

However, if the Company’s operating performance deteriorates significantly from the levels expected in the Company’s operating plan, it would affect the Company’s liquidity and its ability to continue as a going concern in the future.

The Company expects to finance future cash needs through product and license, collaboration and other revenue, including royalties and revenue from supply agreements.

If the Company believes its resources are insufficient to satisfy its liquidity requirements, it may seek to sell public or private equity, enter into new debt transactions, explore potential strategic transactions, consider other cash-generating or saving measures or a combination of these approaches or other strategic alternatives.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company's significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022, and notes thereto, which are included in the Company's Annual Report on Form 10-K, as amended by Amendment No.

1 on Form 10-K/A that was filed with the Securities and Exchange Commission, or SEC, on August 28, 2023, or 2022 Annual Report on Form 10-K/A .

The Company's significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2023, and notes thereto, which are included in the Company's Annual Report on Form 10-K, that was filed with the Securities and Exchange Commission, or SEC , on March 14, 2024, or 2023 Form 10-K .

Since the date of those financial statements, there have been no material changes to the Company's significant accounting policies.

In the opinion of management, all adjustments, consisting of normal recurring accruals and revisions of estimates, considered necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included.

Interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 or any other future period.

Basis of Presentation and Principals of Consolidation

Interim results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024 or any other future period.

The Company has experienced seasonality from quarter to quarter.

In general, the first quarter usually has lower revenues than the preceding fourth quarter, the second and third quarters have higher revenues than the first quarter, and the fourth quarter revenues are the highest in the year.

Akebia Therapeutics, Inc.

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Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S., or GAAP.

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the ASC and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB .

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC , and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB .

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

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Use of Estimates

The preparation of financial statements in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities as of and during the reported period.

The preparation of financial statements in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, classification of the expenses, assets and liabilities and the disclosure of contingent assets and liabilities as of and during the reported period.

On an ongoing basis, management evaluates its estimates.

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Changes in estimates are recorded in the period they become known.

Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to:

accrued expenses, right-of-use assets and liabilities, embedded debt derivative, refund liabilities to customers, other long-term liabilities, stock-based compensation expense and certain judgments regarding product and collaboration revenues.

including various rebates, returns and reserves related to product sales, non-cash interest expense on the liability related to sale of future royalties, inventories, income taxes, intangible asset and goodwill.

Reconciliation of Cash, Cash Equivalents and Restricted Cash

In determining its cash, cash equivalents and restricted cash, the Company considers only those highly liquid investments, readily convertible to cash which as of September 30, 2023 primarily included funds invested in money market funds.

The following table reconciles cash, cash equivalents and restricted cash reported within the Company's consolidated balance sheet to the total amounts showing in the consolidated statement of cash flows:

Significant estimates and judgments reflected in these unaudited condensed consolidated financial statements include, but are not limited to:

accrued expenses, other long-term liabilities, product revenues, including various rebates, returns and reserves related to product sales, inventories, classification of expenses between cost of goods sold, R&D and selling, general and administrative, long-term assets, including the Company's right-of-use assets, intangible asset and goodwill.

Cash, Cash Equivalents and Restricted Cash

In determining its cash, cash equivalents and restricted cash, the Company considers only those highly liquid investments, readily convertible to cash within 90 days from the date of purchase to be cash equivalents.

As of March 31, 2024, cash and cash equivalents primarily included cash on hand.

Restricted cash represents amounts required to secure the outstanding letter of credit in connection with the Company’s office and laboratory space in Cambridge, Massachusetts, or the Cambridge Lease .

Restricted cash is included in “other long-term assets” in the consolidated balance sheets.

The following table reconciles cash, cash equivalents and restricted cash reported within the Company's consolidated balance sheets to the total amounts showing in the consolidated statements of cash flows:

(in thousands) March 31, 2024 December 31, 2023

Cash and cash equivalents $ 41,961 $ 42,925

Restricted cash included in other long-term assets 1,661 1,654

Total cash, cash equivalents and restricted cash $ 43,622 $ 44,579

Concentration of Credit Risk

Cash, cash equivalents and accounts receivable are the only financial instruments that potentially subject the Company to concentrations of credit risk.

The Company maintains cash accounts principally at two financial institutions in the U.S., which at times, may exceed the Federal Deposit Insurance Corporation's limits.

The Company has not experienced any losses from cash balances in excess of the insurance limit.

The Company's management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institutions where its cash is held.

Akebia Therapeutics, Inc.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands) September 30, 2023 December 31, 2022

Cash and cash equivalents $ 46,529 $ 90,466

Restricted cash included in other long-term assets 1,648 2,703

Total cash, cash equivalents and restricted cash $ 48,177 $ 93,169

The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful.

Provisions are made based upon a specific review of all significant outstanding receivables and the overall quality and age of those invoices not specifically reviewed as well as historical payment patterns and existing economic factors.

The Company believes that credit risks associated with its customers and collaboration partners are not significant.

The Company's allowance for credit losses was $ 0.6 million and $ 1.0 million as of March 31, 2024 and December 31, 2023, respectively.

Write-offs for the three months ended March 31, 2024 were $ 0.5 million.

There were no write-offs for the three months ended March 31, 2023.

Manufacturing and Distribution Risk

The Company is dependent on third-party manufacturers, logistics company and distributors to supply products for commercial activities associated with its product and product candidates, as applicable.

In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for the active pharmaceutical ingredients and formulated drugs related to the Company's product and product candidate activities.

These activities, including the commercialization of Auryxia and Vafseo, could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and formulated drugs or distribution of finished product to the market.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures .

ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, or CODM, and included within the segment measure of profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM.

ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024.

The Company is currently reviewing the impact that the adoption of ASU 2023-07 may have on its consolidated financial statements and disclosure.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 requires public companies to annually (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate).

ASU 2023-09 will be effective for the annual reporting periods in fiscal years beginning after December 15, 2024.

The Company is currently evaluating ASU 2023-09 and does not expect it to have a material effect on the Company’s consolidated financial statements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The tables below present certain assets and liabilities measured at fair value categorized by the level of input used in the valuation of each asset and liability (in thousands):

March 31, 2024

Level 1 Level 2 Level 3 Total Fair Value

Long-term liability:

Warrant liability $ — $ 4,975 $ — $ 4,975

December 31, 2023

Level 1 Level 2 Level 3 Total Fair Value

Cash equivalents:

Money market funds $ 1,504 $ — $ — $ 1,504

Warrant liability – Warrant liability is classified within Level 2 of the fair value hierarchy because they are valued using inputs which are observable either directly or indirectly.

The fair value was calculated using the Black-Scholes option pricing model using the following key inputs:

volatility, risk-free rate, dividend yield and expected term.

Cash equivalents — Money market funds included within cash and cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

As of March 31, 2024, the Company did not have any money market funds included in cash equivalents.

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Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INVENTORIES AND PREPAID MANUFACTURING

Inventories consists of the following (in thousands):

March 31, 2024 December 31, 2023

Inventories, current:

Work-in-process $ 14,133 $ 4,297

Finished goods 11,399 11,394

Inventories, current $ 25,532 $ 15,691

Long-term inventories included in other long-term assets:

Raw materials 586 1,143

Work-in-process 7,568 8,260

Inventories, long-term 8,154 9,403

Total inventories $ 33,686 $ 25,094

As of March 31, 2024 and December 31, 2023, inventory consisted primarily of inventory related to the Company's commercial product, Auryxia.

As of March 31, 2024 and December 31, 2023, the Company had no prepaid manufacturing costs and $ 0.5 million of prepaid manufacturing costs for Auryxia drug substance, respectively.

Inventory written down for Auryxia as a result of excess, obsolescence, scrap or other reasons charged to cost of product and other revenue in the unaudited condensed consolidated statement of operations and comprehensive loss totaled approximately $ 0.6 million and $ 0.3 million during the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024, the Company realized lower cost of product and other revenue of $ 3.7 million due to the Company's ability to commercially sell inventory previously written down to zero, its then net realizable value.

Pre-Launch Inventory

The Company records advance payments for Vafseo active pharmaceutical ingredient, or API , or drug substance (raw materials) it expects to use for the U.S.

launch and Medice Territory as prepaid manufacturing costs.

Upon the quality release of the Vafseo batches and transfer of title to the Company from the contract manufacturing organization, or CMO , the cost of the pre-launch inventory prior to regulatory approval, including the manufacturing costs, was expensed to R&D.

As of March 31, 2024 and December 31, 2023, the Company had $ 14.0 million of prepaid manufacturing costs for Vafseo drug substance expected to be used in the U.S.

launch of Vafseo included in prepaid expenses and other current assets on the consolidated balance sheets.

See Note 6, Additional Balance Sheet Detail , for further information.

INTANGIBLE ASSET AND GOODWILL

Intangible Asset

Intangible asset, net of accumulated amortization, prior impairments and adjustments as of March 31, 2024 and December 31, 2023 consisted of the following (in thousands):

March 31, 2024 December 31, 2023

Intangible asset:

Gross Carrying

Value Accumulated Amortization Net Book Value Net Book Value Estimated Useful Life

Developed product rights for Auryxia $ 214,705 $ ( 187,673 ) $ 27,032 $ 36,042 6 years

The Company recorded $ 9.0 million in amortization expense for each of the three months ended March 31, 2024 and 2023 related to the developed product rights for Auryxia.

As of March 31, 2024 and December 31, 2023, the Company had goodwill of $ 59.0 million in connection with the December 2018 merger with Keryx.

The Company has not i dentified any goodwill impairment to date.

ADDITIONAL BALANCE SHEET DETAIL

Prepaid expenses and other current assets are as follows (in thousands):

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Description March 31, 2024 December 31, 2023

Prepaid manufacturing $ 14,018 $ 14,489

Other 4,813 5,754

Total prepaid expenses and other current assets $ 18,831 $ 20,243

See Note 4, Inventories and Prepaid Manufacturing , for further information on prepaid manufacturing expenses.

Other long-term assets are as follows (in thousands):

Description March 31, 2024 December 31, 2023

Long-term inventories $ 8,154 $ 9,403

Restricted cash 1,661 1,654

Other 1,978 1,366

Total other long-term assets $ 11,793 $ 12,423

See Note 4, Inventories and Prepaid Manufacturing , for further information on long-term inventories.

Cloud Computing Implementation Costs

The Company incurs costs to implement cloud computing arrangements that are hosted by a third-party vendor.

In accordance with ASC 350-40, Goodwill and Other, Internal-Use Software , for cloud computing arrangements that meet the definition of a service contract, the Company capitalizes qualifying implementation costs incurred during the application development stage as a component of other assets.

Capitalization of these costs concludes once the project is substantially complete and the software is ready for the Company's intended use.

Once available for its intended use, the capitalized costs will be amortized on a straight-line basis over the term of the associated hosting arrangement including periods covered by an option to extend, and will be included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss.

Costs related to data conversion, overhead, general and administrative activities, and training are expensed as incurred.

Post-configuration training and maintenance costs will be expensed as incurred.

Other assets as of March 31, 2024 included approximately $ 0.6 million of capitalized implementation costs.

There were no implementation costs capitalized as of December 31, 2023.

There was no amortization expense for the three months ended March 31, 2024 and 2023.

Accrued expenses and other current liabilities consists of the following (in thousands):

March 31, 2024 December 31, 2023

Product revenue allowances $ 13,563 $ 22,940

Product return reserves, current portion 4,516 5,420

Clinical trial costs 253 328

Compensation and related benefits 5,817 8,216

Operating lease liabilities, current portion 5,071 4,491

Royalties due to Panion 2,568 3,989

Professional fees 2,889 1,909

Accrued manufacturing costs 1,676 5,555

Restructuring costs, current portion 751 737

BioVectra termination fees, current portion 10,000 7,500

Liability related to sale of future royalties, current portion 1,994 2,048

Other 4,812 4,602

Total accrued expenses and other current liabilities $ 53,910 $ 67,735

Entry into BlackRock Loan Facility

On January 29, 2024, or the Closing Date , the Company entered into the Agreement for the Provision of a Loan Facility, or the BlackRock Credit Agreement, with Kreos Capital VII (UK) Limited , or Kreos , which are funds and accounts managed by BlackRock Inc., collectively, BlackRock , and provides for a senior secured term loan facility in the aggregate principal amount

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of up to $ 55.0 million, or the Term Loan Facility .

The Term Loan Facility is available in three tranches (i) Tranche A — $ 37.0 million was funded on the Closing Date and used to repay the Pharmakon Term Loans;

(ii) Tranche B — $ 8.0 million was funded on April 19, 2024, or the Tranche B Closing Date , and (iii) Tranche C — $ 10.0 million is available in a single draw through December 31, 2024, collectively the Term Loans .

Tranche C is available subject to receipt of a certain amount of cumulative gross cash proceeds after the Closing Date in the form of equity or equity linked securities in one or more series of transactions.

On the Closing Date, the Company drew $ 34.5 million on Tranche A, after deducting debt issuance costs, fees and expenses.

On the Tranche B Closing Date, the Company drew $ 7.5 million, after deducting debt issuance costs, fees and expenses.

The BlackRock Term Loan Facility had an initial maturity date of March 31, 2025, which was automatically extended to January 29, 2028, after the Company received FDA approval for Vafseo, or the BlackRock Maturity Date .

The Company is required to make interest-only payments until December 31, 2026, or the BlackRock Interest Only Period , after which the Company will begin paying equal monthly principal on the first calendar day of each month.

In the event of certain prespecified events, the repayment schedule will be accelerated.

The Term Loan Facility will accrue interest at a floating annual rate equal to the sum of (i) term Secured Overnight Financing Rate, or SOFR , for a tenor of one month (subject to a floor of 4.25 % per annum) plus (ii) a margin of 6.75 % per annum (subject to an overall cap of 15.00 % per annum on the all-in interest rate).

As of March 31, 2024, the Company's interest rate was 12.08 %.

The Company recognized interest expense related to the BlackRock Credit Agreement of $ 1.0 million during the three months ended March 31, 2024.

During the continuance of any payment event of default under the BlackRock Credit Agreement, the interest rate on such overdue sum will automatically increase by an additional 3.0 % per annum, and may be subject to an additional late fee of 2.0 % of such overdue sum.

The Term Loan Facility also includes transaction fees ranging from 1.00 % to 1.25 % of the draw down amount as well exit fees of 0.75 % of the amount funded to the relevant tranche.

If the Company prepays the outstanding loan prior to maturity, it will be required to pay a prepayment fee ranging from 1.0 % to 4.0 % of the amount prepaid.

If prepayment is made during the first year, the Company also is required to pay the amount of otherwise due interest payments for the twelve-month period following prepayment.

As of March 31, 2024, future principal payments under the BlackRock Credit Agreement are as follows (in thousands):

Principal Payments

Total before unamortized discount and issuance costs 35,309

unamortized discount and issuance costs ( 5,164 )

Total term loans $ 30,145

The BlackRock Term Loan Facility is secured by substantially all of the existing and after-acquired assets of the Company, including intellectual property.

