What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 183 added, 263 removed, 201 unchanged (69% of the section changed)

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Business Overview

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

We are a fully integrated biopharmaceutical company with two commercial products for patients impacted by kidney disease.

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 team has significant expertise in hypoxia-inducible factor, or HIF , science having developed and commercialized Vafseo® (vadadustat), an oral HIF factor prolyl hydroxylase, or HIF-PH , inhibitor and have selected two additional HIF-based molecules for preclinical development.

We have established the company as a leader in the kidney community, and we believe our cross-organizational expertise in renal disease positions the company for success.

Chronic kidney disease, or CKD , is a condition in which the kidneys are progressively damaged to the point that they cannot properly filter the blood circulating in the body.

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

CKD significantly impacts the U.S.

healthcare system, potentially affecting approximately 37 million patients and costing Medicare nearly $125 billion annually for treating Medicare beneficiaries with CKD or end-stage renal disease, or ESRD , according to the Centers for Disease Control and Prevention.

Our two commercial products address certain complications of kidney disease.

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.

Vafseo was approved by the U.S.

Food and Drug Administration, or the FDA , in March 2024 for the treatment of anemia due to CKD in adult patients on dialysis for at least three months.

Shipment of Vafseo commenced in January 2025.

We have commercial supply agreements for the purchase of Vafseo in place with dialysis organizations caring for nearly 100% of dialysis patients in the U.S.

The current U.S.

market opportunity for the treatment of anemia due to CKD in patients with dialysis is approximately $1 billion based on current ESA pricing and Vafseo is the only oral HIF-based treatment available in the U.S.

In the European Union, or EU , the United Kingdom, or UK , Switzerland and Australia, Vafseo is approved for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis.

Our partner MEDICE Arzneimittel Pütter GmbH & Co.

KG, or Medice , has an exclusive license to develop and commercialize Vafseo for the treatment of anemia in patients with CKD in defined territories and launched Vafseo in Germany, Austria, Switzerland, the Netherlands and certain other countries in Europe in 2024.

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.

In Taiwan, Vafseo is approved for the treatment of symptomatic anemia due to CKD in adult patients on chronic maintenance dialysis and launched in October 2024 by Tai Tien Pharmaceutical Company, an affiliate of MTPC.

In Korea, Vafseo is approved as an anemia treatment for patients with CKD on hemodialysis.

Auryxia® (ferric citrate) is an orally administered medicine approved and marketed in the U.S.

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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.

Auryxia became part of our portfolio in 2018 and has historically contributed meaningful revenue to the business.

In March 2025, Auryxia lost exclusivity, or LoE .

We believe the dynamics of Auryxia reimbursement being included in the ESRD bundle could result in a slower revenue decline after the LoE date than in other LoE situations, but the impact of LoE on future Auryxia revenues will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics and the pricing of generics and other products on the market that compete with Auryxia.

Ferric citrate hydrate has also been approved in Japan, and is marketed and sold by our Japanese sublicensee, Japan Tobacco, Inc., and its subsidiary, Torii Pharmaceutical Co., Ltd., collectively, JT and Torii , as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and for the treatment of

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adult patients with IDA under the trade name as Riona in Japan.

Averoa SAS, or Averoa , has an exclusive license to develop and commercialize ferric citrate in the European Economic Area, or EEA , Turkey, Switzerland, the UK, the Balkans and certain countries in Eastern Europe and the Middle East.

Averoa applied for marketing authorization for ferric citrate in Europe in April 2024.

In March 2025, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion recommending the European Commission, or EC , to approve Averoa’s marketing authorization.

The final EC decision is expected on June 1, 2025.

Our HIF-based product candidates and other pipeline assets are being evaluated to target areas of unmet needs.

The discovery of HIF laid the foundation to explore the central role of oxygen sensing in many diseases.

As we have seen through the development of Vafseo 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, potentially for cardiac surgery-related acute kidney injury, or CS-AKI , or acute respiratory distress syndrome, or ARDS , and AKB-10108 for retinopathy of prematurity, or ROP , in neonates.

In June 2021, we acquired from Cyclerion Therapeutics, Inc., or Cyclerion , an exclusive global license under certain intellectual property rights to research, develop and commercialize praliciguat, an investigational oral soluble guanylate cyclase, or sGC , stimulator.

We believe there is potential to explore the use of praliciguat for indications within kidney disease.

