What changed in this filing

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Item 1A. Risk Factors

2024-11-07 compared with 2024-08-08 · 329 added, 298 removed, 1485 unchanged (30% of the section changed)

11 unchanged sentences

Prior to our 2018 merger, or the Merger , with Keryx Biopharmaceuticals, Inc., or Keryx , whereby Keryx became our wholly owned subsidiary, we had no products approved for commercial sale and had not generated any revenue from the sale of products.

We are not currently profitable, and we have incurred net losses each year since our inception, including a net loss of $8.6 million for the three months ended June 30, 2024.

As of June 30, 2024, we had an accumulated deficit of $1.6 billion.

We are not currently profitable, and we have incurred net losses each year since our inception, including a net loss of $20.0 million for the three months ended September 30, 2024.

As of September 30, 2024, we had an accumulated deficit of $1.7 billion.

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

In March 2022, we received a complete response letter, or CRL , from the United States, or U.S.

, Food and Drug Administration, or FDA , regarding our new drug application, or NDA , for vadadustat for the treatment of anemia associated

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with chronic kidney disease, or CKD .

, Food and Drug Administration, or FDA , regarding our new drug application, or NDA , for vadadustat for the treatment of anemia associated with chronic kidney disease, or CKD .

Following a Formal Dispute Resolution Request, or FDRR , to the FDA in 2022 for vadadustat, we filed a resubmission to our NDA in 2023.

11 unchanged sentences

• the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies, based, in part, on their perception of our clinical trial data and/or the actual or perceived safety, tolerability and efficacy profile;

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• establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate supplies of products that are compliant with good manufacturing practices, or GMPs , to support the clinical development and the market demand for Auryxia, Vafseo and any other product and product candidate, including those that may be in-licensed or acquired;

• the potential impact of the BIOSECURE Act on our ability to conduct our business as currently conducted;

• the potential impact of geopolitical pressures or the BIOSECURE Act on our ability to conduct our business as currently conducted;

• current and future restrictions or limitations on our approved or future indications and patient populations or other adverse regulatory actions or in the event that the FDA requires Risk Evaluation and Mitigation Strategies, or REMS , or risk management plans that use restrictive risk minimization strategies;

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

KG, or Medice , pursuant to which we granted Medice an exclusive license to market and sell Vafseo for the treatment of anemia in patients with CKD in the European Economic Area, or the EEA , the United Kingdom, Switzerland and Australia, or Medice Territor y.

Vafseo is currently marketed and sold by Medice in certain countries in the Medice Territory.

1 unchanged sentence

In July 2024, we entered into a Termination and Settlement Agreement with CSL Vifor, or the Vifor Termination Agreement .

Pursuant to the Vifor Termination Agreement, we agreed, among other things, to terminate, effective immediately, the Second Amended and Restated License Agreement that we entered into with CSL Vifor in February 2022, as amended in May 2024, or the Vifor License Agreement , pursuant to which we granted CSL Vifor an exclusive license to sell Vafseo to Fresenius Medical Care North America and its affiliates, including Fresenius Kidney Care Group LLC, to certain third-party dialysis organizations approved by us, to independent dialysis organizations that are members of certain group purchasing

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organizations, and to certain non-retail specialty pharmacies in the U.S., which represents a significant portion of the potential market for Vafseo.

As a result, we have regained our rights to sell Vafseo to Fresenius Kidney Care North America and its affiliates and certain other third-party dialysis organizations in the U.S.

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We expect to continue to incur substantial additional operating expenses, including additional R&D expenses related to our pipeline, additional R&D and selling, general and administrative expenses for ongoing development and commercialization of Auryxia and Vafseo, which could lead to operating losses for the foreseeable future.

We will continue to incur substantial expenditures relating to continued commercialization and post-marketing requirements for Auryxia, Vafseo and any other products, including those that may be in-licensed or acquired, as well as costs relating to the R&D of any other product candidate, including those that may be in-licensed or acquired.

We will continue to incur substantial expenditures relating to continued commercialization and post-marketing requirements for Auryxia, Vafseo and any other products, including those that may be in-licensed or acquired, as well as costs relating to the R&D of Vafseo and any other product candidate, including those that may be in-licensed or acquired.

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

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In addition to any further costs not currently contemplated in our operating plan, our ability to achieve profitability and our financial position will depend, in part, on the rate of our future expenditures, the timing of our product, collaboration, license and other revenue, the timing and amount of any repayment of the WCF Royalty Payments, our continued compliance with the terms of the Agreement for the Provision of a Loan Facility, as amended, or the BlackRock Credit Agreement , with Kreos Capital VII (UK) Limited , which are funds and accounts managed by BlackRock Inc., collectively, BlackRock , and our ability to obtain additional funding, should it be needed.

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• maintain, protect and expand our intellectual property portfolio;

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• make decisions with respect to our personnel, including the retention of key employees;

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

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

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

We have expended and may in the future expend significant resources on our legal proceedings, including any legal proceedings that may be brought by or against us in the future.

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

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

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

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

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

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in-licensed or acquired, we may never generate revenue and royalties that are significant enough for us to become and remain profitable, and we may need to obtain additional financing to continue to fund our operating plan.

We may require substantial additional financing to fund our business.

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

As of June 30, 2024, our cash and cash equivalents were $39.5 million.

As of September 30, 2024, our cash and cash equivalents were $34.0 million.

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

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• any difficulties or delays in conducting our clinical trials, or enrolling patients in our clinical trials, for Auryxia, Vafseo or any other product candidates;

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• the outcome of our efforts to obtain marketing approval for any product candidates, including those that may be in-licensed or acquired, including any additional clinical trials or post-approval commitments imposed by regulatory authorities;

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

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We may need to obtain substantial additional financing to fund our business.

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

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

Because of that failure to file, we are not currently eligible to file or use a Registration Statement on Form S-3.

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

We believe our existing cash resources and the cash we expect to generate from product, royalty, supply and license revenues are sufficient to fund our current operating plan for at least twenty-four months.

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For example, any sustained disruption in the capital markets from adverse macroeconomic conditions and an uncertain geopolitical environment, such as rising inflation, increasing interest rates, slower economic growth or recession, global supply chain disruptions, the Russia-Ukraine war, Israel-Hamas war and the war in the Middle East and tensions between China and Taiwan, could negatively impact our ability to raise capital, and we cannot predict the extent or duration of such macroeconomic disruptions.

If we are unable to raise additional capital in sufficient amounts when needed or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development and/or

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commercialization of Auryxia, Vafseo and any other products or product candidates, including those that may be in-licensed or acquired.

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

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

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As a result, an investor would likely find it more difficult to trade or obtain accurate price quotations for our shares.

Delisting would likely also reduce the visibility, liquidity, and value of our common stock, reduce institutional investor interest in our Company, and may increase the volatility of our common stock.

Delisting would likely

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also reduce the visibility, liquidity, and value of our common stock, reduce institutional investor interest in our Company, and may increase the volatility of our common stock.

Delisting could also cause a loss of confidence of potential industry partners, lenders, and employees, which could further harm our business and our future prospects.

1 unchanged sentence

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

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

On August 11, 2023, we received a notification letter from Nasdaq informing us that since we had not yet filed our Quarterly Report on Form 10-Q for the three months ended June 30, 2023, we were not in compliance with Nasdaq’s listing rule requiring timely filing of all required periodic financial reports with the U.S.

Securities and Exchange Commission, or the SEC .

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Our R&D programs may initially show promise, yet fail to yield product candidates for clinical development or commercialization for many reasons, including the following:

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• the research methodology used may not be successful in identifying potential indications and/or product candidates;

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If any of these events occur, we may be forced to abandon our R&D efforts for one or more of our programs, or we may not be able to identify, discover, develop or commercialize additional product candidates, including those that may be in-licensed or acquired, which may have a material adverse effect on our business.

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

Because we have limited financial and managerial resources, we have focused on products, research programs and product candidates for specific indications.

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

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Because our internal research capabilities are limited, we may be dependent upon other pharmaceutical and biotechnology companies, academic scientists and institutions, and other researchers to sell or license product candidates, products or technology to us.

As a result, our rights to these product candidates may be limited or we may be required to make future payments to such third parties if we are successful in developing such product candidates.

As a result, our rights to these product candidates may be limited or we may be required to make future

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payments to such third parties if we are successful in developing such product candidates.

The success of this strategy depends partly upon our ability to identify, select, and acquire promising product candidates and products.

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

As part of our business strategy, we may engage in additional strategic transactions to expand and diversify our portfolio, including through the merger, acquisition or in-license of assets, businesses, or rights to products, product candidates or technologies or through strategic alliances or collaborations, similar to the Merger and our existing and prior collaboration

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and license arrangements.

We may not identify suitable strategic transactions, or complete such transactions in a timely manner, on favorable terms, on a cost-effective basis, or at all.

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

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• inability to retain personnel, customers, distributors, vendors and other business partners integral to an in-licensed or acquired product, product candidate or technology;

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The Term Loan Facility had an initial maturity date of March 31, 2025, which was automatically extended to January 29, 2028, or the Maturity Date , since we received FDA approval for Vafseo prior to June 30, 2024.

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The BlackRock Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants, financial covenants, events of default and other provisions and conditions that are customarily required for similar financings.

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

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

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Risks Related to Commercialization

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

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

If we are not able to execute contracts with dialysis organizations and other customers for the sale of Auryxia and Vafseo on favorable terms, in a timely manner, or at all, our revenue and results of operations will be adversely affected.

If we are not able to execute and/or maintain contracts with dialysis organizations and other customers for the sale of Auryxia and Vafseo on favorable terms, in a timely manner, or at all, our revenue and results of operations will be adversely affected.