The BlackRock Credit Agreement requires the Company to (i) maintain a minimum aggregate cash balance of $ 15.0 million in one or more controlled accounts or (ii) trailing twelve-month revenue of $ 150.0 million, both of which are measured monthly.

The BlackRock Credit Agreement contains various affirmative and negative covenants that limit the Company's ability to enter into certain transactions.

On the Closing Date, Kreos Capital VII Aggregator SCSp, an affiliate of Kreos, or the Warrant Holder , received a warrant to purchase 3,076,923 shares of the Company’s common stock, at an exercise price per share of $ 1.30 , or the Initial Warrant , and upon borrowing of Tranche C, the Company will become obligated to issue to the Warrant Holder additional warrants to purchase 1,153,846 shares of the Company’s common stock at an exercise price per share of $ 1.30 .

Each warrant shall be exercisable for eight years from the date of issuance.

The Initial Warrant is liability classified under ASC 815, Derivatives and Hedging , as it could potentially require net cash settlement outside of the Company’s control.

The Initial Warrant is measured at fair value each period with changes in fair value presented within the unaudited condensed consolidated statements of operations.

The fair value of the warrant liability

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was $ 5.0 million as of March 31, 2024.

See Note 3, Fair Value of Financial Instruments , for information on the fair value determination.

Other Agreements Accounted for as Debt

The Company has a liability related to the sale of future royalties which is accounted for as a debt arrangement.

See Note 8, Deferred Revenue, Refund Liability and Liability Related to Sale of Future Royalties , for further information.

The Company has a refund liability with CSL Vifor which is also accounted for as a debt arrangement.

See Note 8, Deferred Revenue, Refund Liability and Liability Related to Sale of Future Royalties , for further information.

Pharmakon Term Loans (Extinguished January 29, 2024)

On November 11, 2019, the Company, with Keryx as guarantor, entered into a loan agreement, or Pharmakon Loan Agreement , with BioPharma Credit PLC as collateral agent and a lender, or Collateral Agent, and BioPharma Credit Investments V (Master) LP as a lender, and a Guaranty and Security Agreement with the Collateral Agent.

BioPharma Credit PLC subsequently transferred its interest in the loans, solely in its capacity as a lender, to its affiliate, BPCR Limited Partnership.

The Collateral Agent and the lenders are collectively referred to as Pharmakon .

The Pharmakon Loan Agreement, as amended, consisted of a secured term loan facility in an aggregate amount of up to $ 100.0 million, or Pharmakon Term Loans , which was made available under two tranches:

(i) Pharmakon Tranche A - $ 80.0 million and (ii) Pharmakon Tranche B - $ 20.0 million.

On November 25, 2019, the Company drew $ 77.3 million on Pharmakon Tranche A, net of fees and expenses of $ 2.7 million.

On December 10, 2020, the Company drew $ 20.0 million on Pharmakon Tranche B, net of immaterial lender expenses and issuance costs.

On the Closing Date, using the proceeds from the BlackRock Credit Agreement, the Company paid the then outstanding principal balance on the Pharmakon Term Loans of $ 35.0 million, plus the outstanding interest and a prepayment fee of $ 0.2 million.

During the three months ended March 31, 2024, the Company recorded a debt extinguishment loss of $ 0.5 million.

The Pharmakon Term Loans, as amended, bore interest through maturity at a variable rate based on the three month SOFR plus a SOFR adjustment of 0.30 % plus 7.50 %.

The SOFR interest rate was capped at 3.35 % through October 31, 2023, the date of the Fourth Amendment to the Pharmakon Loan Agreement, or Fourth Amendment .

Interest expense related to the Pharmakon Loan Agreement was immaterial for the three months ended March 31, 2024.

The Company recognized $ 1.8 million of interest expense during the three months ended March 31, 2023.

See Note 7, Indebtedness , of the Notes to the Consolidated Financial Statements in the 2023 Form 10-K for further details.

DEFERRED REVENUE, REFUND LIABILITY AND LIABILITY RELATED TO SALE OF FUTURE ROYALTIES

The Company had the following deferred revenue balances as of March 31, 2024 (in thousands):

March 31, 2024

Deferred Revenue:

Short-Term Long-Term Total

$ 695 $ — $ 695

CSL Vifor Agreement — 43,296 43,296

Total $ 695 $ 43,296 $ 43,991

See Note 12, License, Collaboration and Other Revenue , for additional information on Mitsubishi Tanabe Pharma Corporation, or MTPC, deferred revenue.

CSL Vifor License Agreement

O n February 18, 2022, the Company entered into a Second Amended and Restated License Agreement, or the Vifor Agreement, with CSL Vifor, which amended and restated the License Agreement dated May 12, 2017, or the Original License Agreement .

The Vifor Agreement grants CSL Vifor an exclusive license to sell Vafseo to Fresenius Medical Care North America, or FMCNA , and its affiliates, including Fresenius Kidney Care Group LLC, to certain third-party dialysis organizations approved by the Company, to independent dialysis organizations that are members of certain group purchasing organizations and certain non-retail specialty pharmacies, collectively, the Supply Group , in the U.S., or Vifor Territory .

The Company plans to market Vafseo in the U.S., including to the Supply Group, and sell Vafseo directly to organizations outside the Supply Group.

CSL Vifor has agreed not to sell or otherwise supply Vafseo until CSL Vifor has entered a supply agreement with the applicable member of the Supply Group.

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The Vifor Agreement is structured as a profit share arrangement between the Company and CSL Vifor in which the Company will receive approximately 66 % of the profits, net of certain pre-specified costs.

In addition, CSL Vifor made an upfront payment to the Company of $ 25.0 million in February 2022 in connection with the amendment and restatement of the Vifor Agreement, which was recorded as long-term deferred revenue in the accompanying condensed consolidated balance sheets.

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

CSL Vifor may terminate the Vifor Agreement in its entirety upon thirty months' prior written notice after the first anniversary of the receipt of regulatory approval from the FDA for Vafseo for dialysis-dependent CKD patients.

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

If the Company so terminates for convenience, subject to specified exceptions, the Company will pay a termination fee to CSL Vifor.

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

Investment Agreements

In connection with the Original License Agreement, in May 2017, the Company sold an aggregate of 3,571,429 shares of the Company’s common stock, or 2017 Shares, to CSL Vifor at a price per share of $ 14.00 for a total of $ 50.0 million.

In February 2022, in connection with the Vifor Agreement, the Company sold an aggregate of 4,000,000 shares of its common stock, or 2022 Shares , to CSL Vifor at a price per share of $ 5.00 for a total of $ 20.0 million.

The $ 18.3 million representing the premium over the closing stock price, or $ 4.7 million for the 2017 Shares and $ 13.6 million for the 2022 Shares, represents consideration related to the Vifor Agreement.

The 2017 Shares and 2022 Shares are subject to standstill agreement and are subject to voting agreements.

The 2017 Shares and 2022 Shares have not been registered pursuant to the Securities Act of 1933, as amended, or the Securities Act , and were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act and Rule 506 promulgated thereunder as the transaction did not involve any public offering within the meaning of Section 4(a)(2) of the Securities Act.

See Note 8, Deferred Revenue, Refund Liability and Liability Related to the Sale of Future Royalties , of the Notes to the Consolidated Financial Statements in the 2023 Form 10-K for a more detailed description of the Vifor Agreement.

Deferred Revenue Recognition

The Company evaluated the elements of the Vifor Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, CSL Vifor, is a customer.

The Company identified one performance obligation under the Vifor Agreement at inception which is the non-sublicensable, non-transferrable license under certain of the Company's intellectual property to (i) sell Vafseo solely to the Supply Group, (ii) sell Vafseo to Designated Wholesalers solely for resale to members of the Supply Group, (iii) conduct medical affairs with respect to Vafseo in the Vifor Territory in the field during the term of the Vifor Agreement and (iv) use the Akebia Trademark solely in connection with the sale of Vafseo.

The transaction price of $ 43.3 million is comprised of the up-front payment of $ 25.0 million and the premiums paid by CSL Vifor for the 2017 Shares and 2022 Shares of $ 4.7 million and $ 13.6 million, respectively.

Under the Vifor Agreement, these payments from CSL Vifor are non-refundable and non-creditable against any other amount due to the Company.

In addition, if the Centers for Medicare & Medicaid Services, or CMS, determines that Vafseo is excluded from the Transitional Drug Add-on Payment Adjustment, or TDAPA , the Company can terminate the Vifor Agreement and will be required to repay the up-front payment and the premiums paid by CSL Vifor on the 2017 Shares and the 2022 Shares.

Given the previous uncertainty associated with a potential future approval of Vafseo by the FDA, and whether Vafseo would be included in certain reimbursement bundles by CMS, the Company constrained the entire transaction price at inception.

Although Vafseo was approved by the FDA in March 2024, until it is included in TDAPA by CMS, and therefore the license is delivered, the transaction price of $ 43.3 million will remain in long-term deferred revenue in the accompanying condensed consolidated balance sheets.

Refund Liability to Customer/Working Capital Fund

Pursuant to the Vifor Agreement, CSL Vifor contributed $ 40.0 million to a working capital fund, or Working Capital Fund , established to fund approximately 50 % of the Company’s costs of purchasing Vafseo from its contract manufacturers for the supply of Vafseo for the Vifor Territory already delivered or to be delivered to the Company through the end of 2023.

The amount of the Working Capital Fund will be reviewed at specified intervals and is adjusted based on a number of factors including outstanding supply commitments for Vafseo and agreed upon Vafseo inventory levels held by the Company for the Vifor Territory.

The Company has determined the Working Capital Fund does not represent an obligation to transfer goods or services to CSL Vifor in the future and thus under ASC 606 was recorded as a refund liability.

The refund liability is considered a debt

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arrangement with zero coupon interest and the Company imputes interest on the refund liability at a rate of 15.0 % per annum, which was determined based on certain factors, including the Company's credit rating, comparable securities yield and the expected repayment period.

On March 18, 2022, when the $ 40.0 million was received from CSL Vifor, the Company recorded an initial discount on the refund liability and a corresponding deferred gain on the condensed consolidated balance sheet.

The discount on the refund liability is being amortized to interest expense using the effective interest method over the expected term of the Vifor Agreement.

The deferred gain is being amortized to interest income on a straight-line basis over the expected term of the Vifor Agreement.

The amortization of the discount was $ 0.7 million and $ 0.8 million for the three months ended March 31, 2024 and 2023, respectively.

The amortization of the deferred gain was $ 0.9 million and $ 1.0 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, the $ 39.9 million refund liability is classified as a long-term liability based on management's estimated timing of the repayment of the refund liability to Vifor exceeding one-year.

On May 3, 2024, the Company and CSL Vifor entered into Amendment #1 to the Vifor Agreement, or the Amendment , under which the parties agreed to modify the method of repayment of the Working Capital Fund such that the Working Capital Fund will be repaid through tiered royalties ranging from a high single-digit to low double-digit percentage of the Company’s sales of Vafseo to both CSL Vifor and to third parties outside of the Vifor Agreement.

The Amendment also modified the terms of repayment of the Working Capital Fund upon termination of the Vifor Agreement.

See Note 16, Subsequent Events , for further information.

Liability Related to Sale of Future Royalties

On February 25, 2021, the Company entered into a royalty interest acquisition agreement, or the Royalty Agreement, with HealthCare Royalty Partners IV, L.P., or HCR , pursuant to which the Company sold to HCR its right to receive royalties and sales milestones for Vafseo in Japan and certain other Asian countries, such countries collectively, the MTPC Territory , and such payments collectively the Royalty Interest Payments , in each case, payable to the Company under the MTPC Agreement.

The Royalty Interest Payments are subject to an annual maximum “cap” of $ 13.0 million, after which the Company will receive 85 % of the Royalty Interest Payments for the remainder of that year.

The Royalty Interest Payments are also subject to an aggregate maximum “cap” of $ 150.0 million, after which the Royalty Interest Payments will revert back to the Company.

The Company retains the right to receive all potential future regulatory milestones for Vafseo under the MTPC Agreement.

At the transaction date, the Company recorded the proceeds received from HCR of $ 44.8 million (net of certain transaction expenses) as a liability and is amortizing it using the effective interest method over the life of the arrangement.

The liability related to sale of future royalties and the debt amortization are based on the Company’s current estimates of future royalties expected to be paid over the life of the arrangement.

To the extent the Company’s estimates of future royalty payments are greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, the Company will adjust the effective interest rate and recognize related non-cash interest expense on a prospective basis.

In the event the Company's estimates of future royalties are less than the proceeds from the sale of future royalties, the Company will not recognize related non-cash interest expense.

On a quarterly basis, the Company reassesses the effective interest rate and adjusts the rate prospectively as needed.

The annual effective interest rate as of March 31, 2024 was 0 % and, therefore the Company did not recognize any non-cash interest expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

As a result of its ongoing involvement in the cash flows related to the royalties and sales milestones in the MTPC Territory, the Company will continue to account for these royalties as non-cash royalty revenue which is reflected in license, collaboration and other revenue in the unaudited condensed consolidated statements of operations and comprehensive loss.

A more detailed description of Royalty Agreement can be found in Note 8, Deferred Revenue, Refund Liability and Liability Related to Sale of Future Royalties , of the Notes to the Consolidated Financial Statements in the 2023 Form 10-K.

During each of the three months ended March 31, 2024 and 2023, the Company paid $ 0.4 million of royalties to HCR and as of March 31, 2024 and December 31, 2023 the balances were as follows (in thousands):

Liability related to sale of future royalties March 31, 2024 December 31, 2023

Current portion (included in accrued expenses and other current liabilities) $ 1,994 $ 2,048

Long-term portion 53,498 54,013

Total liability related to sale of future royalties $ 55,492 $ 56,061

Cambridge Lease

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Under the Cambridge Lease, the Company leases approximately 65,167 square feet of office, storage and lab space in Cambridge, Massachusetts.

The term of the Cambridge Lease with respect to the 59,216 square feet of office and storage space expires on September 11, 2026, with one five-year extension option available.

The term of the Cambridge Lease with respect to the 5,951 square feet of lab space was set to expire on January 31, 2025, with an extension option for one additional period through September 11, 2026.

On May 6, 2024, the Company extended the term of the Cambridge Lease with respect to the lab space through September 11, 2026.

See Note 16, Subsequent Events , for further information.

The Cambridge Lease is non-cancelable and is classified as an operating lease.

The renewal option as it relates to the office and storage portion of the Cambridge Lease was not included in the calculation of the right-of-use asset and operating lease liability as the renewal is not reasonably certain.

However, the renewal option as it relates to the lab portion of the Cambridge Lease was included in the calculation of the right-of-use assets and operating lease liabilities as the renewal is reasonably certain.

The Cambridge Lease does not contain residual value guarantees.

In arriving at the operating lease liabilities, the Company applied incremental borrowing rates ranging from 6.65 % to 6.94 %, which were based on the remaining lease term at either the date of adoption of ASC 842 or the effective date of any subsequent lease term extensions.

As of March 31, 2024, the remaining lease term for the Cambridge Lease was 2.45 years.