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.

We generate product revenue from commercial sales of Auryxia and Vafseo to a limited number of customers, including dialysis organizations, wholesale distributors, certain specialty pharmacy providers and our authorized generic distribution partner, Mylan Therapeutics, Inc., or AG Partner .

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.

We had exclusive rights under a series of patents and patent applications to commercialize Auryxia in the U.S.

that protected us from generic drug competition until March 20, 2025.

Following LoE, in March 2025, our AG Partner began to sell and distribute an authorized generic version of Auryxia in the U.S.

The impact of LoE on future Auryxia revenues will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics and the pricing of generics and other products on the market that compete with Auryxia.

In addition, we believe the dynamics of Auryxia reimbursement being included in the ESRD bundle and Auryxia LoE could result in the buying pattern of certain customers in future years being different than their historical practices.

License, Collaboration and Other Revenue

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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.

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, 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.

Cost of product and other revenue also includes costs to manufacture drug product provided to MTPC and Medice for commercial sales of Vafseo in Japan and in the EEA, the UK, Switzerland and Australia, or collectively the Medice Territory , respectively, as well as to our AG Partner.

In addition, cost of product and other revenue includes 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.

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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.

Cost of goods sold - Amortization of intangible asset - In addition, COGS included the amortization of development product rights for Auryxia through the end of 2024.

Research and Development Expenses

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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.

From inception through March 31, 2025, 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.

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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

Other SG&A expenses include costs for marketing initiatives for our commercial products, market research and analysis on our commercial products and potential product candidates, conferences and trade shows, travel expenses, professional services fees (including legal, patent, accounting, audit, tax, and

Akebia Therapeutics, Inc.

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(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

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Recent Events

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.

Public Offering of Common Stock

On March 19, 2025, we entered into an underwriting agreement, or the Underwriting Agreement , with Leerink Partners LLC and Piper Sandler & Co., as representatives of the several underwriters named therein, collectively, the Underwriters , relating to an underwritten public offering, or the Offering , of 25,000,000 shares, or the Shares , of our common stock.

The offering price was $2.00 per share, and the Underwriters agreed to purchase the Shares from us pursuant to the Underwriting Agreement at a price of $1.88 per share.

Under the terms of the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase up to 3,750,000 additional shares of common stock, or the Additional Shares , at the public offering price per share, and the Underwriters partially exercised their option and purchased 850,000 Additional Shares on April 22, 2025.

Net proceeds from the Offering of the Shares were $46.5 million, after deducting underwriting discounts and commissions and estimated offering expenses and net proceeds from the Offering of the Additional Shares were $1.6 million, after deducting underwriting discounts and commissions and estimated offering expenses.

Borrowing Under BlackRock Term Loans

On February 3, 2025, we and Kreos , which are funds and accounts managed by BlackRock Inc., collectively, BlackRock , entered into the Second Amendment to the Agreement for the Provision of a Loan Facility, or the Second Amendment , which amended certain provisions of the Agreement for the Provision of a Loan Facility, dated January 29, 2024, or the BlackRock Credit Agreement .

The BlackRock Credit Agreement provides for a senior secured term loan facility in the aggregate principal amount of up to $55.0 million, subject to certain customary conditions, or the Term Loan Facility .

The Term Loan Facility provided us access to three tranches:

(i) an initial tranche of $37.0 million, which was funded on January 29, 2024, (ii) an additional tranche of $8.0 million, which was funded on April 19, 2024, and (iii) a final tranche of $10.0 million, which was available in a single draw through an expiry date of December 31, 2024, or the Prior Tranche C Loan .

As a result of the Second Amendment, the Prior Tranche C Loan expiry date was extended until February 3, 2025, or the Extended Tranche C Loan .

The terms of the Extended Tranche C Loan are substantially similar to the terms of the Prior Tranche C Loan, however, interest will accrue on the Extended Tranche C Loan as if it was advanced on December 31, 2024.

On February 3, 2025, we received $9.3 million on the Extended Tranche C Loan, after deducting debt issuance costs, interest, fees and expenses.

On February 3, 2025, in connection with the drawdown of the Extended Tranche C Loan, in accordance with the warrant agreement, dated as of January 29, 2024, between the Company and Kreos Capital VII Aggregator SCSp, or the Warrant

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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.