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

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If dialysis organizations do not add Vafseo to their medical protocols in a timely manner, or at all, our operations could be materially adversely affected.

If oral phosphate binders, including Auryxia, are included in the end-stage renal disease, or ESRD , Prospective Payment System, or PPS , bundle payment, beginning in January 2025 as we currently anticipate, it will take time for dialysis organizations to implement internal mechanisms to dispense phosphate binders which could divert their attention from focusing on other therapeutic areas such as anemia management, which in turn could negatively impact the market for phosphate binders, including Auryxia.

If oral-only phosphate binders, including Auryxia, are included in the end-stage renal disease, or ESRD , Prospective Payment System, or PPS , bundle payment, beginning in January 2025 as we currently anticipate, it will take time for dialysis organizations to implement internal mechanisms to dispense phosphate binders which could divert their attention from focusing on other therapeutic areas such as anemia management, which in turn could negatively impact the market for phosphate binders, including Auryxia.

In addition, dialysis organizations may choose lower cost binders over Auryxia, or binders that may have features or benefits more aligned with the dialysis organization’s operational activities, which could negatively impact Auryxia revenue.

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Following LoE, in March 2025, the number of generic versions of Auryxia that enter the market will affect our revenue from Auryxia.

We believe CMS’s decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with dialysis organizations, other customers and providers to continue the use of Auryxia beyond LoE.

However, our ability to continue to generate revenue from sales of Auryxia following LoE will depend on many factors, including our ability to successfully contract with dialysis organizations, the timing and number of generics that enter the market and other products on the market that we compete with.

If we are unable to maintain sales of Auryxia following LoE, our results of operations and financial condition will be materially harmed.

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

We believe the Centers for Medicare & Medicaid Services', or CMS, decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with dialysis organizations, other customers and providers to seek to continue the use of Auryxia beyond LoE.

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are unable to maintain sales of Auryxia following LoE, our results of operations and financial condition will be materially harmed.

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

Labor shortages and costs have also adversely impacted dialysis providers.

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

• the availability of adequate coverage and reimbursement by, and the availability of discounts, rebates and price concessions to third party payors, pharmacy benefit managers, or PBMs , and governmental authorities;

• the availability of adequate coverage and reimbursement by, and the availability of discounts, rebates and price concessions to dialysis organizations, third party payors, pharmacy benefit managers, or PBMs , and governmental authorities;

• the availability of discounts and rebates to dialysis organizations to facilitate access for patients;

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

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

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

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Several healthcare facilities, including DaVita, have previously restricted access for non-patients as a result of the recent COVID-19 pandemic, resulting in restricted access for certain members of our sales force.

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for Auryxia, which we believe that we can leverage in the U.S.

for Vafseo as well, with incremental additional hires in our sales force and medical affairs department.

for Vafseo as well, with incremental additional hires in our sales force.

If the sales and marketing team cannot successfully commercialize Auryxia or Vafseo, it could have a material adverse effect on our product revenue and our financial condition.

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We may underestimate the size of the sales force required for a successful product launch, and we may need to expand our sales force to a greater extent or earlier than we currently plan and at a higher cost than we anticipated.

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We devote significant effort to recruiting individuals with experience in the sales and marketing of pharmaceutical products.

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

In addition, if we are not successful in contracting with dialysis organizations for the sale of Auryxia or Vafseo on favorable terms, in a timely matter or at all, we will not be successful in commercializing Auryxia and Vafseo.

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

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

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

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

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

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

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

Even if we obtain coverage for an approved product, third party payors may not establish adequate reimbursement amounts, which may reduce the demand for our product and prompt us to have to reduce pricing for the product.

If reimbursement is not available or is limited, we may not be able to successfully commercialize certain of our products.

Coverage and reimbursement by a governmental authority, third-party payor or PBMs may depend upon a number of factors, including the determination that use of a product is:

If reimbursement is not available or is limited, we may not be able to successfully commercialize

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certain of our products.

Coverage and reimbursement by a governmental authority, dialysis organization, third-party payor or PBMs may depend upon a number of factors, including the determination that use of a product is:

• a covered benefit under the health plan;

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• cost effective.

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

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

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

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In January 2011, CMS implemented the ESRD PPS, a prospective payment system for dialysis treatment.

Under the ESRD PPS, CMS generally makes a single bundled payment to the dialysis facility for each dialysis treatment that covers all items and services routinely required for dialysis treatments furnished to Medicare beneficiaries in Medicare-certified ESRD facilities or

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at their home.

The inclusion of oral medications without injectable or intravenous equivalents such as Auryxia in the bundled payment was initially delayed by CMS until January 1, 2014, and through several subsequent legislative actions has been delayed until January 1, 2025.

Absent further legislation or regulation on this matter, beginning in January 2025, oral ESRD-related drugs without injectable or intravenous equivalents, including Auryxia and all other phosphate lowering medications, will be included in the ESRD bundle and separate Medicare payment for these drugs will no longer be available, as is the case today under Medicare Part D.

ESRD facilities may nonetheless receive a Transitional Drug Add-on Payment Adjustment, or TDAPA , for new renal dialysis drugs and biological products that meet certain criteria for a period of two years.

The TDAPA will provide separate payment based on the drug’s Average Sales Price, or ASP , that will be in addition to the base rate in order to facilitate the adoption of innovative therapies.

There can be no assurances that CMS will not again delay the inclusion of these oral ESRD-related drugs in the bundled payment.

In July 2023, the U.S.

House of Representatives introduced the Kidney Patient Access to Technologically Innovative and Essential Nephrology Treatments (PATIENT) Act (H.R.

5074), or the Patient Act , and the Senate advanced a similar bill (S.

4510), which legislation, if passed and enacted into law prior to January 1, 2025, would delay the inclusion of phosphorus lowering drugs in the bundled payment.

In addition, in July 2024, Ardelyx, Inc., or Ardelyx , filed a complaint in the United States District Court for the District of Columbia against the U.S.

Department of Health and Human Services, or HHS , CMS and other parties, which alleged that CMS’s plan to include oral-only phosphate lowering therapies in the ESRD PPS violated its statutory and regulatory authority under the Medicare Improvements for Patients and Providers Act, which established the ESRD PPS bundled payment system for dialysis services in 2008.

If Ardelyx is successful in its claims, oral-only phosphate lowering therapies, including Auryxia, may not be included in the ESRD bundle.

Even if Auryxia is deemed eligible by CMS and included in the ESRD bundle, revenue for sales of Auryxia could be significantly less in the TDAPA period than it would be if Auryxia is not bundled into the ESRD PPS.

Moreover, in the post-TDAPA period, CMS currently expects to increase the single bundled payment base rate paid to the dialysis facility for each dialysis treatment to reflect that oral only phosphate lowering drugs will be reimbursed as part of the single bundled payment for Medicare patients.

There can be no assurances that any increase in the single bundled payment base rate will be sufficient to adequately reimburse the dialysis facilities for Auryxia at a price that allows us to continue to sell Auryxia at a profit.

In October 2024, Ardelyx filed for a preliminary injunction to enjoin CMS from including oral-only phosphate lowering therapies in the ESRD PPS.

CMS had earlier filed a motion to dismiss the complaint.

The court has not scheduled a date for oral argument on these motions and, instead, indicated that it may address these motions on the papers alone.

If the Patient Act is passed and enacted into law prior to January 1, 2025 or Ardelyx is successful in its claims, oral-only phosphate lowering therapies, including Auryxia, may not be included in the ESRD bundle in 2025 or at all, which could reduce anticipated revenue for Auryxia.

Even if Auryxia is included in the ESRD bundle, the TDAPA reimbursement amount for Auryxia may be lower than anticipated or revenue for sales of Auryxia could be significantly less in the TDAPA period than anticipated or than it would be if Auryxia is not bundled into the ESRD PPS, which would have an adverse impact on our revenue.

In the post-TDAPA period, CMS currently expects to increase the single bundled payment base rate paid to the dialysis facility for each dialysis treatment to reflect that oral only phosphate lowering drugs will be reimbursed as part of the single bundled payment for Medicare patients.

However, there can be no assurances that any increase in the single bundled payment base rate will be sufficient to adequately reimburse the dialysis facilities for Auryxia at a price that allows us to continue to sell Auryxia at a profit.

In addition, in September 2018, CMS decided that Auryxia would no longer be covered by Medicare for the treatment of iron deficiency anemia, or IDA , in adult patients not on dialysis, or NDD-CKD .

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

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Auryxia is reimbursed only for the Hyperphosphatemia Indication.

We decided beginning in 2022 to terminate certain Part D contracts, as patients no longer had the access benefit given the prior authorization requirement.

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Manufacturers of outpatient prescription drugs may be required to provide discounts or rebates under government healthcare programs or to certain third-party payors in order to obtain coverage of such products.

Additionally, we may be required to enter into contracts with third party payors and/or PBMs offering rebates or discounts on our products in order to obtain favorable formulary status and we may not be able to agree upon commercially reasonable terms with such third party payors or PBMs, or provide data sufficient to obtain favorable coverage and reimbursement for many reasons, including that we may be at a competitive disadvantage relative to companies with more extensive product lines.

In addition, third party payors, PBMs and other entities that purchase our products may impose restrictions on our ability to raise prices for our products over time without incurring additional costs.

Additionally, we will be required to enter into contracts with dialysis organizations, GPOs, third party payors and/or PBMs offering rebates or discounts on our products in order to obtain favorable formulary status, and we may not be able to agree upon commercially reasonable terms with such dialysis organizations, GPOs, third party payors or PBMs, or provide data sufficient to obtain favorable coverage and reimbursement for many reasons, including that we may be at a competitive disadvantage relative to companies with more extensive product lines.