Operating lease costs were $ 1.2 million and $ 1.8 million for the three months ended March 31, 2024 and 2023, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 1.4 million and $ 1.7 million for the three months ended March 31, 2024 and 2023, respectively.

The security deposit in connection with the Cambridge Lease is $ 1.7 million in the form of a letter of credit, which is included as restricted cash in other long-term assets in the Company’s condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.

Sublease and Former Boston Lease

Previously, the Company leased 27,924 square feet of office space in Boston, Massachusetts, or Boston Lease , under a non-cancelable operating lease that was set to expire in July 2031.

The Company subleased the entire Boston Lease, effective October 2019 through February 2023.

The Company did not record any rental income for the three months ended March 31, 2024 and recorded $ 0.3 million in rental income as other income in the unaudited condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2023.

In May 2023, pursuant to an Assignment and Assumption of Lease Agreement, or Lease Assignment Agreement, the Company assigned all of its rights, title and interest in, to, and under the Boston Lease to LG Chem Life Sciences Innovation Center, Inc., or LG Chem , and made a payment to LG Chem of $ 1.3 million.

As of May 2023, LG Chem assumed all of the rights and obligations of the Company under the Boston Lease and the Company has no further obligations for rent or other payments under the Boston Lease.

In accordance with ASC 842, Leases , the Company wrote off the right-of-use asset and lease liability associated with the Boston Lease, and recognized the difference between the right-of-use asset and the lease liability offset by the $ 1.3 million payment as a loss on lease termination in the unaudited condensed consolidated statement of operations and comprehensive loss of $ 0.5 million during the three months ended June 30, 2023.

Future Lease Commitments

Future commitments under the Cambridge Lease are as follows (in thousands):

Lease Commitments

Remainder of 2024 $ 4,308

Total lease commitments $ 13,740

present value adjustment ( 1,033 )

Current and long-term operating lease liabilities $ 12,707

COMMITMENTS AND CONTINGENCIES

Manufacturing and Unconditional Purchase Commitment Agreements

Siegfried Manufacturing

The Company's contractual obligations include a commercial supply agreement with Siegfried Evionnaz SA, or Siegfried, to supply commercial drug substance for Auryxia.

The Company and Siegfried entered into a Master Manufacturing Services and Supply Agreement, most recently amended in February 2023, or the Siegfried Agreement , under which the Company has

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agreed to purchase a minimum quantity of drug substance of Auryxia at a predetermined price.

As of March 31, 2024, the Company is required to purchase a minimum quantity of drug substance for Auryxia annually at a total cost of approximately $ 22.0 million through the end of 2026.

The term of the Siegfried Agreement expires on December 31, 2026.

The Siegfried Agreement provides the Company and Siegfried with certain early termination rights.

The excess firm commitment liability recorded in other long-term liabilities related to the Company's contractual purchase commitments with Siegfried was $ 1.5 million as of March 31, 2024 and December 31, 2023.

Patheon Manufacturing

On March 11, 2020, the Company entered into a Supply Agreement with Patheon Inc., or Patheon, or the Patheon Agreement , under which Patheon will manufacture Vafseo drug product for commercial use under a volume-based pricing structure through June 30, 2025, renewing annually unless either party gives the other party eighteen months ' prior written notice.

Under the Patheon Agreement, the Company agreed to purchase from Patheon a certain percentage of the estimated global demand for Vafseo drug product based on certain quarterly and annual forecasts provided by the Company.

As of March 31, 2024, the Company had no minimum commitments with Patheon, however, as estimated global demand fluctuates, the Company may have future obligations under the Patheon Agreement.

WuXi STA Manufacturing

In April 2020, the Company entered into a Supply Agreement with STA Pharmaceutical Hong Kong Limited, a subsidiary of WuXi AppTec, or WuXi STA , or, as amended, the WuXi STA DS Agreement .

Under the WuXi STA DS Agreement, WuXi STA will manufacture Vafseo drug substance for commercial use under a volume-based pricing structure through April 2, 2029.

Pursuant to the WuXi STA DS Agreement, the Company has agreed to purchase a certain percentage of the global demand for Vafseo drug substance from WuXi STA.

As of March 31, 2024, the Company has committed to purchase $ 13.4 million of Vafseo drug substance from WuXi STA through the end of 2024.

On February 10, 2021, the Company entered into a Supply Agreement with WuXi STA, or the WuXi STA DP Agreement , under which WuXi STA will manufacture and supply Vafseo drug product for commercial purposes under a volume-based pricing structure through February 10, 2025.

The Vafseo drug product price is reviewed annually by the Company and WuXi STA.

The Company will also reimburse WuXi STA for certain reasonable expenses.

Pursuant to the WuXi STA DP Agreement, the Company has agreed to purchase a certain percentage of global demand for Vafseo drug product from WuXi STA.

The WuXi STA DP Agreement may be renewed or extended by mutual agreement of the Company and WuXi STA with at least eighteen months ’ prior written notice.

The WuXi STA DP Agreement allows the Company to terminate the relationship on 180 calendar days’ prior written notice to WuXi STA for any reason.

In addition, each party has the ability to terminate the WuXi STA DP Agreement upon the occurrence of certain conditions.

BioVectra - Former Manufacturing and Unconditional Purchase Commitments

Under the Manufacture and Supply Agreement with BioVectra, Inc., or BioVectra , and the Amended and Restated Product Manufacture and Supply and Facility Construction Agreement with BioVectra, the Company agreed to purchase minimum quantities of Auryxia drug substance annually at predetermined prices as well as reimburse BioVectra for certain costs in connection with construction of a new facility for the manufacture and supply of Auryxia drug substance.

On December 22, 2022, the Company and BioVectra entered into a termination agreement, or B ioVectra Termination Agreement , pursuant to which the parties agreed, among other things, to terminate, effective immediately, any and all existing agreements entered into between the parties in connection with the manufacture and supply, by BioVectra to the Company, of Auryxia drug substance.

Under the terms of the BioVectra Termination Agreement, each of the Company and BioVectra have released one another from all existing and future claims and liabilities and the return of certain materials and documents.

In addition, the Company agreed to pay BioVectra a total of $ 32.5 million consisting of (i) an upfront payment of $ 17.5 million and (ii) six quarterly payments of $ 2.5 million which commenced in April 2024, totaling $ 15.0 million.

The upfront payment of $ 17.5 million was made during the quarter ended December 31, 2022 and was recognized to cost of product and other revenue.

In accordance with ASC 420, Exit or Disposal Cost Obligations , the Company recognized a liability and corresponding expense for the remaining termination fees based on estimated fair value as of December 22, 2022.

The Company imputed interest on the liability for the remaining termination fees at a rate of 17.0 % per annum, which was determined based on certain factors, including the Company's credit rating, comparable securities yield, and expected repayment period of the remaining termination fees.

The Company recorded an initial discount on the remaining termination fees on the consolidated balance sheet on the date of the termination.

This resulted in the recording of a liability and corresponding charge to cost of goods sold of $ 11.2 million during the quarter ended December 31, 2022.

The discount on the liability balance is being amortized to interest expense using the effective interest rate method over the term of the liability.

The amortization of the discount was $ 0.5 million for each of the three months ended March 31, 2024 and March 31, 2023.

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In-Licensing - Panion License Agreement

On April 17, 2019, the Company and Panion & BF Biotech, Inc., or Panion , entered into a second amended and restated license agreement, or Panion Amended License Agreement , which amended and restated in full the license agreement between the Company and Panion.

The Panion Amended License Agreement provides the Company with an exclusive license under Panion-owned know-how and patents with the right to sublicense, develop, make, use, sell, offer for sale, import and export ferric citrate worldwide, excluding certain Asian-Pacific countries, or the Licensor Territory .

The Panion Amended License Agreement also provides Panion with an exclusive license under the Company-owned patents, with the right to sublicense (with the Company’s written consent), develop, make, use, sell, offer for sale, import and export ferric citrate in certain countries in the Licensor Territory.

Under the Panion Amended License Agreement, Panion is eligible to receive from the Company or any sublicensee royalty payments based on a mid-single digit percentage of sales of ferric citrate in the Company’s licensed territories.

The Company is eligible to receive from Panion or any sublicensee royalty payments based on a mid-single digit percentage of net sales of ferric citrate in Panion’s licensed territories.

See Note 10, Commitments and Contingencies , of the Notes to the Consolidated Financial Statements in the 2023 Form 10-K for a more detailed description of this license agreement.

The Company incurred royalty payments due to Panion of approximately $ 1.9 million and $ 2.6 million during the three months ended March 31, 2024 and 2023, respectively, relating to the Company’s sales of Auryxia in the U.S.

and JT and Torii’s net sales of Riona in Japan.

Other Third-Party Contracts

The Company contracts with various organizations to conduct R&D activities with remaining contract costs to the Company of approximately $ 47.9 million at March 31, 2024.

The scope of the services under these R&D contracts can be modified and the contracts cancelled by the Company upon written notice.

In some instances, the contracts may be cancelled by the third party upon written notice.

Litigation and Related Matters

The Company is involved from time to time in various legal proceedings arising in the normal course of business.

The Company provides disclosure when a loss in excess of any reserve is reasonably possible, and if estimable, the Company discloses the potential loss or range of possible loss.

Significant judgment is required to assess the likelihood of various potential outcomes and the quantification of loss in those scenarios.

Changes in the Company’s estimates could have a material impact and are recorded as litigation progresses and new information comes to light.

Although the outcomes of potential legal proceedings are inherently difficult to predict, the Company does not expect the resolution of current legal proceedings to have a material adverse effect on its financial position, results of operations or cash flows of the Company.

Guarantees and Indemnifications

As permitted under Delaware law, the Company may indemnify its officers, directors and employees for certain events or occurrences that happen by reason of their relationship with, or position held at, the Company.

The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

The Company maintains director and officer liability insurance coverage that is intended to cover a portion of amounts that may be due with respect to indemnification after a deductible is met.

Further, the Company is a party to a variety of agreements in the ordinary course of business under which it may be obligated to indemnify third parties with respect to certain matters.

For the three months ended March 31, 2024 and 2023, the Company did not experience any losses related to these indemnification obligations, and no claims were outstanding as of March 31, 2024.

The Company does not have any claims related to these indemnification obligations and consequently concluded that the fair value of these obligations is negligible and no related accruals were recorded.

PRODUCT REVENUE AND RESERVES FOR VARIABLE CONSIDERATION

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sales of Auryxia.

Total net product revenue was $ 40.1 million and $ 42.0 million for the three months ended September 30, 2023 and 2022, respectively, and $ 117.1 million and $ 126.7 million for the nine months ended September 30, 2023 and 2022, respectively.

Total net product revenue was $ 31.0 million and $ 34.7 million for the three months ended March 31, 2024 and 2023, respectively.

Product revenue allowance and reserve categories were as follows:

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(in thousands) Chargebacks

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Credits/payments made ( 2,216 ) ( 18,282 ) ( 1,974 ) ( 22,472 )

Balance at September 30, 2023 $ 843 $ 23,529 $ 4,617 $ 28,989

Balance at March 31, 2024 $ 1,208 $ 13,564 $ 5,798 $ 20,570

(in thousands) Chargebacks

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Credits/payments made ( 1,997 ) ( 22,321 ) ( 1,631 ) ( 25,949 )

Balance at September 30, 2022 $ 1,149 $ 22,533 $ 10,231 $ 33,913

Chargebacks, discounts and estimated product returns are recorded as a reduction of revenue in the period the related product revenue is recognized in the unaudited condensed consolidated statement of operations and comprehensive loss.

Chargebacks are recorded as a reduction to accounts receivable while discounts, rebates, fees and other deductions are recorded with a corresponding increase to accrued expenses and other current liabilities or accounts payable on the unaudited condensed consolidated balance sheets.

Estimated product returns for the period related to product sales are recorded as other long-term liabilities in the unaudited condensed consolidated balance sheet.

Accounts receivable, net related to product sales, was approximately $ 21.3 million and $ 37.3 million as of September 30, 2023 and December 31, 2022, respectively.

Balance at March 31, 2023 $ 488 $ 20,142 $ 10,363 $ 30,993

Estimated product returns on product sales that are not expected to be returned within one year are recorded as other long-term liabilities in the condensed consolidated balance sheets.

Accounts receivable, net related to product sales, was approximately $ 23.9 million and $ 35.9 million as of March 31, 2024 and December 31, 2023, respectively.

LICENSE, COLLABORATION AND OTHER REVENUE

The Company recognized the following revenues from its license, collaboration and other revenue agreements (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

License, collaboration and other revenue:

Three Months Ended March 31,

Entity Description 2024 2023

MTPC License and Product Supply of Vafseo in Japan

$ 412 $ 4,162

MTPC Collaboration Agreement $ 487 $ 5,487 $ 5,165 $ 13,885

Agreement — — 2,225 86,773

Otsuka International Agreement — — — 5,503

Total collaboration revenue $ 487 $ 5,487 $ 7,390 $ 106,161

JT and Torii Sublicense Agreement 1,441 1,238 3,969 3,871

Medice License Agreement — — 10,000 —

Total license, collaboration and other revenue $ 1,928 $ 6,725 $ 21,359 $ 110,032

JT and Torii License and royalties related to the sale of Riona in Japan 1,186 1,137

Total license and other revenue $ 1,598 $ 5,299

The following tables present changes in the Company’s contract assets and liabilities related to license and other revenue (in thousands):

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The following tables present changes in the Company’s contract assets and liabilities (in thousands):

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Period Additions Deductions Balance

Contract assets:

Contract asset:

Accounts receivable (1)

$ 3,333 $ 2,327 $ ( 2,968 ) $ 2,692

Prepaid expenses and other current assets $ 781 $ — $ ( 781 ) $ —

Contract liability:

Deferred revenue $ 43,296 $ 695 $ — $ 43,991

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Period Additions Deductions Balance

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Deferred revenue $ 47,034 $ — $ ( 3,738 ) $ 43,296

Accounts payable $ 3,171 $ — $ ( 3,171 ) $ —

(1) Excludes accounts receivable related to amounts due to the Company from product sales of Auryxia which are included in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2023 and 2022.

The Company recognized the following revenues as a result of changes in the contract asset and contract liability balances in the respective periods (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Revenue Recognized in the Period:

2023 2022 2023 2022

Deferred revenue — beginning of the period $ — $ 3,738

During the three and nine months ended September 30, 2023 and 2022, the Company recognized no revenue from performance obligations satisfied in previous periods.

During each of the three months ended March 31, 2024 and 2023, the Company recognized no revenue from performance obligations satisfied in previous periods.

Medice License Agreement

On May 24, 2023, or Medice Effective Date , the Company and MEDICE Arzneimittel Pütter GmbH & Co.

KG, or Medice , entered into a License Agreement, or the Medice License Agreement , pursuant to which the Company granted to Medice an exclusive license to develop and commercialize Vafseo for the treatment of anemia in adult patients with CKD in the EEA, the UK, Switzerland and Australia, or the Medice Territory .

