Akebia Therapeutics, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the United States, or U.S. , Securities and Exchange Commission, or the SEC , on March 14, 2024, or the 2023 Form 10-K . In addition to historical information, the following discussion and analysis contains forward-looking statements that reflect our plans, estimates, beliefs and explanations that involve significant risks and uncertainties. As a result of many factors, such as those set forth under “Risk Factors” in Part II, Item 1A. of this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements. Business Overview We are a fully integrated commercial-stage biopharmaceutical company committed to addressing patients’ unmet needs. We have built a business focused on developing and commercializing innovative therapeutics that we believe serves as a foundation for future growth. Our purpose is to better the life of each person impacted by kidney disease, and we have established ourselves as a leader in the kidney community. We believe our demonstrated ability to deliver value broadly to the kidney community has enabled us to build a sustainable company. Upon this solid foundation and our continued commitment to patients, we believe focusing on all patients who can realize a meaningful benefit from our medicines, will result in delivering value for our stockholders. Our current portfolio includes: • Vafseo® (vadadustat) i s an oral hypoxia-inducible factor prolyl hydroxylase inhibitor, approved in 37 countries as a treatment for anemia due to chronic kidney disease, or CKD . On March 27, 2024, the U.S. Food and Drug Administration, or FDA , approved Vafseo (vadadustat) Tablets for the treatment of anemia due to CKD in adults who have been receiving dialysis for at least three months. We are launching Vafseo in the U.S. and expect product availability in January 2025. In October 2024, Centers for Medicare & Medicaid Services, or CMS, determined that Vafseo will be eligible for reimbursement under the Transitional Drug Add-on Payment Adjustment, or TDAPA , starting on January 1, 2025. W e also have several lifecycle management and label expansion opportunities currently under evaluation for Vafseo, including the potential for alternative dosing and label expansion for the treatment of adult patients not on dialysis. In May 2023, we entered into a license agreement granting MEDICE Arzneimittel Pütter GmbH & Co. KG, or Medice , the rights to market and sell Vafseo in the European Economic Area, or EEA , the United Kingdom, or UK , Switzerland and Australia, or the Medice Territory , where Vafseo is approved for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. Vafseo is currently marketed and sold by Medice in certain countries in the Medice Territory. We retain the rights to develop and commercialize Vafseo in Europe for other indications. 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 Mitsubishi Tanabe Pharma Corporation, or 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. MTPC plans to commercialize Vafseo in Taiwan. • Auryxia® (ferric citrate) is an orally administered medicine approved and marketed in the U.S. for two indications: (1) the control of serum phosphorus levels in adult patients with dialysis dependent chronic kidney disease, or DD-CKD , and (2) the treatment of iron deficiency anemia, or IDA , in adult patients with non-dialysis-dependent chronic kidney disease, or NDD-CKD . Today, we market Auryxia in the U.S. with our well-established, nephrology-focused commercial organization. Our Japanese sublicensee, Japan Tobacco, Inc., and its subsidiary, Torii Pharmaceutical Co., Ltd., collectively, JT and Torii , commercialize ferric citrate hydrate as Riona in Japan. Averoa SAS, or Averoa , has an exclusive license to develop and commercialize ferric citrate in the EEA, Turkey, Switzerland, UK, Turkey, Balkans and certain countries in eastern Europe and the Middle East. In April 2024, Averoa submitted its marketing authorization application, or MAA , for ferric citrate in Europe. • Our HIF-based pipeline assets are molecules being evaluated to target areas of unmet needs in acute care settings. The discovery of hypoxia-inducible factor, or HIF , laid the foundation to explore the central role of oxygen sensing in many diseases. As we have seen through the development of vadadustat as a treatment for anemia due to CKD, when stabilized, HIF triggers wide-ranging adaptive, protective responses during hypoxic or ischemic conditions. We have selected two additional HIF molecules for preclinical development: AKB-9090, for use in an acute care setting, potentially for acute kidney disease, or AKI , or acute respiratory distress syndrome, or ARDS , and AKB-10108 for retinopathy of prematurity, or ROP , in neonates. We continue to explore additional commercial and development opportunities to expand our pipeline and portfolio of novel therapeutics through both internal research and external innovation to leverage our fully integrated team. Akebia Therapeutics, Inc. | Form 10-Q | Page 26 Table of Contents Factors Affecting Our Performance and Results of Operations Financial Highlights Product revenue was $35.6 million and $107.8 million for the three and nine months ended September 30, 2024, respectively, and $40.1 million and $117.1 million for the three and nine months ended September 30, 2023, respectively. We have incurred net losses in each year since inception. Our net losses were $20.0 million and $46.6 million for the three and nine months ended September 30, 2024, respectively, and $14.5 million and $52.5 million for the three and nine months ended September 30, 2023, respectively. Substantially all of our net losses resulted from costs incurred in connection with the continued commercialization of Auryxia and development and commercialization efforts relating to Vafseo, including conducting clinical trials of, and seeking regulatory approval for, Vafseo, and providing general and administrative support for these operations and protecting our intellectual property. Financial Components Product Revenue We generate product revenue from commercial sales of Auryxia to a limited number of wholesale distributors as well as certain specialty pharmacy providers. Our net product revenue includes many variables, including judgments and estimates of discounts, rebates and product returns, which can fluctuate from quarter-to-quarter and year-over-year. We evaluate, at least annually and more frequently, if needed, the price of Auryxia, which will lose exclusivity, or LoE , in March 2025. We expect our product revenue to continue to be generated primarily from our commercial sales of Auryxia until Vafseo's U.S. market entry which is expected in January 2025. Due to the buying patterns of our customers, we tend to have seasonality from quarter to quarter. In general, our first quarter usually has lower revenues than the preceding fourth quarter, the second and third quarters have higher revenues than the first quarter, and the fourth quarter revenues are the highest in the year. While seasonality may affect quarterly comparisons within a fiscal year, it generally is not material to our annual consolidated financial results. However, absent further legislation or regulation, Auryxia will be included in the end-stage renal disease, or ESRD , bundle starting in January 2025, which we believe will impact the buying patterns of some of our existing customers in the fourth quarter of 2024 and lead to lower inventory levels at certain customers in the fourth quarter of 2024. In addition, based on these changes, and coupled with Auryxia's LoE in March 2025, the buying pattern of certain customers in future years may be different than their historical practices. 