In addition, dialysis organizations, GPOs, third party payors, PBMs and/or other entities that purchase our products may impose restrictions on our ability to raise prices for our products over time without incurring additional costs.

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

and Cencora, Inc., formerly known as AmerisourceBergen Drug Corporation, in the aggregate, accounted for a significant percentage of our gross revenue during the three and six months ended June 30, 2024 and the year ended December 31, 2023.

and Cencora, Inc., formerly known as AmerisourceBergen Drug Corporation, in the aggregate, accounted for a significant percentage of our gross revenue during the three and nine months ended September 30, 2024 and the year ended December 31, 2023.

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

We currently believe it is likely that Vafseo will be reimbursed using the TDAPA, followed by inclusion in the bundled reimbursement model for Medicare beneficiaries, but reimbursement under TDAPA is subject to review and approval by CMS.

Additionally, obtaining reimbursement under the TDAPA for Vafseo is expected to take six months following filing acceptance, and we expect to receive reimbursement under TDAPA starting on January 1, 2025, which timing will affect adoption, uptake and product revenue for Vafseo.

However, if there are updates to the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected.

For example, the Medicare Payment Advisory Commission, an independent legislative branch advisory body to Congress on

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issues related to the Medicare program, has recommended that TDAPA not be provided to newly approved drug products considered to fall within “functional categories” for which costs are already accounted for in the bundled reimbursement model, such as for anemia management drugs.

Further, we expect Vafseo to be included in the fixed reimbursement model for a bundle of dialysis services, or the bundle, which will require us to enter into contracts to supply Vafseo to specific dialysis providers, instead of through distributors, which we believe could be challenging.

Vafseo will be included in the bundled reimbursement model for Medicare beneficiaries and, in October 2024, CMS determined that Vafseo will receive a TDAPA for at least two years starting on January 1, 2025.

However, if there are updates to the TDAPA rule that decrease the basis for reimbursement or if the TDAPA is eliminated, then our profitability may be adversely affected.

For example, the Medicare Payment Advisory Commission, an independent legislative branch advisory body to Congress on issues related to the Medicare program, has recommended that TDAPA not be provided to newly approved drug products considered to fall within “functional categories” for which costs are already accounted for in the bundled reimbursement model, such as for anemia management drugs.

Further, Vafseo will be included in the fixed reimbursement model for a bundle of dialysis services, which will require us to enter into contracts to supply Vafseo to specific dialysis providers, instead of through distributors, which we believe could be challenging.

The dialysis market is unique and is dominated by two providers:

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

Under the Vifor Termination Agreement, we have regained our rights to sell Vafseo to Fresenius Medical Care North America and its affiliates, including Fresenius Kidney Care Group LLC, to certain third-party dialysis organizations approved by us, to independent dialysis organizations that are members of group purchase organizations, and to certain non-retail specialty pharmacies in the U.S.

See Note 8, Deferred Revenue, Refund Liability and Liability Related to Sale of Future Royalties , to our unaudited condensed consolidated financial statements in Part I, Item 1.

Under the Vifor Termination Agreement, we have regained our rights to sell Vafseo to Fresenius Medical Care North America and its affiliates, including Fresenius Kidney Care Group LLC, to certain third-party dialysis organizations approved by us, to independent dialysis organizations that are members of group purchasing organizations, and to certain non-retail specialty pharmacies in the U.S.

See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , to our unaudited condensed consolidated financial statements in Part I, Item 1.

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

If we are not able to enter into a supply agreement with DaVita, Fresenius Medical Care or other dialysis organizations for the sale of Vafseo, our business may be materially harmed.

If we are not able to enter into supply agreements with dialysis organizations for the sale of Vafseo on favorable terms, in a timely matter or at all, our business may be materially harmed.

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

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Existing competitive products may enter into sole source agreements with dialysis providers that impact the ability for new product innovations and new competitors may face price pressure based on existing contracts with dialysis providers.

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Further, in many countries outside the U.S., a drug must be approved for reimbursement before it can be marketed or sold in that country.

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If existing or new competitors of Auryxia or Vafseo take market share from us, it could have an adverse impact on our revenue and our business.

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Auryxia is competing in the hyperphosphatemia market in the U.S.

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for the treatment of IDA in July 2021.

In Japan, our Japanese sublicensee, Japan Tobacco International, or JT , and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii , commercialize Riona (ferric citrate hydrate).

In the hyperphosphatemia market, Riona competes with Fosrenol® (lanthanum carbonate hydrate) marketed by Bayer Yakuhin Ltd., generic lanthanum carbonate hydrate products, and Phozevel® (tenapor hydrochloride) marketed by Kyowa Kirin Co., Ltd.

In the IDA market in Japan, Riona competes with Ferromia® (sodium ferrous citrate) marketed by Alfresa Pharma Corporation and Fero-Gradumet® (dried ferrous sulfate) marketed by Viatris Inc.

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

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

Other companies

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

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

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Drugs that may compete with Vafseo include Epogen® (epoetin alfa) and Aranesp® (darbepoetin alfa), both commercialized by Amgen, Procrit® (epoetin alfa) and Eprex® (epoetin alfa), commercialized by Johnson & Johnson in the U.S.

and Europe, respectively, and Mircera® (methoxy PEG-epoetin beta), commercialized by CSL Vifor in the U.S.

and Roche Holding Ltd.

outside of the U.S.

and Evrenzo® (roxadustat) in Europe commercialized by Astellas Pharma Inc.

and Europe, respectively, Mircera® (methoxy PEG-epoetin beta), commercialized by CSL Vifor in the U.S.

and Roche Holding Ltd., or Roche , outside of the U.S., Evrenzo® (roxadustat) in Europe commercialized by Astellas Pharma Inc., Eporatio® (epoetin theta) in Europe commercialized by Teva Pharmaceuticals Ltd., Silapo® (epoetin zeta) in Europe commercialized by Stada Arzneimittel AG, Epoetin Alfa Hexal® (epoetin alfa) in Europe commercialized by Hexal AG, Binocrit® (epoetin alfa-biosimilar) in Europe commercialized by Sandoz, and NeoRecormon® (epoetin beta) in Europe commercialized by Roche.

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

There are several other HIF-PH inhibitor product candidates in various stages of development for anemia indications that may be in direct competition with Vafseo if and when they are approved and launched commercially.

These candidates are being developed by companies such as Japan Tobacco International, or JT , and Bayer HealthCare AG, or Bayer .

There are several other oral hypoxia-inducible factor prolyl hydroxylase inhibitor product candidates in various stages of development for anemia indications that may be in direct competition with Vafseo if and when they are approved and launched commercially.

These candidates are being developed by companies such as JT and Bayer HealthCare AG, or Bayer .

For example, FibroGen filed an NDA for its product candidate, roxadustat, with the FDA, to which the FDA issued a complete response letter indicating the FDA will not approve the NDA in its present form and requested that an additional clinical trial for roxadustat be conducted prior to resubmission of the NDA or additional response to the FDA’s complete response letter.

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

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

A biosimilar is a biologic product that is licensed for marketing based on demonstrating that it is highly similar to an existing, FDA-approved branded biologic product (i.e., a reference biologic product).

The patents for the existing, branded biologic product must expire in a given market before biosimilars may enter that market without the risk of being sued for patent infringement.

In addition, an application for a

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biosimilar product can only be approved by the FDA 12 years after the existing, branded product was approved under a Biologics License Application, or BLA.

In addition, an application for a biosimilar product can only be approved by the FDA 12 years after the existing, branded product was licensed under a Biologics License Application, or BLA .

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

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Smaller and other early-stage companies may also prove to be significant competitors.

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

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

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

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subject us to a variety of risks associated with international operations, which could materially adversely affect our business.

Our Japanese sublicensee, JT, and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii , commercialize Riona, the trade name for ferric citrate hydrate in Japan, as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and for the treatment of adult patients with IDA in Japan.

Our Japanese sublicensee, JT, and its subsidiary, Torii, commercialize Riona, the trade name for ferric citrate hydrate in Japan, as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and for the treatment of adult patients with IDA in Japan.

In Japan and certain other countries in Asia, we granted MTPC exclusive rights to commercialize Vafseo, which has been approved and is being marketed by MTPC in Japan under the trade name Vafseo.

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

We also granted Averoa SAS, or Averoa , an exclusive license to develop and commercialize ferric citrate in the EEA, Turkey, Switzerland, UK, Balkans, and certain countries in Eastern Europe and the Middle East, or the Averoa Territory .

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

In May 2023, we entered into the license agreement with Medice, pursuant to which we granted Medice an exclusive license to develop and commercialize Vafseo for the treatment of anemia in patients with CKD in the Medice Territory, and we transferred the marketing authorization issued by the EMA, UK and Swissmedic to Medice.

We will also transfer the marketing authorization for Australia to Medice.

In addition, we have conducted and in the future plan to conduct clinical trials outside of the U.S.

for Auryxia, Vafseo and any other product or product candidate that may be in-licensed or acquired.

Pursuant to the license agreement, we transferred the marketing authorization issued by the EMA, UK, Swissmedic and Australia to Medice.

In addition, we have conducted and in the future may conduct clinical trials outside of the U.S.

for any product or product candidate that may be in-licensed or acquired.

As a result of these and other activities, we are or may become subject to additional risks in developing and commercializing Auryxia and Vafseo outside the U.S., including, among others:

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

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

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

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Risks Related to Product Development

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We have several lifecycle management and label expansion opportunities currently under evaluation for Vafseo, one of which is the potential for alternative dosing, and another of which is label expansion for the treatment of adult patients with NDD-CKD.

However, we may be required to complete additional clinical trials before seeking approval for each such opportunity, which are time consuming and expensive, and even though Vafseo is approved as a treatment for anemia due to CKD for dialysis dependent patients, we may not be successful in any of our life cycle management or label expansion opportunities in the timeframe anticipated by us, or at all.