Under the Medice License Agreement, the Company received an up-front payment of $ 10.0 million and is eligible to receive the following payments:

(i) commercial milestone payments up to an aggregate of $ 100.0 million, and

(ii) tiered royalties ranging from 10 % to 30 % of Medice's annual net sales of Vafseo in the Medice Territory, subject to reduction in certain circumstances.

The royalties will expire on a country-by-country basis upon the latest to occur of (a) the date of expiration of the last-to-expire valid claim of any Company, Medice or joint patent that covers Vafseo in such country in the Medice Territory, (b) the date of expiration of data or regulatory exclusivity for Vafseo in such country in the Medice Territory and (c) the date that is twelve years from first commercial sale of Vafseo in such country in the Medice Territory.

Under the Medice License Agreement, the Company retains the right to develop Vafseo for non-dialysis patients with anemia due to CKD in the Medice Territory.

If the Company develops Vafseo for non-dialysis patients and Vafseo receives marketing approval in the Medice Territory, Medice will commercialize Vafseo for both indications in the Medice Territory.

In this instance, the Company would receive 70 % of the net product margin of any sales of Vafseo in the non-dialysis patient population, unless Medice requests to share the cost of the development necessary to gain approval to market Vafseo for non-dialysis patients in the Medice Territory and the parties agree on alternative financial terms.

If the Company develops Vafseo for non-dialysis patients, the Company has determined that the activities under the Medice License Agreement represent joint operating activities in which both parties are active participants and of which both parties are exposed to

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significant risks and rewards that are dependent on the success of the activities.

Accordingly, if the Company develops Vafseo for non-dialysis patients, the Company will account for the joint activities in accordance with ASC No.

808, Collaborative Arrangements , or ASC 808 .

Additionally, the Company has determined that in the context of the development of Vafseo for non-dialysis patients, Medice does not represent a customer as contemplated by ASC 606-10-15, Revenue from Contracts with Customers – Scope and Scope Exceptions .

As a result, the activities conducted pursuant to development activities for Vafseo for non-dialysis patients will be accounted for as a component of the related expense in the period incurred.

The Medice License Agreement expires on the date of expiration of all payment obligations due thereunder with respect to Vafseo in the last country in the Medice Territory, unless earlier terminated in accordance with the terms of the Medice License Agreement.

Either party may, subject to a cure period, terminate the Medice License Agreement in the event of the other party's uncured material breach.

Medice has the right to terminate the Medice License Agreement in its entirety for convenience upon twelve months ' prior written notice delivered on or after the date that is twelve months after the Medice Effective Date.

The Medice License Agreement provides that the Company and Medice will enter into a supply agreement pursuant to which the Company will supply Vafseo to Medice for commercial use in the Medice Territory.

As of March 31, 2024, the Company and Medice have not yet entered into a supply agreement.

The Company evaluated the elements of the Medice License Agreement in accordance with the provisions of ASC 606 and concluded Medice is a customer.

The Company identified one performance obligation in connection with its obligations under the Medice License Agreement, which is the license, or License Performance Obligation .

The transaction price at inception was comprised of the up-front payment of $ 10.0 million, of which the Company received $ 8.6 million during the quarter ended June 30, 2023.

The remaining $ 1.4 million was withheld by the German Federal Tax Office and is included in other long-term assets on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.

Pursuant to the terms of the Medice License Agreement, the up-front payment of $ 10.0 million is non-refundable and non-creditable against any other amount due to the Company and was allocated to the License Performance Obligation, which was satisfied as of the Medice Effective Date.

In accordance with ASC 606, the Company will recognize sales-based royalties and milestone payments at the later of when the performance obligation is satisfied or the related sales occur.

Medice Letter Agreement

On December 6, 2023, the Company and Medice entered into a letter agreement, or the Medice Letter Agreement , pursuant to which the Company agreed to sell to Medice a partial batch of Vafseo in order to achieve packaging validation for the Medice Territory.

The Company recognizes revenue under this arrangement when risk of loss passes to Medice and delivery has occurred.

As of March 31, 2024, there was no accounts receivable, contract assets, payables or deferred revenue recorded in connection with the Medice Letter Agreement.

MTPC Collaboration Agreement

On December 11, 2015, the Company and MTPC entered into the MTPC Agreement, providing MTPC with exclusive development and commercialization rights to vadadustat in Japan and certain other Asian countries, collectively, the MTPC Territory , which was amended effective as of December 2, 2022.

In addition, the Company supplies vadadustat to MTPC for both clinical and commercial use in the MTPC Territory.

On December 11, 2015, the Company and MTPC entered into a Collaboration Agreement, or the MTPC Agreement , providing MTPC with exclusive development and commercialization rights to Vafseo in the MTPC Territory, which was amended effective as of December 2, 2022.

In addition, the Company supplies Vafseo to MTPC for both clinical and commercial use in the MTPC Territory.

In February 2021, the Company entered into the Royalty Agreement with HCR, whereby the Company sold its right to receive royalties and sales milestones under the MTPC Agreement, subject to certain caps and other terms and conditions.

See Note 5 for additional information and Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A for a more detailed description of the MTPC Agreement.

See Note 8, Deferred Revenue, Refund Liability and Liability Related to Sale of Future Royalties , for additional information and Note 12, License, Collaboration and Other Revenue , of the Notes to the Consolidated Financial Statements in the 2023 Form 10-K for a more detailed description of the MTPC Agreement.

The Company evaluated the elements of the MTPC Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, MTPC, is a customer.

The Company identified two performance obligations in connection with its material promises under the MTPC Agreement as follows:

(i) License, Research and Clinical Supply Performance Obligation and (ii) Rights to Future Know-How Performance Obligation .

The Company allocates the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price.

The Company developed a best estimate of the standalone selling price for the Rights to Future Know-How Performance Obligation primarily based on the likelihood that additional intellectual property covered by the license conveyed will be developed during the term of the arrangement and determined it is immaterial.

As such, the Company did not develop a best estimate of standalone selling price for the License, Research and Clinical Supply Performance Obligation and allocated the entire transaction price to this performance obligation.

The deliverables associated with the License, Research and Clinical Supply Performance Obligation were satisfied as of June 30, 2018.

The transaction price was comprised of:

(i) the up-front payment of $ 20.0 million, (ii) the cost for the Phase 2 studies of $ 20.5 million, (iii) the cost of all clinical supply provided to MTPC for the Phase 3 studies, (iv) $ 10.0 million in development milestones received, (v) $ 25.0 million in regulatory milestones received, comprised of $ 10.0 million relating to the NDA filing

(i) the up-front payment of $ 20.0 million, (ii) the cost for the Phase 2 studies of $ 20.5 million, (iii) the cost of all clinical supply provided to MTPC for the Phase 3 studies, (iv) $ 10.0 million in development milestones received, (v) $ 25.0 million in regulatory milestones received and (vi) $ 5.4 million in royalties from net sales of Vafseo.

The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

As of March 31, 2024, all development milestones and $ 25.0 million in regulatory milestones have been achieved.

No other regulatory milestones have been assessed as probable of being achieved and as a result have been fully constrained.

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in Japan and $ 15.0 million relating to regulatory approval of vadadustat in Japan, and (vi) $ 4.4 million in royalties from net sales of Vafseo.

As of September 30, 2023, all development milestones and $ 25.0 million in regulatory milestones have been achieved.

No other regulatory milestones have been assessed as probable of being achieved and as a result have been fully constrained.

The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The Company allocates the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price.

Revenue for the License, Research and Clinical Supply Performance Obligation for the MTPC Agreement is being recognized using a proportional performance method, for which all deliverables have been completed.

During the three and nine months ended September 30, 2023, the Company recognized revenue from MTPC royalties totaling approximately $ 0.5 million and $ 1.4 million, respectively, and approximately $ 0.4 million and $ 1.2 million during the three and nine months ended September 30, 2022, respectively.

As noted above, in February 2021, the Company entered into the Royalty Agreement, whereby the Company sold its right to receive these royalties and sales milestones under the MTPC Agreement, subject to certain caps and other terms and conditions (see Note 5 for additional information).

The revenue is classified as license, collaboration and other revenue in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

As of September 30, 2023, there were no accounts receivable, contract assets, payables or deferred revenue recorded in connection with the MTPC Agreement.

The Company recognizes any revenue from MTPC royalties in the period in which the sales occur.

During each of the three months ended March 31, 2024 and 2023, the Company recognized $ 0.4 million of revenue from MTPC royalties.

The revenue is classified as license and other revenue in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2024, there were no accounts receivable, payables or deferred revenue and $ 0.4 million in contract assets recorded in connection with the MTPC Agreement.

Supply of Drug Product to MTPC

On July 15, 2020, the Company and MTPC entered into a supply agreement, or MTPC Supply Agreement , under which the Company supplies vadadustat drug product to MTPC for commercial use in Japan and certain other Asian countries, as contemplated by the MTPC Agreement.

See Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A for a more detailed description of this supply agreement.

On December 16, 2022, the Company, MTPC and Esteve Química, S.A., or Esteve, executed an Assignment of Supply Agreement, or Esteve Assignment Agreement , pursuant to which the Supply Agreement between the Company and Esteve, or Esteve Agreement (see Note 12) was assigned to MTPC.

The Esteve Assignment Agreement transferred the rights and obligations of the Company under the Esteve Agreement to MTPC, including the obligations under certain purchase orders issued by the Company and accepted by Esteve that will continue to have a binding effect on MTPC to take delivery of the product from Esteve in accordance with the terms of the Esteve Agreement.

On July 15, 2020, the Company and MTPC entered into a supply agreement, or MTPC Supply Agreement , under which the Company supplies Vafseo drug product to MTPC for commercial use in Japan and certain other Asian countries, as contemplated by the MTPC Agreement.

See Note 12, License, Collaboration and Other Revenue , of the Notes to the Consolidated Financial Statements in the 2023 Form 10-K for a more detailed description of this supply agreement.

The Esteve Assignment Agreement transferred the rights and obligations of the Company under the Esteve Agreement to MTPC.

The Company has no further obligation to take delivery of, or pay for, product delivered by Esteve.

The Company recognized no revenue and $ 3.7 million in revenue under the MTPC Supply Agreement during the three and nine months ended September 30, 2023, respectively, and $ 5.1 million and $ 12.7 million in revenue during the three and nine months ended September 30, 2022, respectively.

Due to the Esteve Agreement, the Company no longer records accounts receivable, deferred revenue or other current liabilities relating to the MTPC Supply Agreement.

Cyclerion License Agreement

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

Under the terms of the Cyclerion Agreement, the Company made an upfront payment of $ 3.0 million in cash to Cyclerion, which was paid and recorded to research and development expense in June 2021.

Substantially all of the fair value of the assets acquired in conjunction with the Cyclerion Agreement was concentrated in the acquired license.

As a result, the Company accounted for this transaction as an asset acquisition under ASU No.

2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business .

The upfront payment was charged to expense at acquisition, as it relates to a development stage compound with no alternative future use.

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

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

A more detailed description of this agreement can be found in Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A.

CSL Vifor License Agreement

O n May 12, 2017, the Company entered into a License Agreement, as amended and restated on February 18, 2022, or the Vifor Agreement, with Vifor (International) Ltd.

(now a part of CSL Limited), or CSL Vifor , which grants CSL Vifor an exclusive license to sell vadadustat to Fresenius Kidney Care Group LLC, an affiliate of Fresenius Medical Care North America, or FMCNA , and its affiliates, including Fresenius Kidney Care Group LLC, to certain third-party dialysis organizations approved by the Company, to independent dialysis organizations that are members of certain group purchasing organizations and certain non-retail specialty pharmacies, collectively, the Supply Group , in the United States, or Vifor Territory .

CSL Vifor has agreed not to sell or otherwise supply vadadustat until the FDA has granted regulatory approval for vadadustat for the treatment of

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anemia due to CKD in adult patients with DD-CKD in the Vifor Territory and until CSL Vifor has entered a supply agreement with the applicable member of the Supply Group.

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

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

If the Company so terminates for convenience, subject to specified exceptions, the Company will pay a termination fee to CSL Vifor.

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

Investment Agreement

In connection with the Vifor Agreement, in May 2017, the Company and CSL Vifor entered into an investment agreement, or First Investment Agreement , pursuant to which the Company sold an aggregate of 3,571,429 shares of the Company’s common stock, or 2017 Shares, to CSL Vifor at a price per share of $ 14.00 for a total of $ 50.0 million.

On February 18, 2022, in connection with the amendment and restatement, the Company and CSL Vifor entered into an investment agreement, or Second Investment Agreement , pursuant to which the Company sold an aggregate of 4,000,000 shares of its common stock, or 2022 Shares, to CSL Vifor at a price per share of $ 5.00 for a total of $20 million on February 22, 2022.

The amounts representing the premium over the closing stock price and the amount paid of $ 4.7 million under the First Investment Amendment and $13.6 million under the Second Investment Amendment were determined by the Company to represent consideration related to the Vifor Agreement and recorded as long-term deferred revenue in long-term liabilities on the unaudited condensed consolidated financial statements.

CSL Vifor agreed to a lock-up restriction not to sell the 2017 Shares or the 2022 Shares for a period of time following the effective date of the First Investment Agreement and Second Investment Agreement, respectively, which restriction with respect to the 2017 Shares has expired.

The First Investment Agreement and the Second Investment Agreement each contain a customary standstill agreement.

In addition, the First Investment Agreement and Second Investment Agreement contain voting agreements made by CSL Vifor with respect to the 2017 Shares and 2022 Shares, respectively.

See Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A for a more detailed description of the Vifor Agreement.

Revenue Recognition

The Company identified one performance obligation under the Vifor Agreement, as amended, the deliverable of the license.

Thus until the license is delivered, the transaction price of $ 43.3 million which is comprised of the up-front payment of $ 25.0 million and the premiums paid by CSL Vifor on the First Investment Agreement and Second Investment Agreement of $ 4.7 million and $ 13.6 million, respectively, will remain in long-term deferred revenue in the accompanying unaudited condensed consolidated balance sheet.

Under the Vifor Agreement, these payments from CSL Vifor are non-refundable and non-creditable against any other amount due to the Company.

In addition, if the Centers for Medicare & Medicaid Services, or CMS, determines that vadadustat is excluded from the Transitional Drug Add-on Payment Adjustment, or TDAPA , the Company can terminate the Vifor Agreement and will be required to repay the up-front payment of $ 25.0 million and the premiums paid by CSL Vifor of $ 18.3 million.

Refund Liability to Customer

Pursuant to the Vifor Agreement, CSL Vifor contributed $ 40.0 million to a working capital fund established to fund approximately 50 % of the Company’s costs of purchasing vadadustat from its contract manufacturers, or Working Capital

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Fund , for the supply of vadadustat for the Vifor Territory already delivered or to be delivered to the Company through the end of 2023.

The amount of the Working Capital Fund can be reviewed at specified intervals and may be adjusted based on a number of factors including outstanding supply commitments for vadadustat and agreed upon vadadustat inventory levels held by the Company for the Vifor Territory.