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 payors and providers to seek 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 compete with Auryxia. License, Collaboration and Other Revenue License, collaboration and other revenue includes revenue earned under our agreements with our partners, including license fees, royalty payments and revenue from product we supply. We expect to continue to generate revenue from our collaboration, license and supply agreements with Medice, MTPC, JT and Torii and any other collaborations into which we have entered or may enter. Cost of Goods Sold Cost of goods sold, or COGS - Cost of product and other revenue includes costs closely correlated or directly related to the costs to manufacture commercial drug substance and drug product for Auryxia, including at our contract manufacturing organizations, or CMOs , as well as indirect costs. Direct and indirect costs include fees for packaging, shipping, insurance and quality assurance, idle capacity charges, changes in reserves for excess inventory, write-offs for inventory that fails to meet specifications or is otherwise no longer suitable for commercial sale, including scrap, changes in our firm purchase commitment liability and royalties due to the licensor of Auryxia related to U.S. and Japan product sales recognized during the period. COGS also includes costs to manufacture drug product provided to MTPC and Medice for commercial sales of Vafseo in Japan and the Medice Territory, respectively, as well as personnel-related costs, including salaries and bonuses, employee benefits and stock-based compensation attributable to employees in particular functions and associated directly with the manufacturing of our commercial products. Akebia Therapeutics, Inc. | Form 10-Q | Page 27 Table of Contents Cost of product and other revenue for a newly launched product does not include the full cost of manufacturing until the initial pre-launch inventory is depleted and additional inventory is manufactured and sold. Until we received regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory, such as raw materials, drug substance and drug product conversion costs as research and development, or R&D , expense. Cost of goods sold - Amortization of intangible asset - In addition, COGS includes the amortization of development product rights for Auryxia through the end of 2024. Research and Development Expenses R&D expenses consist primarily of costs incurred for the development of Vafseo and costs associated with our pipeline which includes: • personnel-related expenses, including salaries, bonuses, employee benefits, stock-based compensation and travel expenses for employees engaged in R&D functions; • costs associated with feasibility and potential new manufacturing processes and methods for our commercial products; • regulatory registration and related fees for non-commercial products; • expenses incurred under agreements with contract research organizations, or CROs , and investigative sites that conduct our clinical trials; • the cost of acquiring, developing and manufacturing clinical trial materials through CMOs; • facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies associated with our laboratory space as well as our R&D team; • costs associated with discovery and development for preclinical, clinical and regulatory activities; and • costs associated with the pre-launch inventory build for Vafseo in the U.S. prior to the FDA approval in March 2024 and in Europe prior to the European Commission, or EC , approval in April 2023. R&D costs are expensed as incurred. Advance payments made for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses and other current assets. The prepaid amounts are expensed as the benefits are consumed. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites. We cannot determine with certainty the duration and completion costs of our R&D projects, the costs of related clinical development, or if, when, or to what extent we will generate revenue from the commercialization or sale of any of our product candidates. From inception through September 30, 2024, we have incurred $1.7 billion in R&D expenses. We expect to incur significant R&D expenditures for the foreseeable future as we continue the development of Auryxia, Vafseo and any other product or product candidate, including those that may be in-licensed or acquired. A significant portion of our R&D costs have been external costs, which we track on a program-by-program basis as well as costs related to possible new manufacturing processes and methods associated with our commercial product. These external costs include fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials and costs related to acquiring and manufacturing clinical trial materials, including costs paid to CMOs to manufacture clinical trial materials. We do not track our internal personnel and facilities costs on a program-by-program basis as our personnel are deployed across multiple R&D projects. Each of our products and product candidates has technical, clinical, regulatory, and commercial risk, including those discussed more fully under the heading “Risk Factors” in Part II, Item 1A of this Form 10-Q. A change in the outcome of any of the variables with respect to the development of Auryxia, Vafseo or any other product or product candidate could result in a significant change in the costs and timing associated with that development. Selling, General and Administrative Expenses Selling, general and administrative, or SG&A , expenses consist primarily of compensation for personnel, including stock-based compensation related to commercial, marketing, executive, finance and accounting, information technology, corporate and business development and human resource functions. Other SG&A expenses include costs for marketing initiatives for our commercial products, market research and analysis on our commercial product and potential product candidates, conferences and trade shows, travel expenses, professional services fees (including legal, patent, accounting, audit, tax, and Akebia Therapeutics, Inc. | Form 10-Q | Page 28 Table of Contents consulting fees), insurance costs, general corporate expenses and allocated facilities-related expenses, including rent and maintenance of facilities. License Expenses License expenses relates to royalties due to Panion & BF Biotech, Inc., or Panion , for sales of Auryxia in the U.S. and Riona in Japan. Other Income (Expense), Net Other income (expense), net consists primarily of interest income on our interest-bearing accounts, interest expense related to our term loans, accretion of the debt discount on our term loans as well as amortization of the discount on the liability related to the termination fees associated with the termination agreement with BioVectra Inc., or BioVectra , entered into in December 2022, or the BioVectra Termination Agreement . See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the BioVectra Termination Agreement. Other income (expense) also includes non-cash interest on our liability related to settlement royalties and the amortization of the discount and deferred gain related to our Working Capital Fund (as defined below) liability to Vifor (International) Ltd. (now a part of CSL Limited), or CSL Vifor. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the Company's arrangements with CSL Vifor. Change in Fair Value of Warrant Liability Change in fair value of warrant liability relates to the change in fair value of our warrant liability related to a warrant agreement with Kreos Capital VII Aggregator SCSp, an affiliate of Kreos Capital VII (UK) Limited , or Kreos. See Note 3, Fair Value of Financial Instruments , and Note 7, Indebtedness , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the warrant liability. Recent Events U.S. Approval and Reimbursement of Vafseo (vadadustat) In March 2024, we received approval from the FDA for Vafseo (vadadustat) Tablets for the treatment of anemia due to CKD in adults who have been receiving dialysis for at least three months. In June 2024, we applied to designate Vafseo for TDAPA reimbursement from CMS. In October 2024, CMS determined that Vafseo met the criteria for TDAPA in the anemia management ESRD prospective payment system functional category and, as a result, we will be eligible for reimbursement beginning on January 1, 2025. The TDAPA program provides at least two years of reimbursement for Vafseo in addition to the ESRD bundled rate to dialysis organizations. Additionally, we received a Level II Healthcare Common Procedure Coding System code for Vafseo which will be used by dialysis organizations for billing the product for Medicare enrollees. At-the-Market (ATM) Offering On September 3, 2024, in connection with the filing of a new shelf registration statement on Form S-3, we filed a prospectus related to our amended and restated sales agreement with Jefferies LLC (which amended and restated the prior sales agreement), pursuant to which we are able to offer and sell up to $75.0 million of our common stock at current market prices from time to time. During the three and nine months ended September 30, 2024, we sold 1,242,662 shares of our common stock under this program with gross proceeds of $1.7 million ($1.7 million, net of offering expenses). Including the amount sold during the nine months ended September 30, 2024 through the date of the filing of this form 10-Q, we sold 7,741,616 shares of our common stock under the sales agreement with gross proceeds of $11.6 million ($11.3 million, net of offering expenses). CSL Vifor Termination and Settlement Agreement On July 10, 2024, we and CSL Vifor entered into a Termination and Settlement Agreement, or the Vifor Termination Agreement . Pursuant to the Vifor Termination Agreement, we and CSL Vifor agreed, among other things, to terminate, effective immediately, the Second Amended and Restated License Agreement, dated February 18, 2022 and as amended May 3, 2024, or the Vifor License Agreement , pursuant to which we granted to 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 organizations, and to certain non-retail specialty pharmacies in the U.S. We and CSL Vifor agreed to terminate the Vifor License Agreement for business reasons. Akebia Therapeutics, Inc. | Form 10-Q | Page 29 Table of Contents See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the Vifor Termination Agreement. Borrowing Under BlackRock Term Loans and Repayment of Pharmakon Term Loans On January 29, 2024, we entered into a secured term loan facility with Kreos , which are funds and accounts managed by BlackRock Inc., collectively BlackRock , or the BlackRock Credit Agreement , that provides for an aggregate principal amount of up to $55.0 million made available under the following three tranches: (i) Tranche A — $37.0 million, drawn down on the closing date of the BlackRock Credit Agreement, of which we received $34.5 million, net of debt issuance costs, fees and expenses and was used to repay our senior secured term loans, or the Pharmakon Term Loans , with Pharmakon Advisors LP, or Pharmakon , of $35.0 million, (ii) Tranche B — $8.0 million, drawn down on April 19, 2024, of which we received $7.5 million, net of debt issuance costs, fees and expenses, and (iii) Tranche C — $10.0 million available in a single draw through December 31, 2024. Tranche C is only available subject to receipt of a certain amount of cumulative gross cash proceeds from the sale of common stock. On January 29, 2024, we also entered into a warrant agreement with Kreos Capital VII Aggregator SCSp, an affiliate of Kreos, pursuant to which we (i) issued a warrant to purchase 3,076,923 shares of our common stock, at an exercise price per share of $1.30 (subject to standard adjustments for stock splits, stock dividends, rights offerings and pro rata distributions), or the Exercise Price , and (ii) will issue at the time of drawdown of the Tranche C Loan, if applicable, a warrant to purchase 1,153,846 shares of our common stock, at the Exercise Price. Each warrant shall be exercisable for eight years from the date of issuance. On July 10, 2024, in connection with the Vifor Termination Agreement, we and Kreos entered into a First Amendment to the Agreement for the Provision of a Loan Facility, which amends certain provisions of the BlackRock Credit Agreement. See Note 7, Indebtedness, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. Impact of Inflation We are experiencing rising costs for certain inflation-sensitive operating expenses such as labor and certain service providers that are heavily dependent on labor. We do not believe these impacts were material to our net loss during the three and nine months ended September 30, 2024 or will be going forward. However, significant sustained inflation driven by the macroeconomic environment or other factors could negatively impact our margins, profitability and results of operations in future periods. Akebia Therapeutics, Inc. | Form 10-Q | Page 30 Table of Contents Results of Operations Comparison of the Three Months Ended September 30, 2024 and 2023 Three Months Ended September 30, Change (dollars in thousands) 2024 2023 $ % Revenues Product revenue, net $ 35,592 $ 40,118 $ (4,526) (11) % License, collaboration and other revenue 1,836 1,928 (92) (5) % Total revenues 37,428 42,046 (4,618) (11) % Cost of goods sold Cost of product and other revenue 5,150 8,998 (3,848) (43) % Amortization of intangible asset 9,011 9,011 — * Total cost of goods sold 14,161 18,009 (3,848) (21) % Operating expenses Research and development 8,487 13,330 (4,843) (36) % Selling, general and administrative 26,516 22,710 3,806 * License 769 864 (95) (11) % Restructuring — 169 (169) * Total operating expenses 35,772 37,073 (1,301) (4) % Loss from operations (12,505) (13,036) 531 (4) % Other expense, net (6,678) (1,453) (5,225) 360 % Change in fair value of warrant liability (856) — (856) * Net loss $ (20,039) $ (14,489) $ (5,550) 38 % *Percentage change not meaningful. Product Revenue, Net— Net product revenue is derived only from sales of Auryxia in the U.S. until Vafseo's U.S. market entry, which is expected in January 2025. We distribute Auryxia principally through a limited number of wholesale distributors as well as certain specialty pharmacy providers. Net product revenue was $35.6 million for the three months ended September 30, 2024, compared to $40.1 million for the three months ended September 30, 2023. The decrease was primarily due to a reduction in volume partially offset by price increases and execution of our contracting strategy with third-party payors. Auryxia will lose exclusivity in the U.S. in March 2025, which may have a negative impact on revenue. 