However, we will be required to complete additional clinical trials before seeking approval for label expansion for the treatment of adult patients with NDD-CKD and we may be required to generate additional clinical data before seeking approval for alternative dosing.

Clinical trials are time consuming and expensive, and even though Vafseo is approved as a treatment for anemia due to CKD for dialysis dependent patients, we may not be successful in any of our lifecycle management or label expansion opportunities in the timeframe anticipated by us, or at all.

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

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We may be required to complete additional clinical trials for Auryxia, Vafseo and any other product or product candidate, including those that may be in-licensed or acquired, in order to obtain or maintain required regulatory approvals.

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Our preclinical studies and clinical trials may take longer to complete than currently anticipated, or may be delayed, suspended, required to be repeated, prematurely terminated or may not successfully demonstrate safety and/or efficacy needed to obtain or maintain regulatory approval for a variety of other reasons, such as:

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• the supply or quality of our starting materials, drug substance and drug product necessary to conduct clinical trials of our product candidates may be insufficient or inadequate;

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

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noncompliance with regulatory requirements, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using our product candidate, or a finding that the participants are being exposed to unacceptable health risks;

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

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

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

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

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

Significant preclinical or clinical trial delays also could shorten any periods during which we may have the

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exclusive right to commercialize Vafseo for potential future indications or any product candidate that is approved, including those that may be in-licensed or acquired, or allow our competitors to bring products to market before we do.

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

We may find it difficult to enroll patients in our clinical trials, which could delay or prevent clinical trials of Auryxia, Vafseo or any other product or product candidate, including those that may be in-licensed or acquired.

Identifying and qualifying patients to participate in clinical trials is critical to our success.

Identifying and qualifying patients to participate in clinical trials is critical to the success of our clinical trials.

The timing of our clinical trials depends, in part, on the speed at which we can recruit patients to participate in our clinical trials.

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• site staffing shortages and turnover;

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• clinical trial sites and investigators failing to perform effectively;

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Unlike most guidance documents issued by the FDA, the DAP guidance when finalized will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are specified in FDA guidance.

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Conducting clinical trials outside of the U.S., as we have done historically and as we may decide to do in the future, presents additional risks and complexities and, if we decide to conduct a clinical trial outside of the U.S.

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However, the approved indication is limited to the treatment of anemia due to CKD in adults who have been receiving dialysis for at least three months.

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If we or others identify undesirable effects caused by, or other undesirable properties of, Auryxia, Vafseo or any other product or product candidate, including those that may be in-licensed or acquired, or if known undesirable effects are more frequent or severe than in the past, or if any of the foregoing are perceived to have occurred, either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:

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• we may decide to, or be required to, send drug warnings or safety alerts to physicians, pharmacists and hospitals (or the FDA or other regulatory authorities may choose to issue such alerts), or we may decide to conduct a product recall or be requested to do so by the FDA or other regulatory authority;

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• reformulation of the product, additional non-clinical or clinical trials, restrictive changes in labeling or changes to or re-approvals of manufacturing facilities may be required;

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Patients with DD-CKD experienced an increased risk of thromboembolic events compared to darbepoetin alfa with a time to first event HR of 1.20 (95% CI 0.96 — 1.50) driven by thrombosis of vascular access.

With respect to the global PRO 2 TECT Phase 3 program, the incidence of TEAEs during the erythropoiesis stimulating agent, or ESA , untreated patients study (Correction) in the Vafseo-treated patients was 90.9%, and 91.6% in darbepoetin alfa-treated patients.

With respect to the global PRO 2 TECT Phase 3 program, the incidence of TEAEs during the ESA untreated patients study (Correction) in the Vafseo-treated patients was 90.9%, and 91.6% in darbepoetin alfa-treated patients.

During the study, the most common TEAEs reported in Vafseo/darbepoetin alfa-treated patients were end-stage renal disease (34.7%/ 35.2%), hypertension (17.7%/ 22.1.%), hyperkalemia (12.3.%/ 15.6%), urinary tract infection (12.9%/ 12.0%), diarrhea (13.9%/ 10.0%), peripheral oedema (12.5%/ 10.5%), fall (9.6%/ 10%) and nausea (10%/ 8.2%).

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The incidence of TEAEs during the ESA-treated patients study (Conversion) in Vafseo-treated patients was 89.1% and 87.7% in darbepoetin alfa-treated patients.

During the study, the most common TEAEs reported in Vafseo/darbepoetin alfa-treated patients were end-stage renal disease (27.5%/ 28.4%), hypertension (14.4%/ 14.8%), urinary tract infection (12.2%/ 14.5%), diarrhea (13.8.%/ 8.8.%), peripheral

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oedema (9.9%/ 10.1%) and pneumonia (10.0%/ 9.7%).

Serious TEAEs were 58.5% for Vafseo-treated patients and 56.6% for darbepoetin alfa-treated patients.

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

Additionally, the FDA expressed safety concerns related to the risk of drug-induced liver injury in the CRL that it issued in March 2022, which safety concerns were addressed following the FDRR and resubmission to our NDA.

Additionally, the FDA expressed safety concerns related to the risk of drug-induced liver injury in the CRL that it issued in March 2022, and these safety concerns were addressed following the FDRR and resubmission to our NDA.

Serious adverse events related to Vafseo, including those noted in the CRL and label, and any other product candidates could have material adverse consequences on the development and potential label expansion of Vafseo or the approval of our other product candidates and our business as a whole.

Our understanding of adverse events in prior clinical trials of our product candidates may change as we gather more information, the FDA may not agree with our assessment of adverse events and additional unexpected adverse events may be observed in future clinical trials or in the market.

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

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

Further, any product candidate may not receive marketing approval in the U.S.

even if it is approved in other countries.

Each regulatory authority makes their own assessment as to the safety and efficacy of a drug, and the FDA’s concern about the safety or efficacy of any product candidate could impact the regulatory authority’s decision in another country.

In March 2022, we received the CRL from the FDA regarding our NDA for vadadustat for the treatment of anemia due to CKD.

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However, we expended significant additional resources to obtain the approval of Vafseo and the commercialization of Vafseo was delayed, which had and could continue to have an adverse effect on our business.

Further, any product candidate may not receive marketing approval in the U.S.

even if it is approved in other countries.

Vafseo is currently approved as a treatment for anemia due to CKD for dialysis dependent patients in the U.S., European Union, United Kingdom, Switzerland and Australia.

In Japan, Vafseo is approved as a treatment for anemia due to CKD in both dialysis dependent and non-dialysis dependent patients and is marketed and sold by our collaborator MTPC .

In Taiwan and South Korea, Vafseo is approved for the treatment of symptomatic anemia due to CKD in adult patients on chronic maintenance dialysis.

We are not permitted to market Vafseo in any additional jurisdictions until the requisite approval from regulatory authorities in such jurisdiction is received.

As a condition to receiving marketing approval for Vafseo in additional territories or for other indications, we may be required by regulatory authorities to conduct additional preclinical studies or clinical trials.

For example, we have several lifecycle management and label expansion opportunities currently under evaluation for Vafseo, one of which is the potential for alternative dosing, and another of which

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is label expansion for the treatment of adult patients with NDD-CKD.

However, we may be required to complete additional clinical trials before seeking approval for additional indications, which are time consuming and expensive, and even though Vafseo is approved as a treatment for anemia due to CKD for dialysis dependent patients, we may not be successful in any of our life cycle management or label expansion opportunities in the timeframe anticipated by us, or at all.

For example, we have several lifecycle management and label expansion opportunities currently under evaluation for Vafseo, one of which is the potential for alternative dosing, and another of which is label expansion for the treatment of adult patients with NDD-CKD.

However, we may be required to complete additional clinical trials before seeking approval for additional indications, which are time consuming and expensive, and even though Vafseo is approved as a treatment for anemia due to CKD for dialysis dependent patients, we may not be successful in any of our lifecycle management or label expansion opportunities in the timeframe anticipated by us, or at all.

Obtaining marketing approval in the U.S.

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

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

In April 2024, our partner Averoa submitted its marketing authorization application for ferric citrate in Europe.

although we successfully negotiated an extension to December 23, 2019, we did not commence marketing

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Fexeric by such date and therefore the Fexeric approval in the EU has ceased to be valid.

In April 2024, our partner Averoa submitted its marketing authorization application for ferric citrate in Europe and the application is still under review.

Safety concerns with a given product may impact marketing approval.

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Changes in or the enactment of additional statutes, promulgation of regulations or issuance of guidance during preclinical or clinical development, or comparable changes in the regulatory review process for each submitted product application, may cause delays in the approval or rejection of an application.

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

For example, in December 2022, with the passage of FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP , for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.

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

In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for DAPs.

Further, on January 31, 2022, the new Clinical Trials Regulation (EU) No 536/2014 became applicable in the EU and replaced the prior Clinical Trials Directive 2001/20/EC.

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• the relevant regulatory authority may grant approval contingent on the performance of costly post-marketing clinical trials;

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• the relevant regulatory authority’ s onsite inspections may be delayed due to the recent COVID-19 pandemic or otherwise;

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

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

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• the policies or regulations of the relevant regulatory authority may significantly change in a manner that renders our clinical data insufficient for approval or requires us to amend or submit new clinical protocols.

Finally, our ability to develop and market new drug products may be impacted if litigation challenging the FDA’s approval of another company’s drug continues.

Finally, our ability to develop and market new drug products may be impacted by litigation challenging the FDA’s approval of another company’s drug product.

In April 2023, the U.S.

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The Court of Appeals for the Fifth Circuit declined to order the removal of mifepristone from the market but did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone, which the FDA authorized in 2016 and 2021, were arbitrary and capricious.