Upon termination or expiration of the Vifor Agreement for any reason other than convenience by CSL Vifor (including following receipt of the CRL for vadadustat), the Company will be required to refund the outstanding balance of the Working Capital Fund on the date of termination or expiration.

The Company has determined the Working Capital Fund itself does not represent an obligation to transfer goods or services to CSL Vifor in the future and thus under ASC 606 was recorded as a refund liability.

The refund liability is considered a debt arrangement with zero coupon interest and the Company imputes interest on the refund liability at a rate of 15.0 % per annum, which was determined based on certain factors, including the Company's credit rating, comparable securities yield and the expected repayment period.

The discount on the refund liability is being amortized to interest expense using the effective interest method over the expected term of the Vifor Agreement.

The deferred gain is being amortized to interest income on a straight-line basis over the expected term of the Vifor Agreement.

The amortization of the discount was $ 0.7 million and $ 2.4 million for the three and nine months ended September 30, 2023, respectively, and $ 1.1 million and $ 2.3 million for the three and nine months ended September 30, 2022, respectively.

The amortization of the deferred gain was $ 1.0 million and $ 3.0 million for the three and nine months ended September 30, 2023, respectively, and $ 0.9 million and $ 1.8 million for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, the $ 40.3 million refund liability is classified as a long-term liability based on management's estimated timing of the repayment of the refund liability to Vifor exceeding one-year.

Panion License Agreement

The Company had a license agreement, which was amended from time to time, with Panion & BF Biotech, Inc., or Panion , under which Keryx Biopharmaceuticals, Inc., or Keryx , the Company's wholly owned subsidiary, was the contracting party, or Panion License Agreement , pursuant to which Keryx in-licensed the exclusive worldwide rights, excluding certain Asian-Pacific countries, or Licensor Territory, for the development and commercialization of ferric citrate.

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

The Panion Amended License Agreement provides Keryx with an exclusive license under Panion-owned know-how and patents with the right to sublicense, develop, make, use, sell, offer for sale, import and export ferric citrate worldwide, excluding the Licensor Territory.

The Panion Amended License Agreement also provides Panion with an exclusive license under the Keryx-owned patents, with the right to sublicense (with the Company’s written consent), develop, make, use, sell, offer for sale, import and export ferric citrate in certain countries in the Licensor Territory.

The Company is eligible to receive from Panion or any sublicensee royalty payments based on a mid-single digit percentage of net sales of ferric citrate in Panion’s licensed territories.

See Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A for a more detailed description of this license agreement.

The Company recognized royalty payments due to Panion of approximately $ 3.1 million and $ 9.3 million during the three and nine months ended September 30, 2023, respectively, and $ 2.9 million and $ 9.5 million during the three and nine months ended September 30, 2022, respectively, relating to the Company’s sales of Auryxia in the United States and JT and Torii’s net sales of Riona in Japan.

The Company does not recognize revenue under this arrangement until risk of loss on the drug product passes to MTPC and delivery has occurred and MTPC has accepted the product.

The Company recognized immaterial revenue and $ 3.7 million in revenue under the MTPC Supply Agreement during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, there were $ 0.7 million in accounts receivable, $ 0.7 million in deferred revenue and no other current liabilities relating to the MTPC Supply Agreement.

JT and Torii Sublicense Agreement

The Company has an Amended and Restated Sublicense Agreement, which was amended in June 2013, with JT and Torii, or JT and Torii Sublicense Agreement , under which Keryx, the Company’s wholly owned subsidiary, remains the contracting party.

Under the JT and Torii Sublicense Agreement, JT and Torii obtained the exclusive sublicense rights for the development and commercialization of ferric citrate hydrate in Japan.

The Company has an Amended and Restated Sublicense Agreement, which was amended in June 2013, with JT and Torii, or JT and Torii Sublicense Agreement , under which JT and Torii obtained the exclusive sublicense rights for the development and commercialization of ferric citrate hydrate in Japan.

JT and Torii are responsible for the future development and commercialization costs in Japan.

See Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A for a more detailed description of this sublicense agreement.

See Note 12, License, Collaboration and Other Revenue , of the Notes to the Consolidated Financial Statements in the 2023 Form 10-K for a more detailed description of this sublicense agreement.

The Company evaluated the elements of the JT and Torii Sublicense Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, JT and Torii, is a customer.

The Company identified two performance obligations in connection with its obligations under the JT and Torii Sublicense Agreement:

(i) License and Supply Performance Obligation and (ii) Rights to Future Know-How Performance Obligation .

The Company allocated the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price.

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Company did not develop a best estimate of standalone selling price for the License and Supply Performance Obligation and allocated the entire transaction price to this performance obligation.

The Company recognized license revenue of $ 1.4 million and $ 4.0 million during the three and nine months ended September 30, 2023, respectively, and $ 1.2 million and $ 3.9 million during the three and nine months ended September 30, 2022, respectively, related to royalties earned on net sales of Riona in Japan.

As such, the Company allocated the entire transaction price to the License and Supply Performance Obligation.

The Company recognized license revenue of $ 1.2 million and $ 1.1 million during the three months ended March 31, 2024 and 2023, respectively, related to royalties earned on net sales of Riona in Japan.

The Company records the associated mid-single digit percentage of net sales royalty expense due to Panion, the licensor of Riona, in the same period as the royalty revenue from JT and Torii is recorded.

Averoa License Agreement

On December 22, 2022, the Company and Averoa SAS, or Averoa, entered into a license agreement, or Averoa License Agreement , pursuant to which the Company granted to Averoa an exclusive license to develop and commercialize ferric citrate, or Averoa Licensed Product , in the European Economic Area, Turkey, Switzerland and the United Kingdom, or Averoa Territory .

Under the Averoa License Agreement, the Company is entitled to receive tiered escalating royalties ranging from a mid-single digit percentage to a low double-digit percentage of Averoa's annual net sales in the Averoa Territory, including certain minimum royalty amounts in certain years, and subject to reduction in certain circumstances.

The Company and Averoa have established a joint steering committee to oversee the development, manufacturing and commercialization of the Averoa Licensed Product in the Averoa Territory.

The Averoa License Agreement expires on the date of expiration of all royalty obligations due thereunder with respect to the Averoa Licensed Product on a country-by-country basis in the Averoa Territory, unless earlier terminated in accordance with the Averoa License Agreement .

The Averoa License Agreement provides that the Company and Averoa will enter into a supply agreement pursuant to which the Company will supply the Averoa Licensed Product to Averoa for commercial use in the Averoa Territory.

The Company will have the right to terminate the supply agreement upon 24 months' notice, which may be provided on or after January 1, 2024.

As of September 30, 2023, the Company and Averoa have not yet entered into a supply agreement.

A more detailed description of the Averoa License Agreement can be found in Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A.

Medice License Agreement

On May 24, 2023, or Medice Effective Date , the Company and Medice entered into the Medice License Agreement, pursuant to which the Company granted to Medice an exclusive license to develop and commercialize vadadustat, or Medice Licensed Product, for the treatment of anemia in adult patients with chronic kidney disease in the Medice Territory.

Under the Medice License Agreement, the Company received an up-front payment of $ 10.0 million and is entitled to receive the following payments:

(i) commercial milestone payments up to an aggregate of $ 100.0 million, and

(ii) tiered royalties ranging from 10 % to 30 % of Medice's annual net sales of the Medice Licensed Product in the Medice Territory, subject to reduction in certain circumstances.

The royalties will expire on a country-by-country basis upon the latest to occur of (a) the date of expiration of the last-to-expire valid claim of any Company, Medice or joint patent that covers the Medice Licensed Product in such country in the Medice Territory, (b) the date of expiration of data or regulatory exclusivity for the Medice Licensed Product in such country in the Medice Territory and (c) the date that is 12 years from first commercial sale of the Medice Licensed Product in such country in the Medice Territory.

Under the Medice License Agreement, the Company retains the right to develop the Medice Licensed Product for non-dialysis patients with anemia due to chronic kidney disease in the Medice Territory.

If the Company develops the Medice Licensed Product for non-dialysis patients and such Medice Licensed Product receives marketing approval in the Medice Territory, Medice will commercialize the Medice Licensed Product for both indications in the Medice Territory.

In this instance, the Company would receive 70 % of the net product margin of any sales of the Medice Licensed Product in the non-dialysis patient population, unless Medice requests to share the cost of the development necessary to gain approval to market the Medice Licensed Product for non-dialysis patients in the Medice Territory and the parties agree on alternative financial terms.

If the Company develops the licensed product for non-dialysis patients, the Company has determined that the activities under the Medice License Agreement represent joint operating activities in which both parties are active participants and of which both parties are exposed to significant risks and rewards that are dependent on the success of the activities.

Accordingly, if the Company develops the Medice Licensed Product for non-dialysis patients the Company will account for the joint activities in accordance with ASC No.

808, Collaborative Arrangements, or ASC 808 .

Additionally, the Company has determined that in the

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

context of the development of the Medice Licensed Product for non-dialysis patients, Medice does not represent a customer as contemplated by ASC 606-10-15, Revenue from Contracts with Customers – Scope and Scope Exceptions.

As a result, the activities conducted pursuant to development activities for the Medice Licensed Product for non-dialysis patients will be accounted for as a component of the related expense in the period incurred.

The Company and Medice expect in the future to establish a joint steering committee to oversee the development and commercialization of the Medice Licensed Product in the Medice Territory.

The Medice License Agreement expires on the date of expiration of all payment obligations due thereunder with respect to the Medice Licensed Product in the last country in the Medice Territory, unless earlier terminated in accordance with the terms of the Medice License Agreement.

Either party may, subject to a cure period, terminate the Medice License Agreement in the event of the other party's uncured material breach.

Medice has the right to terminate the Medice License Agreement in its entirety for convenience upon 12 months' prior written notice delivered on or after the date that is 12 months after the Medice Effective Date.

The Medice License Agreement includes customary terms relating to, among others, indemnification, confidentiality, remedies, and representations and warranties.

The Medice License Agreement provides that the Company and Medice will enter into a supply agreement pursuant to which the Company will supply the Medice Licensed Product to Medice for commercial use in the Medice Territory.

Revenue Recognition

The Company evaluated the elements of the Medice License Agreement in accordance with the provisions of ASC 606 and concluded Medice is a customer.

The Company's arrangement with Medice contains one material promise under the contract at inception, which is the exclusive license under the Company's intellectual property to develop and commercialize the Medice Licensed Product in the Medice Territory during the term of the Medice License Agreement and use the Akebia Trademark solely in connection with the commercialization of the Medice Licensed Product, or License Deliverable .

The Company identified one performance obligation in connection with its obligations under the Medice License Agreement, which is the License Deliverable, or License Performance Obligation .

The transaction price at inception was comprised of the up-front payment of $ 10.0 million, of which the Company received $ 8.6 million during the quarter ended June 30, 2023.

The remaining $ 1.4 million was withheld by the German Federal Tax Office and is included in other long-term assets on the condensed consolidated balance sheet as of September 30, 2023.

As such, the Company recognized the $ 10.0 million up-front payment as License, collaboration and other revenue in the condensed consolidated statement of operations and comprehensive loss during the nine months ended September 30, 2023.

In accordance with ASC 606, the Company will recognize sales-based royalties and milestone payments at the later of when the performance obligation is satisfied or the related sales occur.

Past Collaboration and License Agreements

Collaboration and License Agreement with Otsuka Pharmaceutical Co.

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

Agreement, with Otsuka Pharmaceutical Co.

Ltd., or Otsuka .

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

The Company was responsible for leading the development of vadadustat, for which it submitted an NDA to the FDA in March 2021, and for which it received the CRL in March 2022.

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

Agreement and the April 25, 2017 collaboration and license agreement with Otsuka, or Otsuka International Agreement .

On June 30, 2022, the Company and Otsuka entered into the Termination and Settlement Agreement, or Termination Agreement , pursuant to which, among other things, the Company and Otsuka agreed to terminate the Otsuka U.S.

Agreement and the Otsuka International Agreement as of June 30, 2022.

The Company did not recognize collaboration revenue with respect to the Otsuka U.S.

Agreement during the three months ended September 30, 2023 or 2022.

During the nine months ended September 30, 2022, the Company recognized collaboration revenue totaling $ 86.8 million with respect to the Otsuka U.S.

During the nine months ended September 30, 2023, the Company recognized $ 2.2 million in collaboration revenue in connection with the Packaging Validation Transfer Agreement entered into with Otsuka on April 20, 2023.

The Company evaluated the agreement under ASC

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606 and concluded it was closely tied to the prior collaboration revenue agreements and under ASC606 recognized collaboration revenue in the current quarter.

A more detailed description of the Otsuka U.S.

Agreement can be found in Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A.

International Collaboration and License Agreement with Otsuka Pharmaceutical Co.

On April 25, 2017, the Company entered into the Otsuka International Agreement.

The collaboration was focused on the development and commercialization of vadadustat in Europe, Russia, China, Canada, Australia, the Middle East and certain other territories, collectively, the Otsuka International Territory .

As discussed above, the Otsuka International Agreement was terminated on June 30, 2022 pursuant to the Termination Agreement.

During the three and nine months ended September 30, 2022, the Company recognized no collaboration revenue and $ 5.5 million with respect to the Otsuka International Agreement, respectively.

A more detailed description of this collaboration agreement and the Company's evaluation of this agreement under ASC 606 can be found in Note 5 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A.

LIABILITY RELATED TO SALE OF FUTURE ROYALTIES

On February 25, 2021, the Company entered into the Royalty Agreement with HCR, pursuant to which the Company sold to HCR its right to receive royalties and sales milestones for vadadustat in Japan and certain other Asian countries, such countries collectively, the MTPC Territory , and such payments collectively the Royalty Interest Payments, in each case, payable to the Company under the MTPC Agreement, subject to an annual maximum “cap” of $ 13.0 million, or Annual Cap, and an aggregate maximum “cap” of $ 150.0 million, or Aggregate Cap .

The Company received $ 44.8 million from HCR (net of certain transaction expenses) under the Royalty Agreement.

The Company retains the right to receive all potential future regulatory milestones for vadadustat under the MTPC Agreement.

Although the Company sold its right to receive royalties and sales milestones for vadadustat in the MTPC Territory as described above, as a result of its ongoing involvement in the cash flows related to these royalties, the Company will continue to account for these royalties as revenue.

The Company recognized the proceeds received from HCR as a liability and is amortizing it using the effective interest method over the life of the arrangement.

At the transaction date, the Company recorded the net proceeds of $ 44.8 million as a liability.

In order to determine the amortization of the liability, the Company is required to estimate the total amount of future net royalty payments to be made to HCR over the term of the Royalty Agreement.

The total threshold of net royalties to be paid, less the net proceeds received, is recorded as interest expense over the life of the liability.

The Company imputes interest on the unamortized portion of the liability using the effective interest method.

The annual effective interest rate as of September 30, 2023 was 0 % which is reflected as interest expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

On a quarterly basis, the Company reassesses the effective interest rate and adjusts the rate prospectively as needed.

A more detailed description of Royalty Agreement can be found in Note 7 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A.