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 third-party payors and providers to seek 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 compete with Auryxia. License, Collaboration and Other Revenue— License, collaboration and other revenue was $1.8 million for the three months ended September 30, 2024, compared to $1.9 million for the three months ended September 30, 2023. The decrease was primarily due to lower license revenue under our agreement with JT and Torii. Cost of Goods Sold—Cost of Product and Other Revenue— Cost of product and other revenue was $5.2 million for the three months ended September 30, 2024 compared to $9.0 million for the three months ended September 30, 2023. The decrease was primarily due to a $3.7 million benefit that we recorded during the three months ended September 30, 2024 due to our ability to commercially sell inventory previously written-down as excess inventory and lower year-over-year sales volume. Cost of Goods Sold—Amortization of Intangible Asset— Amortization of intangible asset relates to the acquired developed product rights for Auryxia, which is being amortized using a straight-line method over its estimated useful life of approximately six years. Amortization of intangible asset during each of the three months ended September 30, 2024 and 2023 was $9.0 million and will continue through the end of 2024. Akebia Therapeutics, Inc. | Form 10-Q | Page 31 Table of Contents R&D Expenses— R&D expenses were $8.5 million for the three months ended September 30, 2024, compared to $13.3 million for the three months ended September 30, 2023. The decrease was largely due to the completion of activities related to certain clinical trials, lower headcount related costs and decreased professional service and consulting expenses. Additionally, during the three months ended September 30, 2023, prior to receiving regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory as R&D expenses. The decrease in R&D expense was partially offset by increased costs related to the start-up of an outcomes study for Vafseo. The following table summarizes our external research and development expenses by program, as well as costs not allocated to programs, for the three months ended September 30, 2024 and 2023 (in thousands): Three Months Ended September 30, 2024 2023 Vafseo clinical trial and other external costs $ 3,046 $ 2,224 Vafseo pre-launch inventory — 73 External costs for other programs, including feasibility and new processes and methods associated with commercial product 1,462 2,769 Total external R&D expenses 4,508 5,066 Internal personnel, consulting, facilities and other 3,979 8,264 Total R&D expenses $ 8,487 $ 13,330 We expect to incur significant R&D expenses in future periods in support of ongoing or planned studies with respect to the development of our product candidates as well as Vafseo. Selling, General and Administrative Expenses— Selling, general and administrative expenses were $26.5 million for the three months ended September 30, 2024, compared to $22.7 million for the three months ended September 30, 2023. The increase was primarily due to higher headcount related costs and marketing costs in connection with the Vafseo launch expected in January 2025, as well as increased promotional expenses and registration and filing fees. License Expenses— License expenses related to royalties due to Panion relating to sales of Riona in Japan were $0.8 million and $0.9 million for the three months ended September 30, 2024 and 2023, respectively. Restructuring Expenses— There were no restructuring expenses and $0.2 million of restructuring expenses for the three months ended September 30, 2024 and 2023, respectively. Other Expense, Net— Other expense, net, was $6.7 million for the three months ended September 30, 2024, compared to $1.5 million for the three months ended September 30, 2023. The increase was primarily due to non-cash interest expense related to the settlement royalty liability in connection with the Vifor Termination Agreement. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. Change in Fair Value of Warrant Liability— Change in fair value of warrant liability was $0.9 million for the three months ended September 30, 2024. There was no change in fair value of warrant liability for the three months ended September 30, 2023 since the warrant agreement was entered into in January 2024. Akebia Therapeutics, Inc. | Form 10-Q | Page 32 Table of Contents Comparison of the Nine Months Ended September 30, 2024 and 2023 Nine Months Ended September 30, Change (dollars in thousands) 2024 2023 $ % Revenues Product revenue, net $ 107,810 $ 117,068 $ (9,258) (8) % License, collaboration and other revenue 5,873 21,359 (15,486) (73) % Total revenues 113,683 138,427 (24,744) (18) % Cost of goods sold Cost of product and other revenue 15,780 28,452 (12,672) (45) % Amortization of intangible asset 27,032 27,032 — — % Total cost of goods sold 42,812 55,484 (12,672) (23) % Operating expenses Research and development 25,866 53,214 (27,348) (51) % Selling, general and administrative 78,870 74,797 4,073 5 % License 2,242 2,381 (139) (6) % Restructuring 58 181 (123) (68) % Total operating expenses 107,036 130,573 (23,537) (18) % Operating loss (36,165) (47,630) 11,465 (24) % Other expense, net (11,269) (4,385) (6,884) 157 % Change in fair value of warrant liability 1,345 — 1,345 100 % Loss on extinguishment of debt (517) — (517) * Loss on termination of lease — (524) 524 * Net loss $ (46,606) $ (52,539) $ 5,933 (11) % *Percentage change not meaningful. Product Revenue, Net— Net product revenue is derived only from sales of Auryxia in the U.S. until Vafseo's U.S. market entry, which is expected in January 2025. We distribute Auryxia principally through a limited number of wholesale distributors as well as certain specialty pharmacy providers. Net product revenue was $107.8 million for the nine months ended September 30, 2024, compared to $117.1 million for the nine months ended September 30, 2023. The decrease was primarily due to a reduction in volume partially offset by price increases and execution of our contracting strategy with third-party payors. Auryxia will lose exclusivity in the U.S. in March 2025, which may have a negative impact on revenue. 