In June 2024, the Supreme Court reversed and remanded that decision after unanimously finding that the plaintiffs did not have standing to bring this legal action against the FDA.

Depending on the outcome of this litigation, if it continues, our ability to develop new drug product candidates and to maintain approval of existing drug products is at risk and could be delayed, undermined or subject to protracted litigation.

In June 2024, the Supreme Court reversed that decision after unanimously finding that the plaintiffs did not have standing to bring this legal action against the FDA.

On October 11, 2024, the Attorneys General of three states (Missouri, Idaho and Kansas) filed an amended complaint in the U.S.

District Court for the Northern District of Texas challenging the FDA’s actions.

Depending on the outcome of this litigation, our ability to develop new drug product candidates and to maintain approval of existing drug products could be delayed, undermined or subject to protracted litigation.

Products approved for marketing are subject to extensive post-marketing regulatory requirements, including post-approval pediatric studies for Auryxia and Vafseo, and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties, including withdrawal of marketing approval, if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, or product candidates, when and if approved.

Marketing approvals may be subject to limitations on the approved indicated uses for which the product may be marketed or other conditions of approval, or contain requirements or commitments for potentially costly post-marketing studies and surveillance to monitor the safety and efficacy of the product, including REMS, or registries or observational studies.

Marketing approvals may be subject to limitations on the approved indicated uses for which the product may be marketed, other conditions of approval, or contain requirements or commitments for potentially costly post-marketing studies and surveillance to monitor the safety and efficacy of the product, including REMS, or registries or observational studies.

For example, in connection with the FDA approvals of Auryxia and Vafseo, we committed to the FDA to conduct certain post-approval pediatric studies of Auryxia and Vafseo under the Pediatric Research Equity Act of 2003, or PREA .

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The PMR trial is ongoing and actively recruiting patients, but the final report for the trial was due in April 2024, so the trial is considered delayed.

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

We did not meet a milestone relating to this post-approval pediatric study of Auryxia in a timely manner and received a notification from the FDA.

With regard to Auryxia for the treatment of IDA in adult NDD-CKD patients, or IDA Indication , we initially committed to completing the post-approval pediatric study and submitting a final report to the FDA by January 2023.

We did not meet a required milestone relating to this post-approval pediatric study of Auryxia in a timely manner and received a notification from the FDA.

Subsequently, the FDA agreed to extend the pediatric clinical trial timelines for the IDA Indication and required that the final report be submitted in August 2024.

We subsequently communicated to the FDA that we would be delaying the start of the clinical trial in the IDA Indication while we work to produce smaller size tablets.

In response, the FDA issued a partial clinical hold until we

In response, the FDA issued a partial clinical hold until we manufacture the smaller tablets and provide the FDA with relevant information regarding the smaller sized tablets for review.

The FDA lifted the partial clinical hold in June 2022, and we continued to conduct feasibility, however, we have not commenced start-up of this study.

In February 2024, we requested an extension for the submission of the final report and such request was denied by the FDA in April 2024.

In October 2024, we received a letter from the FDA regarding our non-compliance with PREA due to our failure to complete the IDA post-approval pediatric study, and we submitted our response, including a proposal to waive the PMR with regard to the IDA Indication, to the FDA on November 1, 2024.

If the FDA denies our waiver of the PMR with regard to the IDA Indication, or we are unable to complete these studies successfully or have further delays in completing these studies, we will need to inform the FDA, have

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manufacture the smaller tablets and provide the FDA with relevant information regarding the smaller sized tablets for review.

The FDA lifted the partial clinical hold in June 2022, however, we have not commenced start-up of this study as we are continuing to evaluate the protocol for the study.

In February 2024, we requested an extension for the submission of the final report and such request was denied by the FDA in April 2024.

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

further discussions and, if the FDA finds that we failed to comply with pediatric study requirements, in violation of applicable law, it could institute enforcement proceedings to seize or enjoin the sale of Auryxia, seek civil penalties or other adverse consequences, which would have a material adverse impact on our ability to commercialize Auryxia and our ability to generate revenues from Auryxia.

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

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

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• l aws and regulations governing the conduct of preclinical studies and clinical trials in the U.S.

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

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• data privacy laws existing in the U.S., the EU, the UK and other countries in which we operate, including the U.S.

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

• analogous state laws and regulations, such as state anti-kickback and false claims laws and gift ban and transparency statutes, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by state Medicaid or other programs, or non-governmental third party payors, including private insurers,

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

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and which are not preempted by federal laws and often differ from state to state, thus complicating compliance efforts;

Because of the breadth of these U.S.

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Further, if any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from participation in government funded healthcare programs.

Several significant administrative law cases were decided by the U.S.

Supreme Court in 2024, most notably Loper Bright Enterprises v.

Raimondo , which overruled Chevron U.S.A., Inc.

Natural Resources Defense Council, Inc .

Since 1984, Chevron had required that courts defer to reasonable agency interpretations of statutes and agency action.

In Loper Bright , the Supreme Court held that the U.S.

Administrative Procedure Act requires courts to exercise their independent judgment when deciding whether an agency has acted within its statutory authority, and that courts may not defer to an agency interpretation solely because a statute is ambiguous.

These decisions may result in additional legal challenges to regulations and guidance issued by federal regulatory agencies, including the FDA and CMS, that we have relied on and intend to rely on in the future.

Any such challenges, if successful, could have an impact on our business, and any such impact could be material.

In addition to potential changes to regulations and agency guidance as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays in and other impacts to the agency rulemaking process, any of which could adversely impact our business and operations.

In addition, we could be adversely affected by several significant administrative law cases decided by the U.S.

Supreme Court in 2024.

In Loper Bright Enterprises v.

Raimondo , for example, the court overruled Chevron U.S.A., Inc.

Natural Resources Defense Council, Inc ., which for 40 years required federal courts to defer to permissible agency interpretations of statutes that are silent or ambiguous on a particular topic.

The Supreme Court stripped federal agencies of this presumptive deference and held that courts must exercise their independent judgment when deciding whether an agency such as FDA acted within its statutory authority under the Administrative Procedure Act, or APA .

Additionally, in Corner Post, Inc.

Board of Governors of the Federal Reserve System , the court held that actions to challenge a federal regulation under the APA can be initiated within six years of the date of injury to the plaintiff, rather than the date the rule is finalized.

The decision appears to give prospective plaintiffs a personal statute of limitations to challenge longstanding agency regulations.

These decisions could introduce additional uncertainty into the regulatory process and may result in additional legal challenges to actions taken by federal regulatory agencies, including the FDA and CMS, that we rely on.

In addition to potential changes to regulations as a result of legal challenges, these decisions may result in increased regulatory uncertainty and delays and other impacts, any of which could adversely impact our business and operations.

We will incur significant liability if it is determined that we are promoting any “off-label” use of Auryxia, Vafseo or any other product we may develop, in-license or acquire or if it is determined that any of our activities violates the federal Anti-Kickback Statute.

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Accordingly, we may not promote Auryxia in the U.S.

for use in any indications other than the Hyperphosphatemia Indication and the IDA Indication, and Vafseo for the treatment of anemia due to CKD in

for use in any indications other than the Hyperphosphatemia Indication and the IDA Indication, and Vafseo for the treatment of anemia due to CKD in adults who have been receiving dialysis for at least three months, and all promotional claims must be consistent with the FDA-approved labeling for Auryxia or Vafseo, as applicable.

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adults who have been receiving dialysis for at least three months, and all promotional claims must be consistent with the FDA-approved labeling for Auryxia or Vafseo, as applicable.

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

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This draft guidance calls for such communications to be truthful, non-misleading, factual, and unbiased and include all information necessary for healthcare providers to interpret the strengths and weaknesses and validity and utility of the information about the unapproved use.

In addition, under some relatively recent guidance from the FDA and the Pre-Approval Information Exchange Act signed into law as part of the Consolidated Appropriations Act of 2023, or the Consolidated Appropriations Act , companies may also provide information that is consistent with a product’s FDA-approved labeling and proactively speak to formulary committee members of payors regarding data for an unapproved drug or unapproved uses of an approved drug.

In addition, under some relatively recent guidance from the FDA and the Pre-Approval Information Securities Exchange Act of 1934, as amended, or the Exchange Act, signed into law as part of the Consolidated Appropriations Act of 2023, or the Consolidated Appropriations Act , companies may also provide information that is consistent with a product’s FDA-approved labeling and proactively speak to formulary committee members of payors regarding data for an unapproved drug or unapproved uses of an approved drug.

We intend to engage in these discussions and communicate with healthcare providers, payors and other constituencies in compliance with all applicable laws, regulatory guidance and industry best practices.

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If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our, or our collaboration partners’, regulatory submissions, which could have a material adverse effect on our business.

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

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or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Compliance with privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.

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There is ongoing uncertainty about the transfer mechanisms that companies rely upon to enable the legal transfer of personal data from the EU to other countries.

For example, in July 2020, the Court of Justice of the European Union, or the CJEU, invalidated the EU-U.S.

For example, in July 2020, the Court of Justice of the European Union invalidated the EU-U.S.

Privacy Shield, one of the mechanisms used to legitimize the transfer of personal data from the EEA to the U.S.

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The uncertainty around this issue has the potential to impact our business internationally.

Given the breadth and depth of changes in data protection obligations, complying with the GDPR’s requirements is rigorous and time intensive and requires significant resources and a review of our technologies, systems and practices, as well as those of any third party collaborators, service providers, contractors or consultants that process or transfer personal data collected in the EU.