The activity within the long-term liability account for the nine months ended September 30, 2023 is as follows (in thousands):

Liability related to sale of future royalties, beginning balance at December 31, 2022 $ 57,484

MTPC royalties payable ( 1,423 )

Liability related to sale of future royalties, ending balance at September 30, 2023 $ 56,061

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FAIR VALUE OF FINANCIAL INSTRUMENTS

The tables below present certain assets and liabilities measured at fair value categorized by the level of input used in the valuation of each asset and liability (in thousands):

September 30, 2023

Level 1 Level 2 Level 3 Total Fair Value

Cash equivalents:

Money market funds $ 6,069 $ — $ — $ 6,069

Long-term liability:

Embedded debt derivative $ — $ — $ 760 $ 760

December 31, 2022

Level 1 Level 2 Level 3 Total Fair Value

Cash equivalents:

Money market funds $ 52,442 $ — $ — $ 52,442

Long-term liability:

Embedded debt derivative $ — $ — $ 760 $ 760

Cash and cash equivalents —Money market funds included within cash and cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

Embedded debt derivative —As described in Note 10, the Company’s Loan Agreement with Pharmakon contains certain provisions that change the underlying cash flows of the debt instrument, including a potential extension to the interest-only period dependent on both (i) no event of default having occurred and continuing and (ii) the Company achieving certain regulatory and revenue conditions.

The Company did not meet one of the regulatory conditions and therefore, the Company is no longer eligible for the interest-only extension period and this no longer changes the underlying cash flows of the debt instrument.

The Company concluded the acceleration of the obligations under the Loan Agreement under certain events of default, and under certain circumstances, the application of a default interest rate on all outstanding obligations during the occurrence and continuance of an event of default represent a single compound embedded debt derivative required to be bifurcated from the debt host instrument that is required to be re-measured at fair value on a quarterly basis.

The estimated fair value of the embedded debt derivative on both September 30, 2023 and December 31, 2022 was determined using a scenario-based approach and discounted cash flow model that includes principal and interest payments under various cash flow assumptions.

Should the Company’s assessment of the probabilities around these scenarios change, including for changes in market conditions, there could be a change to the fair value of the embedded debt derivative.

The determination of the fair value of the embedded debt derivative includes inputs not observable in the market and as such, represents Level 3 measurement.

The methodology utilized requires inputs based on certain subjective assumptions, specifically, probabilities of acceleration of the obligations under the Loan Agreement by Pharmakon under certain events of default.

The probabilities used in the valuation of the embedded debt derivative included a 95 % probability that the obligations under the Loan Agreement will not be accelerated due to an event of default under the Loan Agreement.

The fair value of the embedded debt derivative related to the Company’s Loan Agreement with Pharmakon was $ 0.8 million as of September 30, 2023 and December 31, 2022.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inventories consists of the following (in thousands):

September 30, 2023 December 31, 2022

Work-in-process $ 2,640 $ 7,892

Finished goods 15,802 13,676

Inventories, current $ 18,442 $ 21,568

Raw materials included in other long-term assets 848 610

Total inventories $ 19,290 $ 22,178

For the period ended December 31, 2022, inventory consisted only of inventory related to our commercial product, Auryxia.

On April 24, 2023, or the EC Marketing Authorization Date , vadadustat received marketing authorization from the EC under the trade name Vafseo.

Costs associated with converting the vadadustat drug substance to finished goods after the EC Marketing Authorization Date, which will be used to supply Europe, have been capitalized as inventory on the condensed consolidated balance sheet of the Company as of September 30, 2023.

Inventory written down for Auryxia as a result of excess, obsolescence, scrap or other reasons charged to cost of goods in the unaudited condensed consolidated statement of operations and comprehensive loss totaled approximately $ 0.7 million and $ 2.6 million during the three months ended September 30, 2023 and 2022, respectively, and $ 1.3 million and $ 10.0 million during the nine months ended September 30, 2023 and 2022, respectively.

The Company records advance payments for vadadustat drug substance that it expects to use for the potential US launch as prepaid manufacturing costs.

Upon the quality release of the vadadustat batches and transfer of title to the Company, the Company records the cost as research and development expense.

As of September 30, 2023 and December 31, 2022, the Company had $15.6 million of prepaid manufacturing costs for vadadustat drug substance expected to be used in the potential U.S.

launch of vadadustat included in other current assets on the condensed consolidated balance sheet.

INTANGIBLE ASSET AND GOODWILL

Intangible Asset

Intangible asset, net of accumulated amortization, prior impairments and adjustments as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

September 30, 2023 December 31, 2022

Intangible asset:

Gross Carrying

Value Accumulated Amortization Net Book Value Net Book Value Estimated Useful Life

Developed product rights for Auryxia $ 214,705 $ ( 169,652 ) $ 45,053 $ 72,084 6 years

The Company recorded $ 9.0 million in amortization expense for each of the three month periods ended September 30, 2023 and 2022, and $ 27.0 million for each of the nine month periods ended September 30, 2023 and 2022.

The Company assesses goodwill for impairment annually, or under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be an impairment.

As of September 30, 2023 and December 31, 2022, the Company had goodwill of $ 59.0 million and no accumulated impairment losses related to goodwill recorded in connection with the December 2018 merger with Keryx.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consists of the following (in thousands):

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September 30, 2023 December 31, 2022

Product revenue allowances $ 23,834 $ 26,268

Product return reserves, current portion 3,312 7,789

Compensation and related benefits 7,204 11,481

Operating lease liabilities, current portion 4,861 4,744

Royalties 3,076 3,804

Professional fees 4,648 1,886

Accrued manufacturing costs 4,156 4,310

BioVectra termination fees 5,000 —

Clinical trial costs 312 5,755

Restructuring costs 617 2,751

Other 5,644 6,989

Total accrued expenses and other current liabilities $ 62,664 $ 75,777

Accrued manufacturing costs includes the costs associated with the Company's commercial product Auryxia and vadadustat, a product for which the Company is seeking approval from the FDA to market in the U.S.

and for which the Company recently signed a license agreement with Medice to market in Europe and other territories (see Note 4 for further details).

Pharmakon Term Loans

On November 11, 2019, the Company, with Keryx as guarantor, entered into a loan agreement, or Loan Agreement , with BioPharma Credit PLC as collateral agent and a lender, or Collateral Agent, and BioPharma Credit Investments V (Master) LP as a lender, and a Guaranty and Security Agreement with the Collateral Agent.

BioPharma Credit PLC subsequently transferred its interest in the loans, solely in its capacity as a lender, to its affiliate, BPCR Limited Partnership.

The Collateral Agent and the lenders are collectively referred to as Pharmakon .

The Loan Agreement, as amended, consists of a secured term loan facility in an aggregate amount of up to $ 100.0 million, or Term Loans , which was made available under two tranches:

(i) the first tranche of $ 80.0 million, or Tranche A , and (ii) the second tranche of $ 20.0 million, or Tranche B .

On November 25, 2019, the Company drew $ 77.3 million on Tranche A, net of fees and expenses of $ 2.7 million.

On December 10, 2020, the Company drew $ 20.0 million on Tranche B, net of immaterial lender expenses and issuance costs.

On July 15, 2022, or Second Amendment Effective Date , the Company prepaid $ 25.0 million of the then outstanding principal, $5.0 million on Tranche A and a $ 20.0 million on Tranche B as well as a $ 0.5 million prepayment fees under the terms of the Loan Agreement.

During the three months ended September 30, 2022, the Company recorded a debt extinguishment loss of $ 0.9 million.

As of September 30, 2023, the Company had $ 43.0 million of principal outstanding.

The Term Loans, as amended, bear interest through maturity at a variable rate based on the three month Secured Overnight Financing Rate, or SOFR, plus a SOFR adjustment of 0.30% plus 7.50 %.

The SOFR interest rate was capped at 3.35% through October 31, 2023, the date of the Fourth Amendment to the Loan Agreement, or Fourth Amendment .

As of September 30, 2023, the three-month SOFR rate was above the SOFR cap, therefore, the Company's interest rate was 11.15 %.

The Company recognized interest expense related to the Loan Agreement of $ 1.4 million and $ 2.1 million during the three months ended September 30, 2023 and 2022, respectively, and $ 4.7 million and $ 7.5 million during the nine months ended September 30, 2023 and 2022, respectively.

Unamortized discount and issuance costs were $ 0.4 million as of September 30, 2023.

The Company was required to make equal quarterly principal payments that started on the 33 rd-month anniversary of the applicable Funding Date until November 25, 2024, or Original Maturity Date.

The Fourth Amendment, which the Company entered into on October 31, 2023, extended the maturity date to March 31, 2025, or New Maturity Date , and revised the principal payments to monthly principal payments starting in October 2024 on the remaining principal balance of $ 35.0 million.

During the three months ended September 30, 2023, the Company made no quarterly principal payments under the Term Loans.

During the nine months ended September 30, 2023, the Company made quarterly principal payments under the Term Loans totaling $ 24.0 million.

Under certain circumstances, unless certain liquidity conditions are met, the Maturity Date may decrease by up to one year , and the Amortization Schedule may correspondingly commence up to one year earlier.

CAPITAL STOCK

Authorized and Outstanding Capital Stock

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

If the Company prepays the loan prior to the New Maturity Date, it will be required to make a prepayment fee of 0.50 % of such prepayment amount.

A change of control, which includes a new entity or group owning a majority (greater than 50%) of the Company's voting stock, triggers a mandatory prepayment of the Term Loans.

The obligations of the Company and Keryx under the Loan Agreement are secured by a first priority lien on certain assets of the Company and Keryx, including Auryxia and certain related assets, cash and certain equity interests held by the Company and Keryx.

The Loan Agreement contains various affirmative and negative covenants, including that limit the Company's ability to engage in specified types of transactions and require the Company to maintain one or more controlled cash accounts.

In addition, the Loan Agreement, as amended, requires the Company to (i) report quarterly minimum net Auryxia sales for the trailing twelve-month period of $ 85.0 million, (ii) in certain instances maintain an annual minimum liquidity threshold and (iii) not be subject to any qualification as to going concern in its Annual Reports on Form 10-K.

If an event of default occurs, including a qualification as a going concern, and is continuing under the Loan Agreement, the Collateral Agent is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement.

Under certain circumstances, a default interest rate will apply on all outstanding obligations during the occurrence and continuance of an event of default.

As of September 30, 2023 and December 31, 2022, the Company was in compliance with the covenants under the Pharmakon Loan Agreement.

The Company concluded the contingent put and call features that could require mandatory repayment upon the occurrence of an event of default, default interest rates to be payable and certain other events represent an embedded derivative required to be bifurcated from the debt host instrument and accounted for separately and re-measured at fair value on a quarterly basis.

The fair value of the embedded debt derivative related to the Company’s Loan Agreement with Pharmakon was $ 0.8 million on September 30, 2023 and December 31, 2022.

During the nine months ended September 30, 2023, there was no change in fair value of the embedded debt derivative.

During the nine months ended September 30, 2022, we recognized a $ 1.1 million gain in other (expense) income in the consolidated statements of operations and comprehensive loss related to the decrease in the fair value of the embedded debt derivative.

See Note 12 of the Notes to the Consolidated Financial Statements in the 2022 Annual Report on Form 10-K/A for further details.

CAPITAL STOCK, STOCK-BASED COMPENSATION AND BENEFIT PLAN

Authorized and Outstanding Capital Stock

On June 5, 2020, the Company filed a Certificate of Amendment to its Ninth Amended and Restated Certificate of Incorporation, or its Charter , to increase the number of authorized shares of common stock from 175,000,000 to 350,000,000 .

As of September 30, 2023, the authorized capital stock of the Company included 350,000,000 shares of common stock, $ 0.00001 par value per share, of which 188,313,807 and 184,135,714 shares were issued and outstanding as of September 30, 2023 and December 31, 2022, respectively;

and 25,000,000 shares of undesignated preferred stock, $ 0.00001 par value per share, of which no shares were issued and outstanding as of September 30, 2023 and December 31, 2022.

As of March 31, 2024, the authorized capital stock of the Company included 350,000,000 shares of common stock, $ 0.00001 par value per share, of which 209,454,149 and 194,582,539 shares were issued and outstanding as of March 31, 2024 and December 31, 2023, respectively;

and 25,000,000 shares of undesignated preferred stock, $ 0.00001 par value per share, of which no shares were issued and outstanding as of March 31, 2024 and December 31, 2023.

At-the-Market Facility

On April 7, 2022, the Company entered into an Open Market Sale Agreement, or Sales Agreement , with Jefferies LLC, or Jefferies, as agent, for the offer and sale of common stock at current market prices in amounts to be determined from time to time.

Also, on April 7, 2022, the Company filed a prospectus supplement relating to the Sales Agreement, pursuant to which it is able to offer and sell under the Sales Agreement up to $ 26.0 million of its common stock at current market prices from time to time.

From the date of filing of the prospectus supplement through the date of the filing of this Quarterly Report on Form 10-Q, the Company has not sold any shares of its common stock under this program.

Terminated At-the-Market Facility

On March 12, 2020, the Company filed a prospectus supplement relating to the Company's sales agreement with Cantor Fitzgerald & Co., or Prior Sales Agreement , pursuant to which it was able to offer and sell up to $ 65.0 million of its common stock at current market prices from time to time.

On February 25, 2021, the Company filed a prospectus relating to the Prior Sales Agreement with its new shelf registration statement (which replaced the prior shelf registration statement and the sales agreement prospectus supplement), pursuant to which it was able to offer and sell up to $ 100.0 million of its common stock at current market prices from time to time.

On March 1, 2022, the Company filed a prospectus relating to the Prior Sales Agreement, pursuant to which it was authorized to offer and sell up to $ 25.3 million of its common stock at current market prices from time to time.

On March 16, 2022, the Company terminated the Prior Sales Agreement.

During the three months ended March 31, 2022, the Company sold 404,600

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shares of common stock under this program with net proceeds (after deducting commissions and other offering expenses) of $ 0.8 million.

On April 7, 2022, the Company entered into an at-the-market, or ATM , sales agreement with Jefferies LLC, or Jefferies, as the Company's sales agent, under which the Company could offer and sell from time to time up to $ 26.0 million of shares of its common stock at current market prices.

During the year ended December 31, 2023, the Company sold 6,189,974 shares of common stock under this program with gross proceeds of $ 6.8 million ($ 6.7 million, net of offering expenses).

During the three months ended March 31, 2024, the Company sold 13,261,311 shares of its common stock under this program with gross proceeds of $ 19.2 million ($ 18.7 million, net of offering expenses).

STOCK-BASED COMPENSATION AND BENEFIT PLAN

Stock-Based Compensation and Benefit Plans

The Company incurred stock-based compensation expenses of $ 1.8 million and $ 7.8 million for the three and nine months ended September 30, 2023, respectively, and $ 3.4 million and $ 14.8 million for the three and nine months ended September 30, 2022, respectively.

The Company incurred stock-based compensation expenses of $ 2.4 million and $ 2.5 million for the three months ended March 31, 2024 and 2023, respectively.