Holder , we issued a warrant to the Warrant Holder to purchase 1,153,846 shares of our common stock, at an exercise price per share of $1.30.

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

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.

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At-the-Market (ATM) Offering

Since September 12, 2024 (the date our shelf registration statement on Form S-3 went effective) through December 31, 2024, we sold 14,271,631 shares of our common stock under this program with gross proceeds of $24.3 million ($23.8 million, net of offering expenses).

During the three months ended March 31, 2025, we sold 9,437,364 shares of our common stock under this program with gross proceeds of $18.7 million ($18.4 million, net of offering expenses).

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

Three Months Ended September 30, Change

Comparison of the Three Months Ended March 31, 2025 and 2024

Three Months Ended March 31,

(dollars in thousands) 2025 2024 $ %

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Total operating expenses 36,197 35,938 259 1 %

Loss from operations (12,505) (13,036) 531 (4) %

Income (loss) from operations 13,514 (14,936) 28,450 (190) %

Other expense, net (7,557) (2,403) (5,154) 214 %

Change in fair value of warrant liability 155 (129) 284 (220) %

Net loss $ (20,039) $ (14,489) $ (5,550) 38 %

Loss on extinguishment of debt — (517) 517 *

Net income (loss) $ 6,112 $ (17,985) $ 24,097 (134) %

*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.

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.

Product Revenue, Net— Net product revenue is derived from sales of Auryxia and Vafseo in the U.S.

We distribute Auryxia and Vafseo principally through a limited number of dialysis organizations, wholesale distributors, certain specialty pharmacy providers and our AG Partner.

Net product revenue was $55.8 million for the three months ended March 31, 2025, compared to $31.0 million for the three months ended March 31, 2024.

The increase was primarily due to Vafseo's entry to the market in January 2025 and an increase in sales volumes of Auryxia.

Auryxia lost exclusivity in the U.S.

in March 2025, which may have a negative impact on future Auryxia revenue.

We believe the dynamics of Auryxia reimbursement being included in the ESRD bundle could result in a slower revenue decline after the LoE date than in other LoE scenarios.

Additionally, in March 2025, our AG Partner began to sell and distribute an authorized generic version of Auryxia in the U.S., which may slightly offset a revenue decline following the LoE.

However, our ability to

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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,

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

The following table summarizes our product revenue by product for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

43,757 31,009

Total product revenues

$ 55,791 $ 31,009

(1) Vafseo entered the U.S.

market in January 2025.

(2) Includes the authorized generic version of Auryxia sold and distributed by our AG Partner during the three months ended March 31, 2025.

License, Collaboration and Other Revenue— License, collaboration and other revenue was $1.5 million for the three months ended March 31, 2025, compared to $1.6 million for the three months ended March 31, 2024.

Cost of Goods Sold—Cost of Product and Other Revenue— Cost of product and other revenue was $7.6 million for the three months ended March 31, 2025 compared to $2.6 million for the three months ended March 31, 2024.

The increase was primarily due to a $3.7 million benefit that we recorded during the three months ended March 31, 2024 due to our ability to sell inventory previously written-down as excess inventory and lower Auryxia volume during the three months ended March 31, 2024.

We began capitalizing our Vafseo costs in March 2024, in connection with the FDA's approval of Vafseo for the treatment of anemia due to CKD in adult patients on dialysis for at least three months.

Prior to the capitalization of Vafseo inventory costs, such costs were recorded as research and development expenses in the period incurred.

Cost of product and other revenue for Vafseo was $1.4 million for the three months ended March 31, 2025, comprised of manufacturing and overhead costs as the associated inventory costs such as raw materials, drug substance and drug product conversion costs were expensed previously.

If Vafseo inventory sold during the three months ended March 31, 2025 was valued at cost, our cost of product and other revenue would have been $1.9 million.

As of March 31, 2025, we had $27.6 million of reduced-cost Vafseo inventory.

We expect our cost of product and other revenue for Vafseo will increase, reflecting the full cost of manufacturing, subsequent to the utilization of our reduced-cost Vafseo inventory.

Cost of Goods Sold—Amortization of Intangible Asset— Amortization of intangible asset related to the acquired developed product rights for Auryxia, and was amortized using a straight-line method over its estimated useful life of approximately six years.

Our intangible asset was fully amortized as of December 31, 2024.

We recorded no amortization expense and $9.0 million in amortization expense for the three months ended March 31, 2025 and 2024, respectively, related to the developed product rights for Auryxia.