The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of

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The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices and put in place additional compliance mechanisms, may interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business, and could lead to government enforcement actions, private litigation and significant fines and penalties against us and could have a material adverse effect on our business, financial condition or results of operations.

sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices and put in place additional compliance mechanisms, may interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business, and could lead to government enforcement actions, private litigation and significant fines and penalties against us and could have a material adverse effect on our business, financial condition or results of operations.

Similar privacy and data security requirements are either in place or underway in the U.S.

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There are also states that are specifically regulating health information that may affect our business.

For example, Washington state passed a health privacy law in 2023 that will regulate the collection and sharing of health information, and the law also has a private right of action, which further increases the relevant compliance risk.

For example, Washington state passed a health privacy law in 2023 that regulates the collection and sharing of health information, and the law also has a private right of action, which further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data and additional states (including Vermont) are considering such legislation for 2024.

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

Plaintiffs’ lawyers are also increasingly using privacy-related statutes at both the state and federal level to bring lawsuits against companies for their data-related practices.

In particular, there have been a significant number of cases filed against companies for their use of pixels and other web trackers.

These cases often allege violations of the California Invasion of Privacy Act and other state laws regulating wiretapping, as well as the federal Video Privacy Protection Act.

The rise in these types of lawsuits creates potential risk for our business.

A broad range of legislative measures also have been introduced at the federal level.

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That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America, or PhRMA , but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue HHS.

Seven states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the importation of drugs from Canada.

North Dakota and Virginia have passed legislation establishing workgroups to examine the impact of a

Seven states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the importation

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state importation program.

As of May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) have submitted Section 804 Importation Program proposals to the FDA and, on January 5, 2024, the FDA approved Florida’s plan for Canadian drug importation.

of drugs from Canada.

North Dakota and Virginia have passed legislation establishing workgroups to examine the impact of a state importation program.

As of May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) have submitted Section 804 Importation Program proposals to the FDA.

Vermont has submitted a concept letter to HHS.

On January 5, 2024, the FDA approved Florida’s plan for Canadian drug importation.

Florida now has authority to import certain drugs from Canada for a period of two years once certain conditions are met.

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ESRD facilities may nonetheless receive a TDAPA for new renal dialysis drugs and biological products that meet certain criteria for a period of two years.

ESRD facilities may nonetheless receive a TDAPA for new renal dialysis drugs and biological products that meet certain criteria for a period of at least two years.

The TDAPA will provide separate payment based on the drug's ASP that will be in addition to the base rate in order to facilitate the adoption of innovative therapies.

There can be no assurances that CMS will determine that Auryxia will qualify for TDAPA status or that CMS will not again delay the inclusion of these oral ESRD-related drugs in the bundled payment.

In July 2023, the U.S.

House of Representatives introduced the Patient Act and the Senate advanced a similar bill, which legislation, if passed and enacted into law prior to January 1, 2025, would delay the inclusion of phosphorus lowering drugs in the bundled payment.

In addition, in July 2024, Ardelyx filed a complaint in the United States District Court for the District of Columbia against HHS, CMS and other parties, which alleged that CMS’s plan to include oral-only phosphate lowering therapies in the ESRD PPS violated its statutory and regulatory authority under the Medicare Improvements for Patients and Providers Act, which established the ESRD PPS bundled payment system for dialysis services in 2008.

If Ardelyx is successful in its claims, oral-only phosphate lowering therapies, including Auryxia, may not be included in the ESRD bundle, which could adversely affect sales of Auryxia.

Even if Auryxia is deemed eligible by CMS, and included in the ESRD bundle, revenue for sales of Auryxia could be significantly less in the TDAPA period than it would be if Auryxia is not bundled into the ESRD PPS.

Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D.

CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13

In October 2024, Ardelyx filed for a preliminary injunction to enjoin CMS from including oral-only phosphate lowering therapies in the ESRD PPS.

CMS had earlier filed a motion to dismiss the complaint.

The court has not scheduled a date for oral argument on these motions and, instead, indicated that it may address these motions on the papers alone.

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years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.

The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023.

On August 15, 2024, HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, CKD, and rheumatoid arthritis.

The prices of these ten drugs will become effective January 1, 2026.

On October 2, 2024, in final guidance, CMS indicated that it will announce the selection of up to 15 additional drugs covered by Part D for the second cycle of negotiations by February 1, 2025.

This second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.

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There have been various decisions by the courts considering these cases since they were filed.

HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.

Certain of these cases are now on appeal and oral arguments were held on October 30, 2024.

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

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• the level of taxes that we are required to pay.

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In addition, in some countries, including EU Member States, the pricing of prescription pharmaceuticals is subject to governmental control.

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If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, the commercial launch of our product and/or product candidates could be delayed, possibly for lengthy periods of time, we or our collaborators may not launch at all in a particular country, we may not be able to recoup our investment in one or more product candidates, and there could be a material adverse effect on our business.

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Our reporting and payment obligations under the Medicaid Drug Rebate Program and other governmental drug pricing programs are complex and may involve subjective decisions.

Our reporting and payment obligations under the Medicaid Drug Rebate Program, Medicare and other governmental drug pricing programs are complex and may involve subjective decisions.

Any failure to properly comply with those obligations could subject us to penalties and sanctions.

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Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the FDCA and other laws and regulations.

Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Unexpected refunds to the government, and

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responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Our collaborators are also subject to similar requirements outside of the U.S.

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If our collaborators suffer material and adverse effects from such risks and uncertainties, our rights and benefits for our licensed products could be negatively impacted, which could have a material and adverse impact on our revenues.

With the passage of the CREATES Act, we are exposed to possible litigation and damages by competitors who may claim that we are not providing sufficient quantities of our approved products on commercially reasonable, market-based terms for testing in support of their abbreviated new drug applications, or ANDAs, 505(b)(2) NDAs and biosimilar product applications.

With the passage of the CREATES Act, we are exposed to possible litigation and damages by competitors who may claim that we are not providing sufficient quantities of our approved products on commercially reasonable, market-based terms for testing in support of their ANDAs, 505(b)(2) NDAs and biosimilar product applications.

In December 2019, former President Trump signed legislation intended to facilitate the development of generic and biosimilar products.

The bill, previously known as the CREATES Act, authorizes sponsors of ANDAs, 505(b)(2) NDAs or biosimilar product applications to file lawsuits against companies holding NDAs or BLAs that decline to provide sufficient quantities of an approved reference drug or biological product on commercially reasonable, market-based terms.

Drug or biological products

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on FDA’s drug shortage list are exempt from these new provisions unless the product has been on the list for more than six continuous months or the FDA determines that the supply of the product will help alleviate or prevent a shortage.

Drug or biological products on FDA’s drug shortage list are exempt from these new provisions unless the product has been on the list for more than six continuous months or the FDA determines that the supply of the product will help alleviate or prevent a shortage.

To bring an action under the statute, the developer of a product candidate that seeks to develop the product and seek approval under an ANDA, 505(b)(2) NDA, or biosimilar product application must take certain steps to request the reference product from the reference product manufacturer, which, in the case of products covered by a REMS with elements to assure safe use, include obtaining authorization from the FDA for the acquisition of the reference product.

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We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.

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In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

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

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

Furthermore, in May 2023, we entered into a license agreement with Medice, pursuant to which we granted Medice an

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exclusive license to develop and commercialize Vafseo for the treatment of anemia in patients with CKD in the Medice Territory.

In addition, we granted to Averoa an exclusive license to develop and commercialize ferric citrate in the Averoa Territory.

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

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

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

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

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

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

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

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We may seek to establish additional collaborations and, if we are not able to establish them on commercially reasonable terms, or at all, we may have to alter our development and commercialization plans.

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

Negative fluctuations in these royalty revenues could delay, diminish or eliminate our ability to receive 85% of the Royalty Interest Payments after the Annual Cap is achieved in a given calendar year, or our ability to receive 100% of the Royalty Interest Payments after the Aggregate Cap is achieved.

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

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

We currently rely, and expect to continue to rely, on third party manufacturers to produce all of our commercial,

Negative fluctuations in these royalty revenues could delay, diminish or eliminate our ability to receive 85% of the Royalty Interest Payments after the Annual Cap is

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clinical and preclinical supply.

achieved in a given calendar year, or our ability to receive 100% of the Royalty Interest Payments after the Aggregate Cap is achieved.

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

We currently rely, and expect to continue to rely, on third party manufacturers to produce all of our commercial, clinical and preclinical supply.

We also utilize third parties for the commercial distribution of Auryxia, including wholesale distributors and certain specialty pharmacy providers, and we will utilize third parties for the commercial distribution of Vafseo.

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

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

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This supply interruption negatively impacted our revenues in 2016.

This supply interruption was resolved, and we have taken and

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continue to take actions designed to prevent future interruptions in the supply of Auryxia.

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

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

However, we had experienced issues in manufacturing Auryxia, and if we experience manufacturing issues going forward, or incur additional costs, or our actions to prevent future interruptions are not successful, we may experience additional supply issues.

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

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We may also encounter difficulties relating to our own quality processes and procedures, including regulatory compliance, lot release, quality control and quality assurance, as well as shortages of qualified personnel.

If our third party manufacturers cannot successfully manufacture material that conforms to our specifications and regulatory requirements and guidance, or if we or our third party manufacturers experience manufacturing, operations and/or quality issues, including an inability or unwillingness to continue manufacturing our products at all, in accordance with agreed-upon processes or on currently validated manufacturing lines, we may not be able to supply patient demand or maintain marketing approval for Auryxia or Vafseo, secure and maintain marketing approval for Vafseo, and we might be required to expend additional resources to obtain material from other manufacturers.

If our third party manufacturers cannot successfully manufacture material that conforms to our specifications and regulatory requirements and guidance, or if we or our third party manufacturers experience manufacturing, operations and/or quality issues, including an inability or unwillingness to continue manufacturing our products at all, in accordance with agreed-upon processes or on currently validated manufacturing lines, we may not be able to supply patient demand or maintain marketing approval for Auryxia or Vafseo, and we might be required to expend additional resources to obtain material from other manufacturers.