Equity Incentive Plans

The following table contains information about our equity plans:

September 30, 2023

Title of Plan Group Eligible Type of Award Granted (or to be Granted) Awards Outstanding Additional Awards Authorized for Grant

The following table contains information about the Company's equity plans:

March 31, 2024 December 31, 2023

Title of Plan Group Eligible Type of Award Granted (or to be Granted) Awards Outstanding Additional Awards Authorized for Grant Awards Outstanding Additional Awards Authorized for Grant

Keryx Equity Plans (1)(2)

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Akebia Therapeutics, Inc.

Amended and Restated 2008 Equity Incentive Plan ( the 2008 Plan ) (2)

Employees, directors and consultants Stock options and RSUs 419 —

Akebia Therapeutics, Inc.

2014 Incentive Plan, as amended (2) (3)

( the 2014 Plan )

(replaces 2008 Plan)

Employees, directors, consultants and advisors Stock options, RSUs, SARs and performance awards 13,531,330 — 15,311,501 —

1 unchanged sentence

2023 Stock Incentive Plan (3) ( the 2023 Plan )

(replaces 2014 Plan)

(replaced 2014 Plan)

Employees, officers, directors, consultants and advisors Stock options, SARs, restricted stock, unrestricted stock, RSUs, performance awards, other share-based awards and dividend equivalents 9,198,750 10,945,556 1,712,400 17,382,722

4 unchanged sentences

2018 Equity Incentive Plan.

(2) Shares are no longer being issued under these plans.

(3) Includes inducement awards that are subject to the terms and conditions of the applicable plan but were granted as inducement awards consistent with Nasdaq Listing Rule 5635(c)(4):

2,035,832 options outstanding under the 2014 Plan and 653,000 options outstanding under the 2023 Plan.

Common Stock Options and SARs

During the nine months ended September 30, 2023, the Company issued 2,489,500 options to employees under the 2014 Plan and 315,000 options to directors under the 2023 Plan.

During the nine months ended September 30, 2023, the Company issued 635,313 SARs to one executive under the 2014 Plan.

In addition, the Company issues stock options to directors, new hires and occasionally to other employees not in connection with the annual grant process.

(2) New awards are no longer being granted under these plans.

(3) This table includes inducement awards that are subject to the terms and conditions of the applicable plan but were granted as inducement awards consistent with Nasdaq Listing Rule 5635(c)(4) and not under the applicable plan:

1,525,375 options outstanding under the 2014 Plan and 1,764,950 options outstanding under the 2023 Plan as of March 31, 2024 and 1,616,019 options outstanding under the 2014 Plan and 794,000 options outstanding under the 2023 Plan as of December 31, 2023.

Common Stock Options and Stock Appreciation Rights

During the three months ended March 31, 2024, the Company issued 3,117,500 options to employees under the 2023 Plan.

Options and SARs granted by the Company generally vest over periods of between 12 and 48 months, subject, in each case, to the individual’s continued service through the applicable vesting date.

Options and SARs generally vest either 100 % on the first anniversary of the grant date or in installments of (i) 25 % at the one year anniversary and (ii) 12 equal quarterly installments beginning after the one year anniversary of the grant date, subject to the individual’s continuous service with the Company.

Options and SARs generally expire 10 years after the date of grant.

The Company also maintains an inducement award program with a share pool that is separate from the Company's equity plans under which inducement awards may be granted consistent with Nasdaq Listing Rule 5635(c)(4).

During the nine months ended September 30, 2023, the Company granted 704,000 options to purchase shares of the Company’s common stock to new hires as inducements to such employees' entering into employment with the Company, of which 701,000 options remained outstanding as of September 30, 2023.

The Company grants annual service-based stock options to employees and directors and SARs to certain executives under the 2023 and 2014 Plans.

In addition, the Company issues stock options to directors, new hires and occasionally to other employees not in connection with the annual grant process.

During the nine months ended September 30, 2023, the

Options and SARs generally expire ten years after the date of grant.

Akebia Therapeutics, Inc.

2 unchanged sentences

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company granted options not in connection with the annual grant process with an aggregate grant date fair values of $ 1.2 million calculated using the Black-Scholes option-pricing model.

The fair value of stock options that vested during the nine months ended September 30, 2023 was $ 5.3 million.

The combined stock option activity for the nine months ended September 30, 2023, is as follows:

Options Weighted Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands)

During the three months ended March 31, 2024, the Company granted 970,950 options to purchase shares of the Company’s common stock to new hires as inducements to such employees entering into employment with the Company, of which 970,950 options remained outstanding as of March 31, 2024.

The Company grants annual service-based stock options to employees and directors and SARs to certain executives under the 2023 and 2014 Plans.

In addition, the Company issues stock options to directors, new hires and occasionally to other employees not in connection with the annual grant process.

Finally, the Company grants performance-based stock options which generally vest in connection with the achievement of specified commercial, regulatory and corporate milestones.

The performance-based stock options also generally feature a time-based vesting component.

The expense recognized for these awards is based on the grant date fair value of the Company’s common stock multiplied by the number of options granted and recognized over time based on the probability of meeting such commercial, regulatory and corporate milestones.

The combined stock option activity for the three months ended March 31, 2024, is as follows:

Options Weighted Average Exercise Price Weighted-Average Contractual Life (years) Aggregate Intrinsic Value (in thousands)

Outstanding at December 31, 2023 13,312,835 $ 4.20 7.27 years —

Granted 4,088,450 $ 1.68 — —

( 5,989 ) $ 7.43

Exercised ( 280,260 ) $ 0.50 — —

Expired ( 25,074 ) $ 13.67

Canceled and forfeited ( 218,175 ) $ 6.28 — —

Outstanding at September 30, 2023 14,614,113 $ 4.40 7.17 years $ 2,345

Exercisable at September 30, 2023 8,215,979 $ 6.52 5.80 years

Performance Awards

The performance-based stock options granted by the Company generally vest in connection with the achievement of specified commercial, regulatory and corporate milestones.

The performance-based stock options also generally feature a time-based vesting component.

The Company also grants performance-based restricted stock units, or PSUs , to employees under the 2023 Plan and the 2014 Plan.

The PSUs granted by the Company generally vest in connection with the achievement of specified commercial, regulatory and corporate milestones.

The PSUs also generally feature a time-based vesting component.

The expense recognized for these awards is based on the grant date fair value of the Company’s common stock multiplied by the number of units granted and recognized over time based on the probability of meeting such commercial, regulatory and corporate milestones.

The Company did not issue any performance-based stock options under the 2023 Plan or the 2014 Plan during the nine months ended September 30, 2023.

Outstanding at March 31, 2024 16,877,776 $ 3.61 7.69 years $ 5,655

Exercisable at March 31, 2024 7,898,693 $ 5.94 6.05 years

As of March 31, 2024, there was approximately $ 10.0 million of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of 3.05 years.

Restricted Stock Units

Generally, restricted stock units, or RSUs , granted by the Company vest in one of the following ways:

(i) 100 % of each RSU grant vests on the first anniversary of the grant date, (ii) one third of each RSU grant vests on the first, second and third anniversaries of the grant date, (iii) 50 % of each RSU grant vests on the first anniversary and 25 % of each RSU grant vests every six months after the one year anniversary of the grant date, or (iv) one third of each RSU grant vests on the first anniversary and the remaining two thirds vests in eight substantially equal quarterly installments beginning after the one year anniversary, subject, in each case, to the individual’s continued service through the applicable vesting date.

(i) 100 % of each RSU grant vests on the first anniversary of the grant date, (ii) one third of each RSU grant vests on the first, second and third anniversaries of the grant date, or (iii) one third of each RSU grant vests on the first anniversary of the grant date and the remaining two thirds vests in eight substantially equal quarterly installments beginning after the one year anniversary, subject, in each case, to the individual’s continued service through the applicable vesting date.

The grant-date fair value of the RSUs is recognized as expense on a straight-line basis.

The Company determines the fair value of the RSUs based on the closing price of the common stock on the date of the grants.

RSU activity is as follows:

The Company also periodically grants performance-based restricted stock units, or PSUs , to employees under the 2023 Plan and previously granted PSUs under the 2014 Plan.

The PSUs granted by the Company generally vest in connection with the achievement of specified commercial, regulatory and corporate milestones.

The PSUs also generally feature a time-based vesting component.

RSU and PSU activity is as follows:

Akebia Therapeutics, Inc.

| Form 10-Q | Page 23

Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2014 Plan 2023 Plan

2 unchanged sentences

Granted — $ — 3,407,200 $ 1.68

( 3,971,168 ) $ 1.02 — —

Vested ( 1,237,718 ) $ 1.69 — $ —

Forfeited and canceled ( 36,218 ) $ 1.16 ( 9,300 ) $ 1.68

Outstanding as of September 30, 2023 3,672,096 $ 1.31 590,500 $ 1.50

Akebia Therapeutics, Inc.

| Form 10-Q | Page 17

Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2023, there was $ 4.0 million of unrecognized compensation costs related to time-based RSUs which is expected to be recognized over a weighted-average period of 1.75 years.

Outstanding as of March 31, 2024 2,065,933 $ 1.08 4,001,300 $ 1.65

As of March 31, 2024, there was $ 7.7 million of unrecognized compensation costs related to time-based RSUs and PSUs, which is expected to be recognized over a weighted-average period of 2.43 years.

Employee Stock Purchase Plan

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In addition, an employee may not purchase more than 1,500 shares in any offering period.

As of September 30, 2023, a total of 4,637,801 shares of the Company’s common stock are available for future issuance under the ESPP.

The Company issued 200,194 shares under the ESPP during the nine months ended September 30, 2023.

As of March 31, 2024 and December 31, 2023, a total of 4,545,480 and 4,637,801 shares of the Company’s common stock were available for future issuance under the ESPP, respectively.

The Company issued 92,321 shares under the ESPP during the three months ended March 31, 2024.

Stock-Based Compensation Expense

1 unchanged sentence

The weighted-average assumptions used in calculating the fair values of the rights to acquire stock under the 2023 Plan, the 2014 Plan and inducement awards were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

Stock Options 2024 2023

1 unchanged sentence

Expected volatility 111.33 % - 114.25 % 100.97 % - 102.16 %

Expected term (years) 6.25 years - 6.25 years 6.25 years - 6.25 years 5.51 years - 6.25 years 5.51 years - 6.25 years

Expected term (years) 6.25 years - 6.25 years 6.25 years - 6.25 years

Expected dividend yield — % — %

Fair value at grant date $ 1.38 $ 0.26 $ 0.69 $ 1.19

The Company has classified stock-based compensation in its condensed consolidated statement of operations and comprehensive loss as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

Weighted average grant date fair value

$ 1.46 $ 0.52

The Company has classified stock-based compensation in its unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands):

Three Months Ended March 31,

Cost of goods sold $ 87 $ 66

$ 74 $ 227 $ 214 $ 386

Research and development 419 669

2 unchanged sentences

Total stock-based compensation $ 2,360 $ 2,489

COMMITMENTS AND CONTINGENCIES

Cambridge Leases

The Company leases approximately 65,167 square feet of office and lab space in Cambridge, Massachusetts under a lease which was most recently amended in November 2020, or, collectively, the Cambridge Lease .

Under the Third Amendment to the Cambridge Lease, or Third Amendment , executed in July 2016, total monthly lease payments under the initial base rent were approximately $ 0.2 million and are subject to annual rent escalations.

In addition to such annual rent escalations, base rent payments for a portion of said premises commenced on January 1, 2017 in the monthly amount of approximately $ 22,000 .

The Fourth Amendment to the Cambridge Lease, executed in May 2017, provided additional storage space to the Company and did not impact rent payments.

In April 2018, the Company entered into a Fifth Amendment to the Cambridge Lease (Fifth Amendment) for an additional 19,805 square feet of office space on the 12th floor.

Monthly lease payments for the existing 45,362 square feet of office and lab space, under the Third Amendment, remain unchanged.

The new space leased by the Company was delivered in September 2018 and additional monthly lease payments of approximately $ 0.1 million commenced in February 2019 and are subject to annual rent escalations, which commenced in September 2019.

In November 2020, the Company entered into a Sixth Amendment to the Cambridge Lease (Sixth Amendment) to extend the term of the Cambridge Lease with respect to the lab space from November 30, 2021 to January 31, 2025.

The Sixth Amendment includes two months of free rent starting in December 2020 and additional monthly lease payments of approximately $ 48,000 , which commenced in December 2021, and is subject to annual rent escalations, which commenced in December 2022.

Akebia Therapeutics, Inc.

| Form 10-Q | Page 18

Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The term of the Cambridge Lease with respect to the office space expires on September 11, 2026, with one five-year extension option available.

The renewal option in this real estate lease was not included in the calculation of the right-of-use asset and operating lease liability as the renewal is not reasonably certain.

The term of the Cambridge Lease with respect to the lab space expires on January 31, 2025, with an extension option for one additional period through September 11, 2026.

The renewal option in this real estate lease was included in the calculation of the right-of-use assets and operating lease liabilities as the renewal is reasonably certain.

The lease agreements do not contain residual value guarantees.

Operating lease costs were $ 1.2 million and $ 1.8 million for the three months ended September 30, 2023 and 2022, respectively, and $ 4.4 million and $ 5.4 million for the nine months ended September 30, 2023 and 2022, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 1.4 million and $ 1.8 million for the three months ended September 30, 2023 and 2022, respectively, and $ 4.5 million and $ 5.5 million for the nine months ended September 30, 2023 and 2022, respectively.

The security deposit in connection with the Cambridge Lease is $ 1.6 million in the form of a letter of credit, which is included as restricted cash in prepaid expenses and other current assets in the Company’s unaudited condensed consolidated balance sheets as of September 30, 2023.

The Company has not entered into any material short-term leases or financing leases as of September 30, 2023.

Former Boston Lease

Previously, the Company leased 27,924 square feet of office space in Boston, Massachusetts, or Boston Lease .

In February 2022, the Company entered into the First Amendment to the Boston Lease, or First Lease Amendment, to extend the term of the Boston Lease from February 2023 to July 2031.

The First Lease Amendment included five months of free rent starting in March 2023 and monthly lease payments of $ 0.2 million commencing on August 1, 2023, with an annual rent escalation of approximately 2 % commencing on August 1, 2024.

In May 2023, the Company entered into an Assignment and Assumption of Lease Agreement, or Lease Assignment Agreement, with LG Chem Life Sciences Innovation Center, Inc., or LG Chem , pursuant to which the Company assigned all of its rights, title, and interest in, to, and under the Boston Lease to LG Chem, or the Assignment .

As part of the Lease Assignment Agreement, the Company made a payment to LG Chem of $ 1.3 million, or Lease Assignment Amount, and LG Chem assumed all of the rights and obligations of the Company under the Boston Lease.

Subsequent to the Assignment, the Company has no further obligations for rent or other payments under the Boston Lease.

In accordance with ASC 842, Leases, the Company wrote off the right-of-use asset and lease liability associated with the Boston Lease, and recognized the difference between the right-of-use asset and the lease liability offset by the Assignment Amount as a loss on lease termination in the condensed consolidated statement of operations and comprehensive loss of $ 0.5 million during the three and six months ended June 30, 2023.