R&D Expenses— R&D expenses were $9.8 million for the three months ended March 31, 2025, compared to $9.7 million for the three months ended March 31, 2024.

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 March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Vafseo clinical trial and other external costs $ 3,030 $ 1,726

Vafseo pre-launch inventory — 73

External costs for other programs, including feasibility and new processes and methods associated with commercial product 1,470 1,527

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Total R&D expenses $ 9,754 $ 9,731

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.

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.

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Comparison of the Nine Months Ended September 30, 2024 and 2023

Nine Months Ended September 30, Change

(dollars in thousands) 2024 2023 $ %

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.

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

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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.

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.

Nine Months Ended September 30,

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.

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 .

Selling, General and Administrative Expenses— Selling, general and administrative expenses were $25.7 million for the three months ended March 31, 2025, compared to $25.4 million for the three months ended March 31, 2024.

License Expenses— License expenses related to royalties due to Panion relating to sales of Riona in Japan were $0.7 million for each of the three months ended March 31, 2025 and 2024.

Restructuring Expenses— There were no restructuring expenses and $0.1 million of restructuring expenses for the three months ended March 31, 2025 and 2024, respectively.

Other Expense, Net— Other expense, net, was $7.6 million for the three months ended March 31, 2025, compared to $2.4 million for the three months ended March 31, 2024.

The increase was primarily due to non-cash interest expense related to the settlement royalty liability in connection with the Vifor Termination Agreement.

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

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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.

Change in Fair Value of Warrant Liability— Change in fair value of warrant liability was $0.2 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively.

Loss on Extinguishment of Debt.

During the three months ended March 31, 2024, we recorded $0.5 million loss on the extinguishment of debt in connection with the repayment of the Pharmakon Term Loans.

We did not record any loss on the extinguishment of debt during the three months ended March 31, 2025.

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.

As of March 31, 2025, we had cash and cash equivalents of $113.4 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.

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.

From inception through March 31, 2025, we raised approximately $929.2 million of net proceeds from the sale of equity, including $567.9 million from various underwritten public offerings, $291.3 million from at-the-market offerings pursuant to our sales agreement with Jefferies LLC and prior sales agreements with Cantor Fitzgerald & Co., and $70.0 million from the sale of 7,571,429 shares of common stock to CSL Vifor.

We generated net operating income of $6.1 million and incurred net operating loss of $18.0 million during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $1.7 billion.

We had exclusive rights under a series of patents and patent applications to commercialize Auryxia in the U.S.

that protected us from generic drug competition until March 2025.

While we believe the dynamics of Auryxia reimbursement being included in the ESRD bundle could result in a slower revenue decline after the LoE date than in other LoE scenarios, the impact of LoE on future Auryxia revenues will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics and the pricing of generics and other products on the market that compete with Auryxia.

Additionally, in March 2025, our AG Partner began to sell and distribute an authorized generic version of Auryxia in the U.S., which may slightly offset the revenue decline following the LoE.

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 the foreseeable future, including to commercialize Vafseo and Auryxia, pursue label expansion for Vafseo, and advance our other existing programs.

However, if our operating performance deteriorates significantly from the levels expected in our long-term operating plan, it would have an adverse effect on our liquidity and capital resources and could affect our ability to achieve and maintain profitability or 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.

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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.

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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.

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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

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

(ii) Tranche B — $8.0 million was funded on April 19, 2024, and (iii) Tranche C — $10.0 million was funded on February 3, 2025, collectively, the Term Loans .

The Term Loan Facility matures on January 29, 2028, or the BlackRock Maturity Date .

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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.

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 the borrowing of Tranche C in February 2025, we issued additional warrants to purchase 1,153,846 shares of our common stock at an exercise price per share of $1.30.

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

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.

Liability Related to Settlement Royalties

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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.

The Settlement Royalty Payments commenced upon the first sale of Vafseo by us, our 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 OB 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 .

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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

If we exercise the Royalty Buy-Down Option, the WCF Royalty Payments will continue as described below.

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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.

We therefore determined that the $43.3 million received from Vifor in connection with the Vifor License Agreement and related investment agreements 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.

The annual effective interest rate as of March 31, 2025 was 41.0% which is reflected as interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

The Company recognized interest expense of $5.4 million for the three months ended March 31, 2025.