If any of these events occur, our reputation and financial condition would be negatively and materially impacted.

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

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

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results of operations, and may impact our ability to supply Auryxia or Vafseo for clinical and commercial use.

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

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A third party manufacturer or distributor may also encounter delays or operational issues brought on by sudden internal resource constraints, labor disputes, shifting priorities or shifting regulatory protocols.

Certain of these third party manufacturing facilities may be contractually prohibited from manufacturing Auryxia, Vafseo or

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our product candidates due to exclusivity provisions in agreements with our competitors.

Certain of these third party manufacturing facilities may be contractually prohibited from manufacturing Auryxia, Vafseo or our product candidates due to exclusivity provisions in agreements with our competitors.

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

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

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

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In addition, under the Panion License Agreement, we must pay royalties based on a mid-single digit percentage of net sales of product resulting from the licensed technologies, including Auryxia, and pay the patent filing, prosecution and maintenance costs related to the license.

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

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

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

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On April 17, 2019, we and Panion entered into an amendment and restatement of the Panion License Agreement, or the Panion Amended License Agreement , which reflects certain revisions consistent with the terms of the Panion Letter Agreement.

See Note 10, Commitments and Contingencies , to our consolidated financial statements in Part I, Item 1.

See Note 10, Commitments and Contingencies , to our unaudited condensed consolidated financial statements in Part I, Item 1.

Financial Statements of this Form 10-Q for additional information regarding the Panion Amended License Agreement.

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It is possible some of our contractual counterparties, including WuXi STA, could be impacted by this legislation, which, depending on the scope of the final legislation if enacted, could adversely affect our business.

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The biopharmaceutical industry in China is strictly regulated by the Chinese government.

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Risks Related to our Intellectual Property

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If we are unable to adequately protect our intellectual property, third parties may be able to use our intellectual property, which could adversely affect our ability to compete in the market.

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The laws of the European Patent Convention, for example, provide for post-grant opposition procedures that permit competitors to challenge, or oppose, our European patents administratively at the European Patent Office, or EPO .

We may become involved in addressing patentability objections based on third party submission of references, or we may become involved in defending our patent rights in oppositions, derivation proceedings, reexamination, inter partes review, post grant review, interference proceedings or other patent office proceedings or litigation, in the U.S.

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post grant review, interference proceedings or other patent office proceedings or litigation, in the U.S.

or elsewhere, challenging our patent rights or the patent rights of others.

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As a result of such challenges, we may lose exclusivity or freedom-to-operate or patent claims may be narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to prevent third parties from using or commercializing similar or identical products, or limit the duration of the patent protection for our products.

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Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent.

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Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage for our products and product candidates from the intellectual property that we develop or license.

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The intellectual property that we own or have licensed and related non-patent exclusivity relating to our current and future products is, and may be, limited, which could adversely affect our ability to compete in the market and adversely affect the value of Auryxia, Vafseo or other future products.

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If we are required to defend ourselves against claims or to protect our own proprietary rights against others, it could result in substantial costs to us and the distraction of our management.

An adverse ruling in any

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litigation or administrative proceeding could prevent us or our partners from marketing and selling Auryxia, Vafseo or other future products, increase the risk that a generic or other similar version of Auryxia, Vafseo or other future products could enter the market to compete with Auryxia, Vafseo or other future products, limit our or our partners' development and commercialization of Auryxia, Vafseo or other future products, or otherwise harm our competitive position and result in additional significant costs.

An adverse ruling in any litigation or administrative proceeding could prevent us or our partners from marketing and selling Auryxia, Vafseo or other future products, increase the risk that a generic or other similar version of Auryxia, Vafseo or other future products could enter the market to compete with Auryxia, Vafseo or other future products, limit our or our partners' development and commercialization of Auryxia, Vafseo or other future products, or otherwise harm our competitive position and result in additional significant costs.

Moreover, physicians may prescribe a competitive identical product for indications other than the one for which the product has been approved, or “off-label” indications, that are covered by the applicable patents.

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In addition to NCE, in the U.S., the FDA has the authority to grant additional regulatory exclusivity protection for approved drugs where the sponsor conducts specified testing in pediatric or adolescent populations.

If granted, this pediatric exclusivity may provide an additional six months which are added to the term of any non-patent exclusivity that has been awarded as well as to the regulatory protection related to the term of a relevant patent, to the extent these protections have not already expired.

If granted, this pediatric exclusivity may provide an additional six months which are added to the term of any non-patent exclusivity that has been awarded as

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well as to the regulatory protection related to the term of a relevant patent, to the extent these protections have not already expired.

In addition, foreign regulatory authorities may change their approval policies and new regulations may be enacted regarding non-patent exclusivity.

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The revisions may, however, have a significant impact on the pharmaceutical industry and our business in the long term.

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respective regulatory approval for such drugs so as to be eligible for any non-patent exclusivity protection.

We cannot assure you that Auryxia, Vafseo or any of our potential future products will obtain such pediatric exclusivity, NCE exclusivity or any other market exclusivity in the U.S., EU or any other territory, or that we will be the first to receive the respective regulatory approval for such drugs so as to be eligible for any non-patent exclusivity protection.

We also cannot assure you that Auryxia, Vafseo or any of our potential future products will obtain patent term extension.

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

However, there may be patents of third parties of which we are currently unaware with claims to compounds, materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates.

However, there may be patents of third parties of which we are currently unaware with claims to compounds, materials,

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formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates.

Also, because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe.

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Auryxia and Vafseo.

We attempt to ensure that our products and product candidates and the methods we employ to manufacture them, as well as the methods for their use which we intend to

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promote, do not infringe other parties’ patents and other proprietary rights.

We attempt to ensure that our products and product candidates and the methods we employ to manufacture them, as well as the methods for their use which we intend to promote, do not infringe other parties’ patents and other proprietary rights.

There can be no assurance they do not, however, and competitors or other parties may assert that we infringe their proprietary rights in any event.

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Interference proceedings provoked by third parties or brought by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications.

Various administrative proceedings are also available for challenging patents, including interference, reexamination, inter partes review, and post-grant review proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions.

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foreign jurisdictions.

Competitors may initiate an administrative proceeding challenging our issued patents or pending patent applications, which can be expensive and time-consuming to defend.

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For more information, see the other risk factors under “Risks Related to our Intellectual Property”.

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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation and some administrative proceedings, there is a risk that some of our confidential information could be compromised by disclosure during discovery.

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To that end, we must be able to hire, train, integrate, and retain additional qualified personnel with sufficient experience.

We may be unable to hire, train, retain or motivate these personnel on acceptable terms given the intense competition for our personnel from our competitors and other companies throughout our industry, particularly in our geographic region.

We may be unable to hire, train, retain or motivate these personnel on acceptable terms

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given the intense competition for our personnel from our competitors and other companies throughout our industry, particularly in our geographic region.

Over the last several years, the challenges in recruiting and retaining employees across the pharmaceutical and biotechnology industries have increased substantially due to current industry job market dynamics.

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Following receipt of the CRL we implemented a reduction in workforce in April and May 2022 by approximately 42% across all areas of our Company, including several members of management.

In November 2022, we also implemented a reduction of

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our workforce, by approximately 14% consisting of individuals within our commercial organization as a result of our decision to shift to a strategic account management focused model for our commercial efforts.

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

The reductions in workforce reflected our determination to refocus our strategic priorities around our commercial product, Auryxia, and our development portfolio, and were steps in a broader cost savings plan to significantly reduce our operating expense profile.

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For example, we recently transitioned to a new enterprise resource planning system and if we encounter any difficulties or issues with the new system it could affect our ability to close our books and complete our financial reporting in a timely manner.

We may not be able to implement these improvements in an efficient or timely manner and may discover deficiencies in existing systems, procedures and processes.

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may not be able to implement these improvements in an efficient or timely manner and may discover deficiencies in existing systems, procedures and processes.

Moreover, the systems, procedures and processes currently in place or to be implemented may not be adequate for any such growth.

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If any of our service providers are later legally deemed to be employees, we could be subject to employment and tax withholding liabilities and other additional costs as well as other multiple damages and attorneys’ fees.

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We have identified a material weakness in our internal control over financial reporting as of December 31, 2023 relating to our accounting for inventory and inventory related transactions.

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In addition, any testing by us, as and when required, conducted in connection with Section 404 of the Sarbanes-Oxley Act, or Section 404, or any testing by our independent registered public accounting firm may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement.

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, or the 2023 Form 10-K , we identified a material weakness in our internal control over financial reporting as of December 31, 2023.

As previously disclosed in our 2023 Form 10-K, we identified a material weakness in our internal control over financial reporting as of December 31, 2023.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

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In addition, our conclusion that we have a material weakness could give rise to increased scrutiny, review, audit and investigation over our accounting controls and procedures, which could then lead to additional areas of deficiency or errors in our financial statements.

We will need to continue to dedicate internal resources, engage outside consultants and maintain a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to remediate the material weakness relating to our accounting for inventory and inventory related transactions described above and any future control deficiencies or material weaknesses, and improve control processes as appropriate, validate through testing that controls are functioning as documented and maintain a continuous reporting and improvement process for internal control over financial reporting.

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If we are not able to correct material weaknesses or deficiencies in internal controls in a timely manner or otherwise comply with the requirements of Section 404 in a timely manner, our ability to record, process, summarize and report financial information accurately and within applicable time periods may be adversely affected, and we could be subject to sanctions or investigations by the SEC, the Nasdaq Stock Market or other regulatory authorities as well as stockholder litigation which, even if resolved in our favor, would require additional financial and management resources and could adversely affect the market price of our common stock.