Under the terms of the Lease Assignment Agreement the Company was entitled to, and received back, its security deposit of $ 1.0 million as of June 30, 2023, which had been recorded as restricted cash in prepaid expenses and other current assets in the Company's condensed consolidated balance sheet as of December 31, 2022.

In September 2019, the Company entered into an agreement to sublease the Boston office space to Foundation Medicine, Inc., or Foundation .

The sublease was subject and subordinate to the Boston Lease between the Company and the landlord.

The term of the sublease commenced on October 16, 2019, upon receipt of the required consent from the landlord for the sublease agreement, and expired on February 27, 2023.

Foundation was obligated to pay the Company rent that approximated the rent due from the Company to its landlord with respect to the Boston Lease.

Sublease rental income is recorded to other income in the condensed consolidated statement of operations and other comprehensive loss.

The Company was obligated for all payment terms pursuant to the Boston Lease, and the Company guaranteed the obligations under the sublease.

The Company did not record any sublease rental income for the three months ended September 30, 2023 and recorded $ 0.3 million in sublease rental income from Foundation during the nine months ended September 30, 2023.

The Company recorded sublease rental income of $ 0.5 million and $ 1.4 million during the three and nine months ended September 30, 2022, respectively.

Future Lease Commitments

Future commitments under non-cancelable lease agreements are as follows:

Akebia Therapeutics, Inc.

| Form 10-Q | Page 19

Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Years ending December 31, Operating

Lease Commitments

Remainder of 2023 $ 1,421

Total lease commitments $ 16,594

present value adjustment ( 1,501 )

Current and long-term operating lease liabilities $ 15,093

As of September 30, 2023, the remaining lease term for the Cambridge Lease was 2.95 years.

Manufacturing and Unconditional Purchase Commitment Agreements

The Company's contractual obligations include a commercial supply agreement with Siegfried Evionnaz SA, or Siegfried, to supply commercial drug substance for Auryxia.

Pursuant to the Master Manufacturing Services and Supply Agreement between the Company and Siegfried, as amended (the most recent amendment having been executed on February 28, 2023), or Siegfried Agreement , the Company has agreed to purchase a minimum quantity of drug substance of Auryxia at a predetermined price.

The term of the Siegfried Agreement expires on December 31, 2024, unless otherwise agreed by the parties and subject to the Company's option to extend the term through December 31, 2026 by providing 12 months’ prior written notice to Siegfried.

The Siegfried Agreement provides the Company and Siegfried with certain early termination rights.

As of September 30, 2023, the Company is required to purchase a minimum quantity of drug substance for Auryxia annually at a total cost of approximately $ 18.1 million through the end of 2024.

On April 9, 2019, the Company and Esteve entered into the Esteve Agreement, which included the terms and conditions under which Esteve would manufacture vadadustat drug substance for commercial use.

Pursuant to the Esteve Agreement, the Company provided rolling forecasts to Esteve on a quarterly basis, or the Esteve Forecast .

The Esteve Forecast reflected the Company’s needs for vadadustat drug substance produced by Esteve over a certain number of months, represented as a quantity of vadadustat drug substance per calendar quarter.

The parties agreed to a volume-based pricing structure under the Esteve Agreement.

On December 16, 2022, the Company, MTPC, and Esteve executed the Esteve Assignment Agreement, pursuant to which the Supply Agreement between the Company and Esteve was assigned to MTPC.

The Esteve Assignment Agreement transferred the rights and obligations of the Supply Agreement to MTPC, specifically including the obligations under certain purchase orders issued by the Company and accepted by Esteve.

As such, the Company will have no further obligation to take delivery of or pay for product delivered by Esteve under the transferred Esteve Agreement.

On March 11, 2020, the Company entered into a Supply Agreement with Patheon Inc., or Patheon, or the Patheon Agreement , under which Patheon will manufacture vadadustat drug product for commercial use under a volume-based pricing structure through June 30, 2025, renewing annually unless either party gives the other party eighteen months ' prior written notice.

Pursuant to the Patheon Agreement, the Company has agreed to purchase from Patheon a certain percentage of the estimated global demand for vadadustat drug product based on certain quarterly and annual forecasts provided by the Company.

As of September 30, 2023, the Company had no minimum commitments with Patheon, however, as estimated global demand fluctuates, the Company may have future obligations under the Patheon Agreement.

On April 2, 2020, the Company entered into a Supply Agreement with STA Pharmaceutical Hong Kong Limited, a subsidiary of WuXi AppTec, or WuXi STA , as amended on April 15, 2021, or WuXi STA DS Agreement .

The WuXi STA DS Agreement includes the terms and conditions under which WuXi STA will manufacture vadadustat drug substance for commercial use.

Pursuant to the WuXi STA DS Agreement, the Company provides rolling forecasts to WuXi STA on a quarterly basis, or the WuXi STA DS Forecast .

The WuXi STA DS Forecast reflects the Company’s needs for vadadustat drug substance produced by WuXi STA over a certain number of quarters.

The parties have agreed to a volume-based pricing structure under the WuXi STA DS Agreement.

The WuXi STA DS Agreement has an initial term of four years , beginning April 2, 2020 and ending April 2, 2024.

Pursuant to the WuXi STA DS Agreement, the Company has agreed to purchase a certain percentage of the global demand for vadadustat drug substance from WuXi STA.

As of September 30, 2023, the Company has committed to purchase $ 14.9 million of vadadustat drug substance from WuXi STA through the second quarter of 2024.

Akebia Therapeutics, Inc.

| Form 10-Q | Page 20

Akebia Therapeutics, Inc.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On February 10, 2021, the Company entered into a Supply Agreement with WuXi STA, or the WuXi STA DP Agreement .

The WuXi STA DP Agreement includes the terms and conditions under which WuXi STA will manufacture and supply vadadustat drug product for commercial purposes.

Pursuant to the WuXi STA DP Agreement, the Company will provide rolling forecasts to WuXi STA on a quarterly basis, or the WuXi STA DP Forecast.

Each WuXi STA DP Forecast will reflect the quantities of vadadustat drug product that the Company expects to order from WuXi STA over a certain number of months, represented as a quantity of vadadustat drug product per calendar quarter.

Pursuant to the WuXi STA DP Agreement, the Company has agreed to purchase a certain percentage of global demand for vadadustat drug product from WuXi STA.

The parties have agreed to a volume-based pricing structure under the WuXi STA DP Agreement.

The vadadustat drug product price will remain fixed for the first 12 months and thereafter shall be annually reviewed by the Company and WuXi STA.

The Company will also reimburse WuXi STA for certain reasonable expenses.

The WuXi STA DP Agreement has an initial term of four years , beginning February 10, 2021 and ending February 10, 2025.

The WuXi STA DP Agreement may be renewed or extended by mutual agreement of the Company and WuXi STA with at least 18 months’ prior written notice.

The WuXi STA DP Agreement allows the Company to terminate the relationship on 180 calendar days’ prior written notice to WuXi STA for any reason.

In addition, each party has the ability to terminate the WuXi STA DP Agreement upon the occurrence of certain conditions.

Former Manufacturing and Unconditional Purchase Commitments

Pursuant to the Manufacture and Supply Agreement with BioVectra and the Amended and Restated Product Manufacture and Supply and Facility Construction Agreement with BioVectra, the Company agreed to purchase minimum quantities of Auryxia drug substance annually at predetermined prices as well as reimburse BioVectra for certain costs in connection with construction of a new facility for the manufacture and supply of Auryxia drug substance.

Furthermore, as it relates to all open purchase orders, BioVectra is relieved from any obligations to manufacture any product or perform services under any such open purchase orders, and the Company is relieved from any obligations to purchase any product under such open purchase orders.

The Company is also relieved from any obligations to pay any outstanding invoices related to performance by BioVectra of services and all other obligations under the agreements.

In addition, the Company agreed to pay BioVectra a total of $ 32.5 million consisting of (i) an upfront payment of $ 17.5 million and (ii) six quarterly payments of $ 2.5 million commencing in April 2024, totaling $ 15.0 million.

The upfront payment of $ 17.5 million was made during the quarter ended December 31, 2022 and was recognized to cost of goods sold.

In accordance with ASC 420, Exit or Disposal Cost Obligations, the Company recognized a liability and corresponding expense for the remaining termination fees based on estimated fair value as of December 22, 2022, or BioVectra Effective Date .

The Company recorded an initial discount on the remaining termination fees on the consolidated balance sheet as of the BioVectra Effective Date.

This resulted in the recording of a liability and corresponding charge to cost of goods sold of $ 11.2 million during the quarter ended December 31, 2022.

The discount on the liability balance is being amortized to interest expense using the effective interest rate method over the term of the liability.

The amortization of the discount was $ 0.5 million and $ 1.4 million for the three and nine months ended September 30, 2023, respectively.

Other Third-Party Contracts

The Company contracts with various organizations to conduct research and development activities with remaining contract costs to the Company of approximately $ 45.4 million at September 30, 2023.

The scope of the services under these research and development contracts can be modified and the contracts cancelled by the Company upon written notice.

In some instances, the contracts may be cancelled by the third party upon written notice.

Litigation and Related Matters

The Company is involved from time to time in various legal proceedings arising in the normal course of business.

The Company provides disclosure when a loss in excess of any reserve is reasonably possible, and if estimable, the Company discloses the potential loss or range of possible loss.

Significant judgment is required to assess the likelihood of various potential outcomes and the quantification of loss in those scenarios.

Changes in the Company’s estimates could have a material impact and are recorded as litigation progresses and new information comes to light.

Although the outcomes of potential legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these occasional legal proceedings to have a material adverse effect on its financial position, results of operations or cash flows.

NET LOSS PER SHARE

Potentially dilutive securities, warrants, common stock options, RSUs and SARs have been excluded from the calculation of diluted net loss per share as their effects would be anti-dilutive.

For periods in which the Company reports a net loss, the weighted average number of shares outstanding used to calculate both basic and diluted net loss per share were the same.

The shares in the table below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, due to their anti-dilutive effect:

Akebia Therapeutics, Inc.

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Guarantees and Indemnifications

The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

The Company maintains director and officer liability insurance coverage that is intended to cover a portion of amounts that may be due with respect to indemnification after a deductible is met.

Further, the Company is a party to a variety of agreements in the ordinary course of business under which it may be obligated to indemnify third parties with respect to certain matters.

For the three and nine months ended September 30, 2023 and 2022, the Company did not experience any losses related to these indemnification obligations, and no claims were outstanding as of September 30, 2023.

NET LOSS PER SHARE

Potentially dilutive securities, common stock options, RSUs and SARs have been excluded from the calculation of diluted net loss per share as their effects would be anti-dilutive.

For periods in which the Company reports a net loss, the weighted average number of shares outstanding used to calculate both basic and diluted net loss per share were the same except for the three months ended September 30, 2022, as the Company had net income for that period.

The shares in the table below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, due to their anti-dilutive effect:

Three Months Ended September 30,

Outstanding common stock options and SARs 14,214,113 11,844,609

Three Months Ended March 31,

Warrants 4,230,769 —

Outstanding common stock options 16,242,463 13,877,754

Unvested RSUs 6,067,233 6,060,421

Stock appreciation rights 635,313 635,313

Total 27,175,778 20,573,488

SUBSEQUENT EVENTS

The Company has completed an evaluation of all subsequent events after the balance sheet date of September 30, 2023, through the filing date of this Quarterly Report on Form 10-Q with the SEC, to ensure that the condensed consolidated financial statements include appropriate disclose of events both recognized in the consolidated financial statements as of September 30, 2023, and events which occurred subsequently but were not recognized in the consolidated financial statements.

The Company has concluded that no subsequent events have occurred that require disclosure other than the amendment to the Company's Loan Agreement as disclosed in Note 10.

The Company has evaluated events and transactions occurring after the balance sheet date through the filing date of this Quarterly Report on Form 10-Q with the SEC, to ensure that the unaudited condensed consolidated financial statements include appropriate disclose of events both recognized in the accompanying unaudited condensed consolidated financial statements as of March 31, 2024, and events which occurred subsequently but were not recognized in the consolidated financial statements.

The Company has concluded that no subsequent events have occurred that require disclosure other than the following:

Amendment to WuXi STA DS Agreement

On April 15, 2024, the Company and WuXi STA entered into Amendment #2 to the WuXi STA DS Agreement pursuant to which the parties agreed to extend the term for an additional five years and set the expiration date to April 2, 2029.

In addition, the volume-based pricing structure under the WuXi STA DS Agreement was amended.

See Note 10, Commitments and Contingencies , for further information on the WuXi STA DS Agreement.

Drawdown of Tranche B Term Loan

On April 19, 2024, the Company drew $ 7.5 million on Tranche B, after deducting debt issuance costs, fees and expenses.

See Note 7, Indebtedness , for further information on the BlackRock Credit Agreement.

Amendment #1 to the Vifor Agreement

On May 3, 2024, the Company and CSL Vifor entered into the Amendment.

Pursuant to the Amendment, the Company and CSL Vifor agreed to modify the method of repayment of the Working Capital Fund such that the Working Capital Fund will be repaid through tiered royalties ranging from a high single-digit to low double-digit percentage of the Company’s sales of Vafseo to both CSL Vifor and to third parties outside of the Vifor Agreement, or the Vifor Royalty Payments .

The Vifor Royalty Payments will begin on July 1, 2025, and will continue until the cumulative total of the Vifor Royalty Payments reach $ 40.0 million, or through May 2028, or the Vifor Royalty Term , at which time, if the Vifor Royalty Payments have not yet reached $ 40.0 million, the Company is required to pay CSL Vifor the difference between the $ 40.0 million and the sum of any Vifor Royalty Payments paid by the Company during the Vifor Royalty Term and subject to certain minimum Vifor Royalty Payments during the Vifor Royalty Term.

In addition, upon termination of the Vifor Agreement prior to the end of the Vifor Royalty Term:

(i) if by the Company for convenience, then the Vifor Royalty Payments shall be accelerated and the Company shall be required to pay the difference between the $ 40.0 million and the sum of any Vifor Royalty Payments paid by the Company during the Vifor Royalty Term;

(ii) if by CSL Vifor for convenience, then all Vifor Royalty Payments shall cease and the Vifor Royalty Term shall end;

or (iii) for any reason other than convenience by the Company or CSL Vifor, the Vifor Royalty Term and Vifor Royalty Payments shall continue as agreed under the Amendment.

See Note 12, License, Collaboration and Other Revenue , for further information on the Vifor Agreement.

Cambridge Lease Extension - Lab Space

On May 6, 2024, the Company extended the term of the Cambridge Lease with respect to the lab space from January 31, 2025 to September 11, 2026.

The Company has an option to extend the term for an additional two year s with respect to the lab space.

See Note 9, Leases , for further information on the Cambridge Lease.

Akebia Therapeutics, Inc.

3 unchanged sentences

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What changed 10-Q

Item 1. Financial Statements