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 third-party payors and providers to seek 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 compete with Auryxia. License, Collaboration and Other Revenue— License, collaboration and other revenue was $5.9 million for the nine months ended September 30, 2024, compared to $21.4 million for the nine months ended September 30, 2023. The decrease was primarily due to a one-time $10.0 million upfront payment recognized in connection with the Medice License Agreement during the nine months ended September 30, 2023 as well as a reduction in revenue under our supply agreement with MTPC as a result of the assignment of our supply agreement with Esteve Química, S.A. to MTPC in December 2022. We also recognized $2.2 million in revenue in connection with the Packaging Validation Transfer Agreement we entered into with Otsuka during the nine months ended September 30, 2023. Cost of Goods Sold—Cost of Product and Other Revenue— Cost of product and other revenue was $15.8 million for the nine months ended September 30, 2024 compared to $28.5 million for the nine months ended September 30, 2023. The decrease was primarily due to a $12.3 million benefit that we recorded during the nine months ended September 30, 2024 due to our Akebia Therapeutics, Inc. | Form 10-Q | Page 33 Table of Contents ability to commercially sell inventory previously written-down as excess inventory and lower year-over-year sales volume, which was partially offset by a $2.1 million charge related to our firm purchase commitment liability. See Note 10, Commitments and Contingencies , for further information on our firm purchase commitment liability. Cost of Goods Sold—Amortization of Intangible Asset— Amortization of intangible asset relates to the acquired developed product rights for Auryxia, which is being amortized using a straight-line method over its estimated useful life of approximately six years. Amortization of intangible asset during each of the nine months ended September 30, 2024 and 2023 was $27.0 million and will continue through the end of 2024. R&D Expenses— R&D expenses were $25.9 million for the nine months ended September 30, 2024, compared to $53.2 million for the three months ended September 30, 2023. The decrease was largely due to the completion of activities related to certain clinical trials, a reduction in consulting expenses associated with pursuing Vafseo regulatory approval in the Medice Territory in 2023, lower headcount related costs, including stock-based compensation, and decreased professional service expenses. Additionally, during the nine months ended September 30, 2023, prior to receiving regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory as R&D expenses. The following table summarizes our external research and development expenses by program, as well as costs not allocated to programs, for the three months ended September 30, 2024 and 2023 (in thousands): Nine Months Ended September 30, 2024 2023 Vafseo clinical trial and other external costs $ 6,337 $ 12,843 Vafseo pre-launch inventory — 3,311 External costs for other programs, including feasibility and new processes and methods associated with commercial product 4,252 8,668 Total external R&D expenses 10,589 24,822 Internal personnel, consulting, facilities and other 15,277 28,392 Total R&D expenses $ 25,866 $ 53,214 We expect to incur significant R&D expenses in future periods in support of ongoing or planned studies with respect to the development of our product candidates as well as Vafseo. Selling, General and Administrative Expenses— Selling, general and administrative expenses were $78.9 million for the nine months ended September 30, 2024, compared to $74.8 million for the nine months ended September 30, 2023. The increase was primarily due to higher headcount related costs and marketing costs in connection with the Vafseo launch expected in January 2025, as well as increased promotional expenses and registration and filing fees. License Expenses— License expenses related to royalties due to Panion relating to sales of Riona in Japan were $2.2 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively. Restructuring Expenses— Restructuring expenses were $0.1 million and $0.2 million for the nine months ended September 30, 2024 and 2023, respectively. Other Expense, Net— Other expense, net, was $11.3 million for the nine months ended September 30, 2024, compared to $4.4 million for the nine months ended September 30, 2023. The increase was primarily due to non-cash interest expense related to the settlement royalty liability in connection with the Vifor Termination Agreement and a decrease in sublease income due to the assignment of our lease for office space in Boston, Massachusetts, or the Boston Lease . See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. Change in Fair Value of Warrant Liability— Change in fair value of warrant liability was $1.3 million for the nine months ended September 30, 2024. There was no change in fair value of warrant liability for the nine months ended September 30, 2023 since the warrant agreement was entered into in January 2024. Loss on Extinguishment of Debt— During the nine months ended September 30, 2024, we recorded $0.5 million loss on the extinguishment of debt in connection with the repayment of the Pharmakon Term Loans. Loss on Lease Termination— On May 26, 2023 we incurred a loss on lease termination of $0.5 million in connection with the assignment of our Boston Lease. In accordance with ASC 842, Leases , we wrote off the right-of-use asset and lease liability Akebia Therapeutics, Inc. | Form 10-Q | Page 34 Table of Contents associated with the Boston Lease, and recognized the difference between the right-of-use asset and the lease liability offset by the $1.3 million payment we made to LG Chem Life Sciences Innovation Center, Inc. in connection with the assignment. Liquidity and Capital Resources As of September 30, 2024, we had cash and cash equivalents of $34.0 million and restricted cash of $1.7 million. To date, we have funded our operations principally through sales of our common stock, including through our employee stock purchase plan, product sales, payments received from our collaboration and licensing partners, borrowings under term loans, a working capital payment from CSL Vifor also referred to as a Working Capital Fund liability and a royalty transaction. From inception through September 30, 2024, we raised approximately $840.6 million of net proceeds from the sale of equity, including $519.8 million from various underwritten public offerings, $250.8 million from at-the-market offerings pursuant to our current sales agreement with Jefferies LLC and prior sales agreements with Jefferies LLC and Cantor Fitzgerald & Co., and $70.0 million from the sale of 7,571,429 shares of common stock to CSL Vifor. We have incurred recurring losses and negative cash flow from operations in each year since inception and anticipate net losses and negative operating cash flows for the near future. We incurred net operating losses of $20.0 million and $46.6 million during the three and nine months ended September 30, 2024, respectively, and $14.5 million and $52.5 million during the three and nine months ended September 30, 2023, respectively. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $1.7 billion and $1.6 billion, respectively. We currently have exclusive rights under a series of patents and patent applications to commercialize Auryxia in the U.S. that protect us from generic drug competition until March 2025. Following LoE in the U.S. in March 2025, we may not be able to realize enough product revenue from sales of Auryxia to realize net profits from product sales. While 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 payors and providers to seek to continue the use of Auryxia beyond LoE, Auryxia product sales have not generated, and may not generate, now or following LoE in the U.S., sufficient product revenue to realize net profits from product sales to cover our current or long-term operating costs. 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 compete with Auryxia. 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. However, if our operating performance deteriorates significantly from the levels expected in our operating plan, it would have an adverse effect on our liquidity and capital resources and could affect our ability to continue as a going concern in the future. In addition, we may also seek to sell additional private or public equity, enter into new debt transactions, explore potential strategic transactions or a combination of these approaches or other strategic alternatives. If we raise additional funds by issuing equity securities, our shareholders would experience dilution. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. Additional financing may not be available to us in amounts or on terms acceptable to us, if at all. If we are unable to raise additional capital in sufficient amounts when needed or on attractive terms, we may not be able to pursue development and commercial activities related to Auryxia and Vafseo, or any additional products and product candidates, including those that may be in-licensed or acquired. Any of these events could significantly harm our business, financial condition and prospects. There can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, or that our cash resources will fund our operating plan for the period of time anticipated by us, or that additional funding will be available on terms acceptable to us, or at all. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves numerous risks and uncertainties, and actual results could vary as a result of a number of factors, many of which are outside our control. We have based this estimate on assumptions that may be substantially different than actual results, and we could utilize our available capital resources sooner than we currently expect. Our future funding requirements, both near- and long-term, will depend on many factors including, but not limited to, those described under Part II, Item 1A. Risk Factors under the heading "Risks Related to our Financial Position, Need for Additional Capital and Growth Strategy." Contractual Obligations and Commitments Debt Agreements and Other Funding Arrangements BlackRock Term Loans On January 29, 2024, or the Closing Date , we entered into the BlackRock Credit Agreement, which provides for a senior secured term loan facility, in the aggregate principal amount of up to $55.0 million, or the Term Loan Facility . The Term Loan Facility is available in three tranches (i) Tranche A — $37.0 million was funded on the Closing Date and used to repay the Akebia Therapeutics, Inc. | Form 10-Q | Page 35 Table of Contents Pharmakon Term Loans; (ii) Tranche B — $8.0 million was funded on April 19, 2024, and (iii) Tranche C — $10.0 million is available in a single draw through December 31, 2024, collectively, the Term Loans . Tranche C is available subject to receipt of a certain amount of cumulative gross cash proceeds after the Closing Date in the form of equity or equity linked securities in one or more series of transactions. The Term Loan Facility matures on January 29, 2028, or the BlackRock Maturity Date . We are required to make interest-only payments until December 31, 2026 after which, we will begin making equal monthly principal payments. In the event of certain prespecified events, the repayment schedule will be accelerated. The Term Loan Facility will accrue interest at a floating annual rate equal to the sum of (i) term Secured Overnight Financing Rate, or SOFR , for a tenor of one month (subject to a floor of 4.25% per annum) plus (ii) a margin of 6.75% per annum (subject to an overall cap of 15.00% per annum on the all-in interest rate). During the continuance of any payment event of default the interest rate on such overdue sum will automatically increase by an additional 3.0% per annum, and may be subject to an additional late fee of 2.0% of such overdue sum. All obligations under the Term Loan Facility are secured by substantially all of our existing and after-acquired assets. The BlackRock Credit Agreement requires us to either (i) maintain cash and cash equivalents, measured as of the last day of each fiscal month, greater than or equal to $15.0 million or (ii) earn consolidated revenue, measured as of the last day of each fiscal month for the trailing twelve-month period, of $150.0 million. The BlackRock Credit Agreement contains certain representations and warranties, affirmative and negative covenants that limit our ability to engage in specified types of transactions and other provisions typical within a credit agreement. If an event of default occurs and is continuing under the BlackRock Credit Agreement, BlackRock is entitled to take enforcement action, including acceleration of amounts due which could limit our ability to make certain payments under the Vifor Termination Agreement. If we prepay the Term Loans prior to the BlackRock Maturity Date, we will be required to pay a prepayment fee ranging from 1.0% to 4.0% of the amount prepaid. On the Closing Date, Kreos Capital VII Aggregator SCSp, an affiliate of Kreos, or the Warrant Holder , received a warrant to purchase 3,076,923 shares of our common stock, at an exercise price per share of $1.30, and upon borrowing of Tranche C, we will become obligated to issue additional warrants to purchase 1,153,846 shares of our common stock at an exercise price per share of $1.30. Each warrant shall be exercisable for eight years from the date of issuance. In connection with the entry into the BlackRock Credit Agreement, on the Closing Date, we terminated the Pharmakon Loan Agreement, all obligations thereunder were paid in full and discharged and Pharmakon’s security interests in our assets and property were released. See Note 7, Indebtedness, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. On July 10, 2024, in connection with the Vifor Termination Agreement, we and Kreos entered into a First Amendment to the Agreement for the Provision of a Loan Facility, which amends certain provisions of the BlackRock Credit Agreement. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. Liability Related to Settlement Royalties Pursuant to the terms of the Vifor Termination Agreement, we will pay CSL Vifor decreasing quarterly tiered royalty payments ranging from a high single-digit percentage of our net sales of Vafseo up to $450.0 million to mid-single digit percentage of our net sales of Vafseo above $450.0 million, in each case, in the U.S. during a calendar year, or the Settlement Royalty Payments . The Settlement Royalty Payments will commence upon the first sale of Vafseo by us, its affiliates or third-party licensees to a third party for use in the U.S., and will continue until the later of the (i) expiration of the last-to-expire valid claim listed in the FDA Orange Book that would be infringed by the making, using, selling or importing of Vafseo in the U.S. or (ii) the expiration of marketing or regulatory exclusivity for Vafseo in the U.S., or the Settlement Royalty Term . Beginning on July 1, 2027 and throughout the Settlement Royalty Term, we have the option to make a one-time payment to CSL Vifor, or the Royalty Buy-Down Option, upon which the Settlement Royalty Payments will be adjusted as of the date of exercise of the Royalty Buy-Down Option such that we will then only pay CSL Vifor quarterly royalty payments based on a mid-single digit percentage of our net sales of Vafseo up to $450.0 million in the U.S. during a calendar year in lieu of the above Settlement Royalty Payments. If we exercise the Royalty Buy-Down Option, the WCF Royalty Payments will continue as described above. The WCF Royalty Payments, as described below, the Settlement Royalty Payments and the Royalty Buy-Down Option are in consideration for the termination of the Vifor License Agreement and all obligations thereunder, and the covenants and agreements set forth in the Vifor Termination Agreement, including the settlement and release of all disputes and claims arising from the Vifor License Agreement. As a result of the Vifor Termination Agreement, we concluded that CSL Vifor no longer met the definition of a customer and, therefore, the arrangement should not be considered a revenue contract with a customer under ASC 606, Revenue from Akebia Therapeutics, Inc. | Form 10-Q | Page 36 Table of Contents Contracts with Customers. We therefore determined that the $43.3 million received from Vifor in connection with the Vifor License Agreement and related investment agreement should be classified as debt and we are amortizing such amount using the effective interest method over the Settlement Royalty Term. The liability related to settlement royalties and the amortization are based on our current estimates of future royalties expected to be paid over the life of the arrangement. The annual effective interest rate as of September 30, 2024 was 41.0% which is reflected as interest expense in the unaudited condensed consolidated statements of operations and comprehensive loss. The Company recognized interest expense of $4.4 million for the three and nine months ended September 30, 2024. As of September 30, 2024, the $47.7 million liability related to settlement royalties is classified as a long-term liability based on the timing of payments. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information. Working Capital Fund Liability (Previously Referred to as Refund Liability to Customer) In February 2022, we amended our agreement with CSL Vifor and they contributed $40.0 million to a working capital fund, or the Working Capital Fund , established to partially fund our costs of purchasing Vafseo from our contract manufacturers. The Working Capital Fund is considered a debt arrangement with zero coupon interest and we impute interest on the Working Capital Fund liability at a rate of 15.0% per annum. As of September 30, 2024, the $40.2 million Working Capital Fund liability is classified as a long-term liability based on management’s estimated timing of the repayment of the Working Capital Fund liability to CSL Vifor exceeding one-year. Pursuant to the terms of the Vifor Termination Agreement, and generally consistent with the terms of the Vifor License Agreement, we agreed to repay the Working Capital Fund to CSL Vifor through quarterly tiered royalty payments ranging from 8% to 14% of our net sales of Vafseo in the U.S., or the WCF Royalty Payments . The WCF Royalty Payments will commence on July 1, 2025, and will continue until the earlier of (i) the cumulative total of the WCF Royalty Payments equals $40.0 million, or (ii) May 31, 2028, or the WCF Royalty Term . The WCF Royalty Payments are subject to certain minimum true-up milestones. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information. Liability Related to Sale of Future Royalties In February 2021, we sold to HealthCare Royalty Partners IV L.P., or HCR , our right to receive royalties and sales milestones for Vafseo in Japan and certain other Asian countries, such countries collectively, the MTPC Territory , such payments collectively the Royalty Interest Payments , in each case, payable to us under the MTPC Agreement. The Royalty Interest Payments are subject to an annual maximum “cap” of $13.0 million, after which we will receive 85% of the Royalty Interest Payments for the remainder of that year. The Royalty Interest Payments are also subject to an aggregate maximum “cap” of $150.0 million, after which the Royalty Interest Payments will revert back to us. We received $44.8 million from HCR, net of certain transaction expenses, which we recorded as a liability at the transaction date. We amortize the liability related to the sale of future royalties using the effective interest method over the life of the arrangement. The annual effective interest rate as of September 30, 2024 was 0%. We retain the right to receive all potential future regulatory milestones for Vafseo under the MTPC Agreement. We recorded $0.5 million and $1.4 million of non-cash royalty revenue during each of the three and nine months ended September 30, 2024 and 2023, respectively. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties , in the accompanying notes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information. Off-Balance Sheet Arrangements Letter of Credit As of September 30, 2024, in connection with the Cambridge Lease (as defined below), we had $1.7 million in a letter of credit outstanding. Director and Officer Indemnification We have entered into indemnification agreements with our directors and certain officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated financial statements. Akebia Therapeutics, Inc. | Form 10-Q | Page 37 Table of Contents Contractual Obligations and Commitments Other Than Debt Agreements We are party to contractual obligations involving commitments to make payments to third parties in the future. Certain contractual obligations are reflected on our condensed consolidated balance sheet as of September 30, 2024, while others are considered future obligations. Our material cash requirements as of September 30, 2024, include contractual obligations and commitments arising in the normal course of business, including leases, license agreements, manufacturing agreements and unconditional purchase commitments which are described in more detail below. Cambridge Lease We lease approximately 65,167 square feet of office, storage and laboratory space in Cambridge, Massachusetts under non-cancelable operating leases, collectively the Cambridge Lease . The office, storage and lab lease expires on September 11, 2026. See Note 9, Leases , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. License Agreements We have a license agreement with Panion, under which we are required to pay royalties related to the sale of Auryxia. The royalty payment obligations are contingent upon generating product revenue, and the amount and timing of such payments are not known. See Note 