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Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock and could also affect our ability to raise capital to fund future business initiatives.

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Security breaches and unauthorized use of our information technology systems and information, or the information technology systems or information in the possession of our collaborators and other third parties, could damage the integrity of our clinical trials, impact our regulatory filings, compromise our ability to protect our intellectual property, and subject us to regulatory actions that could result in significant fines or other penalties.

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

Additionally, outside parties may attempt to fraudulently induce employees, collaborators, or other contractors to disclose sensitive information or take other actions, including making fraudulent payments or downloading malware, by using “spoofing” and “phishing” emails or other types of attacks.

Additionally, outside parties may attempt to fraudulently

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induce employees, collaborators, or other contractors to disclose sensitive information or take other actions, including making fraudulent payments or downloading malware, by using “spoofing” and “phishing” emails or other types of attacks.

Our employees may be targeted by such fraudulent activities.

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Such attacks, whether successful or unsuccessful, or other compromises with respect to our information security and the measures we implement to prevent, detect and respond to them, could:

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• result in our incurring significant costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying damages or fines, or taking other remedial steps with respect to third parties;

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companies and their intermediaries, such as CROs or CMOs, from making improper payments to foreign government officials for the purpose of obtaining or keeping business or obtaining any kind of advantage for the company.

The FCPA also requires companies to keep accurate books and records and maintain adequate accounting controls.

The FCPA also requires companies to keep accurate books and

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records and maintain adequate accounting controls.

A number of past and recent FCPA investigations by the Department of Justice and the SEC have focused on the life sciences sector.

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The UK Bribery Act prohibits both the offering and accepting of a bribe and imposes strict liability on companies for failing to prevent bribery, unless the company can show that it had “adequate procedures” in place to prevent bribery.

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are also local anti-bribery and anti-corruption laws in countries where we have conducted clinical trials, and many of these also carry the risk of significant financial or criminal penalties.

There are also local anti-bribery and anti-corruption laws in countries where we have conducted clinical trials, and many of these also carry the risk of significant financial or criminal penalties.

We are also subject to trade control regulations and trade sanction laws that restrict the movement of certain goods, currency, products, materials, services and technology to, and certain operations in, various countries or with certain persons.

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Any potential future impairment of property and equipment, our right-of-use assets, goodwill or intangible asset may significantly impact our results of operations and financial condition.

As of June 30, 2024, we had approximately $77.1 million in the aggregate of goodwill and a definite lived intangible asset from the Merger, $2.9 million of property and equipment and $10.4 million right-of-use assets.

As of September 30, 2024, we had approximately $68.1 million in the aggregate of goodwill and a definite lived intangible asset from the Merger, $2.5 million of property and equipment and $9.3 million right-of-use assets.

In accordance with ASC 350, Goodwill and Other , we are required annually for goodwill, or more frequently upon certain indicators of impairment, to review our estimates and assumptions underlying the fair value of our goodwill and intangible asset.

In addition, under ASC 360, Property, Plant and Equipment , we are required to review our property and equipment and right-of-use assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

In addition, under ASC 360, Property, Plant and Equipment , we are required to review our property and equipment and right-of-use assets whenever

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events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Events giving rise to impairment of long-lived assets are an inherent risk in the pharmaceutical industry and often cannot be predicted.

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Financial Statements and Supplementary Data of this Form 10-Q.

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estimated useful life of the developed product rights for Auryxia, which could materially impact our financial position, certain of our material agreements, and our future operating results.

If these estimates, judgments and assumptions change in the future, including if Auryxia does not meet its current forecasted projections, additional impairment charges related to plant and equipment, right-of-use assets, goodwill or our intangible asset could be recorded in the future and additional corresponding adjustments may need to be made to the estimated useful life of the developed product rights for Auryxia, which could materially impact our financial position, certain of our material agreements, and our future operating results.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of Auryxia or Vafseo.

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Consequently, a product liability claim may result in losses that could be material to our business.

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

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Furthermore, if we cannot provide reliable financial reports or prevent fraud, including as a result of remote working by our employees, our business and results of operations would likely be materially and adversely affected.

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We cannot predict or estimate the amount of additional costs we may incur to continue to operate as a public company, nor can we predict the timing of such costs.

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Future changes in our stock ownership, many of which are outside of our control, could result in an additional ownership change under Section 382.

As a result, if we generate taxable income, our ability to use our pre-change NOL carryforwards to offset federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.

As a result, if we generate taxable income, our

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ability to use our pre-change NOL carryforwards to offset federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.

At the state level, state net operating losses generated in one state cannot be used to offset income generated in another state and there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

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Our Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

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claim against us arising pursuant to any provision of the DGCL our Charter or our Bylaws, or (iv) any other action asserting a claim against us, our directors, officers or other employees that is governed by the internal affairs doctrine.

Our Charter provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL our Charter or our Bylaws, or (iv) any other action asserting a claim against us, our directors, officers or other employees that is governed by the internal affairs doctrine.

Under our Charter, this exclusive forum provision will not apply to claims that are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware, or for which the Court of Chancery of the State of Delaware does not have subject matter jurisdiction.

For instance, the provision would not apply to actions arising under federal securities laws, including suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or the rules and regulations thereunder.

For instance, the provision would not apply to actions arising under federal securities laws, including suits brought to enforce any liability or duty created by the Exchange Act, or the rules and regulations thereunder.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our Charter described above.

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Alternatively, if a court were to find these provisions of our Charter inapplicable to, or unenforceable with respect to, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

We are currently subject to legal proceedings that could result in substantial costs and divert management's attention, and we could be subject to additional legal proceedings.

We are currently subject to an opposition proceeding in the Indian Patent Office as described in Part I, Item 3.

Legal Proceedings in our 2023 Form 10-K, filed with the Securities and Exchange Commission on March 14, 2024, and additional claims may arise in the future.

In addition, securities class action and derivative lawsuits and other legal proceedings are often brought against companies for any of the risks described in this Form 10-Q following a decline in the market price of their securities.

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

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

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

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

Risks Related to our Common Stock

Our stock price has been and may continue to be volatile, which could result in substantial losses for holders or future purchasers of our common stock and lawsuits against us and our officers and directors.

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

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

The daily closing market price for our common stock varied between a high price of $1.63 on April 1, 2024 and a low price of $0.86 on June 25, 2024 in the three-month period ending on June 30, 2024.

The daily closing market price for our common stock varied between a high price of $1.55 on August 26, 2024 and August 30, 2024 and a low price of $0.94 on July 5, 2024 in the three-month period ending on September 30, 2024.

During that time, the price of our common stock ranged from an intra-day low of $0.91 per share to an intra-day high of $1.58 per share.

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As a result of this volatility, our stockholders may not be able to sell their common stock at or above the price at which they purchased it.

In addition, companies that have experienced volatility in the market price of their stock have frequently been the subject of securities class action and shareholder derivative litigation.

In addition, securities class actions, shareholder derivative lawsuits and other legal proceedings are often brought against companies for any of the risks described in this Form 10-Q following a decline or volatility in the market price of their securities.

See Part I, Item 3.

Legal Proceedings of the 2023 Form 10-K for information concerning securities class action initiated against Keryx and certain current and former directors and officers of ours and Keryx’s.

We could be the target of other such litigation in the future.

Class action and shareholder derivative lawsuits, whether successful or not, could result in substantial costs, damage or settlement awards and a diversion of our management’s resources and attention from running our business, which could materially harm our reputation, financial condition and results of operations.

We could be the target of such litigation or other legal proceedings in the future.

Class actions, shareholder derivative lawsuits and other legal proceedings, whether successful or not, could result in substantial costs, damage or settlement awards and such costs and

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any related settlements or judgments may not be covered by insurance.

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

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

The issuance of additional shares of our common stock or the sale of shares of our common stock by any of our directors, officers or significant stockholders will dilute our stockholders’ ownership interest in Akebia and may cause the market price of our common stock to decline.

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

As of September 30, 2024, and based on the amounts reported in the most recent filing made by BlackRock under Section 13(g) of the Exchange Act, BlackRock beneficially owned approximately 7.2% of our outstanding shares of common stock.

By selling a large number of shares of common stock, BlackRock could cause the price of our common stock to decline.

The shares beneficially owned by CSL Vifor have not been registered pursuant to 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, but if they are registered in the future, those shares would become freely tradable and, if a large portion of such shares are sold, could cause the price of our common stock to decline.

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

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

In addition, we currently have on file with the SEC a shelf registration statement on Form S-3, which allows us to offer and sell up to $250.0 million in registered securities, such as common stock, preferred stock, debt securities, warrants and units, from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale, including a sales agreement prospectus that covers the offering, issuance and sale by us of up to a maximum aggregate offering price of up to $75.0 million of our common stock that may be issued and sold from time to time under a sales agreement with Jefferies LLC.

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

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

As of September 30, 2024, our executive officers, directors and principal stockholders, in the aggregate, beneficially owned shares representing a significant percentage of our capital stock.

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

For example, these persons could significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets.

This concentration of voting power could delay or prevent an acquisition of our Company on terms that other stockholders may desire.

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Provisions in our organizational documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.

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• require a supermajority vote of 85% of the holders of our capital stock entitled to vote to amend the classification of our Board of Directors and to amend certain other provisions of our Charter.

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These provisions, alone or together, could delay or prevent hostile takeovers, changes in control or changes in our management.

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Sales of Unregistered Securities

During the quarter ended June 30, 2024, we did not have any sales of unregistered securities.

During the quarter ended September 30, 2024, we did not have any sales of unregistered securities.

Defaults Upon Senior Securities.

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

What changed 10-Q

Item 1A. Risk Factors