As of March 31, 2025, $10.6 million and $47.4 million of the settlement royalties liability is classified as a current and non-current liability, 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.

Working Capital Fund Liability (Previously Referred to as Refund Liability to Customer)

Working Capital Fund Liability

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 .

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The WCF Royalty Payments are subject to certain minimum true-up milestones.

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 March 31, 2025, $6.0 million and $34.4 million of the Working Capital Fund liability is classified as a current and non-current liability, respectively, based on management’s estimated timing of the repayment of the Working Capital Fund liability to 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 in Part I, Item 1 of this Form 10-Q for further information.

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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%.

The annual effective interest rate as of March 31, 2025 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.

We recorded $0.4 million of non-cash royalty revenue during each of the three months ended March 31, 2025 and 2024.

As of March 31, 2025, $2.0 million and $51.5 million of the liability related to the sale of future royalties is classified as a current and non-current liability, 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.

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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.

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As of March 31, 2025, in connection with the Cambridge Lease (as defined below), we had $1.7 million in a letter of credit outstanding.

Director and Officer Indemnification

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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.

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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.

Certain contractual obligations are reflected on our condensed consolidated balance sheet as of March 31, 2025, while others are considered future obligations.

Our material cash requirements as of March 31, 2025, 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.

The office, storage and lab lease expires on September 11, 2026, and we are currently marketing the furnished office space for sublease.

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

Panion License Agreement

We have a license agreement with Panion, under which we are required to pay royalties related to the sale of Auryxia.

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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.

Cyclerion Agreement

In June 2021, we entered into the Cyclerion Agreement with Cyclerion, as amended in December 2024, 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.

Under the Cyclerion Agreement, as amended, Cyclerion is eligible to receive up to an aggregate of $198.5 million from us in specified development and regulatory milestone payments on a product-by-product basis.

Cyclerion will also be eligible to receive specified commercial milestones as well as tiered royalties ranging from mid-single-digit percentage to twenty percent 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.

Manufacturing Agreements

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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.

Under the BioVectra Termination Agreement, we agreed to pay BioVectra a total of $32.5 million consisting of (i)

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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

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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-

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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.

Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-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 $42.2 million as of March 31, 2025.

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

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The following table provides a summary of cash flow data for each applicable period:

Nine Months Ended September 30,

Three Months Ended March 31,

NET CASH PROVIDED BY/(USED IN) ( in thousands ):

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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.

Net cash used in operating activities was $13.6 million for the three months ended March 31, 2025.

Net cash used in operating activities for the three months ended March 31, 2025 consisted of a net income of $6.1 million reduced by net non-cash adjustments of $10.0 million, including a change in fair value of the warrant liability of $0.2 million, offset by a reduction of $29.7 million in working capital.

Net cash used in operating activities was $19.4 million for the three months ended March 31, 2024.

Net cash used in operating activities consisted of a net loss of $18.0 million and net non-cash adjustments of $13.7 million, including amortization of our intangible asset of $9.0 million, and a reduction of $15.1 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.

Net cash provided by investing activities for the three months ended March 31, 2025 of $0.2 million primarily consisted of proceeds from the sale of property and equipment.

No net cash was used in investing activities for the three months ended March 31, 2024.

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.

Net cash provided by financing activities was $74.9 million for the three months ended March 31, 2025, which primarily consisted of proceeds of $10.0 million from the issuance of debt under the BlackRock Credit Agreement and net proceeds of $64.9 million from the sale of common stock from our March 2025 underwritten public offering and under our ATM facility.

Net cash provided by financing activities was $18.5 million for the three months ended March 31, 2024, which primarily consisted of proceeds of $37.0 million from the issuance of debt under the BlackRock Credit Agreement and net proceeds of $18.7 million from the sale of common stock under our ATM Facility partially offset by principal payments of debt of $36.7 million primarily related to the Pharmakon Term Loans which were repaid in January 2024.

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.

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Critical Accounting Estimates and Significant Judgments

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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

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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.

On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, other long-term liabilities, a liability related to settlement royalties, 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 and goodwill.

We base our estimates on historical experience, known trends and events, and various 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.

During the three months ended March 31, 2025, there were no material changes to our methodologies used for our critical accounting estimates as reported in our 2024 Form 10-K.

Quantitative and Qualitative Disclosures about Market Risk.

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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 2. Management’s Discussion and Analysis