10, Commitments and Contingencies , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. In June 2021, we entered into a license agreement, or Cyclerion Agreement , with Cyclerion Therapeutics Inc. under which we obtained an exclusive global license under certain intellectual property rights to research, develop and commercialize praliciguat, an investigational oral soluble guanylate cyclase stimulator. We may be obligated to pay up to an aggregate of $222.0 million in specified development and regulatory milestone payments, certain specified commercial milestones and tiered royalties ranging from a low-single-digit to mid-double-digit percentage of net sales, on a product-by-product basis, and subject to reduction upon expiration of patent rights or the launch of a generic product in the territory. Unless earlier terminated, the Cyclerion Agreement will expire on a product-by-product and country-by-country basis upon the expiration of the last royalty term, which ends upon the longest of (i) the expiration of the patents licensed under the Cyclerion Agreement, (ii) the expiration of regulatory exclusivity for such product and (iii) ten years from first commercial sale of such product. We may terminate the Cyclerion Agreement in its entirety or only with respect to a particular licensed compound or product upon 180 days’ prior written notice to Cyclerion. The parties also have customary termination rights, subject to a cure period, in the event of the other party’s material breach of the Cyclerion Agreement or in the event of certain additional circumstances. Manufacturing Agreements We have various supply arrangements to which we are a party, and we are obligated to pay for drug substance and drug product for commercial use. Under one of our agreements, we are required to purchase a minimum quantity of Auryxia drug substance at a predetermined price. We are also obligated to purchase a certain percentage of the global demand for Vafseo drug substance and drug product based on certain quarterly and annual forecasts we provide to certain suppliers. Our supply agreements for Vafseo drug substance and drug product provide for a volume-based pricing structure. We may also be required to reimburse certain suppliers for reasonable expenses. See Note 10, Commitments and Contingencies , in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information. Amounts Due Under Former Manufacturing and Unconditional Purchase Commitments On December 22, 2022, we and BioVectra terminated any and all existing agreements for BioVectra to supply us Auryxia drug substance. Under the BioVectra Termination Agreement, we agreed to pay BioVectra a total of $32.5 million consisting of (i) an upfront payment of $17.5 million that was paid in December 2022 and (ii) six quarterly payments of $2.5 million which commenced in April 2024. In addition, we and BioVectra have released one another from all existing and future claims and liabilities and agreed to return certain materials and documents. Other Third Party Contracts Unconditional Purchase Commitments We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non- Akebia Therapeutics, Inc. | Form 10-Q | Page 38 Table of Contents cancellable obligations of service providers, up to the date of cancellation. In addition, we contract with various organizations to conduct R&D activities with remaining contract costs to us of approximately $47.0 million as of September 30, 2024. The scope of the services under these R&D contracts can be modified and the contracts cancelled by us upon written notice. In some instances, the contracts may be cancelled by the third party upon written notice. Cash Flows The following table provides a summary of cash flow data for each applicable period: Nine Months Ended September 30, NET CASH PROVIDED BY/(USED IN) ( in thousands ): 2024 2023 Operating activities $ (36,193) $ (21,076) Investing activities (31) — Financing activities 27,338 (23,916) Decrease in cash, cash equivalents and restricted cash $ (8,886) $ (44,992) Cash, cash equivalents and restricted cash — beginning of period 44,579 93,169 Cash, cash equivalents and restricted cash — end of period $ 35,693 $ 48,177 Operating Activities Net cash used in operating activities was $36.2 million for the nine months ended September 30, 2024. Net cash used in operating activities for the nine months ended September 30, 2024 consisted of a net loss of $46.6 million reduced by net non-cash adjustments of $46.9 million, including amortization of our intangible asset of $27.0 million, a change in excess inventory purchase commitments of $2.1 million and a change in fair value of the warrant liability of $1.3 million, offset by a reduction of $36.4 million in working capital. Net cash used in operating activities was $21.1 million for the nine months ended September 30, 2023. Net cash used in operating activities consisted of a net loss of $52.5 million reduced by net non-cash adjustments of $36.0 million, including amortization of our intangible asset of $27.0 million and a noncash write-off of $0.8 million related to the termination of our Boston Lease, offset by a reduction of $4.5 million in working capital. Investing Activities Net cash used in investing activities for the nine months ended September 30, 2024 was immaterial. No net cash was used in investing activities for the nine months ended September 30, 2023. Financing Activities Net cash provided by financing activities was $27.3 million for the nine months ended September 30, 2024, which primarily consisted of proceeds of $45.0 million from the issuance of debt under the BlackRock Credit Agreement and net proceeds of $20.4 million from the sale of common stock under our ATM facility partially offset by principal payments of debt of $37.1 million primarily related to the Pharmakon Term Loans which were repaid in January 2024. Net cash used in financing activities was $23.9 million for the nine months ended September 30, 2023, which primarily consisted of principal payments of debt related to the Pharmakon Term Loans. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2, Summary of Significant Accounting Policies , of the Notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Critical Accounting Estimates and Significant Judgments Our management’s discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities in our unaudited condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, other long-term liabilities, product revenues, including various rebates, returns and reserves related to product sales, inventories, classification of expenses between cost of goods sold, R&D and selling, general and administrative, long-term assets, including our right-of-use assets, intangible asset and goodwill. We base our estimates on historical experience, known trends and events, and various Akebia Therapeutics, Inc. | Form 10-Q | Page 39 Table of Contents other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies. During the nine months ended September 30, 2024, there were no material changes to our methodologies used for our critical accounting estimates as reported in our 2023 Form 10-K. Item 3. Quantitative and Qualitative Disclosures about Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide information under this item.