ARDELYX, INC. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ARDELYX, INC. INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID : 42 ) 70 Balance Sheets 72 Statements of Operations and Comprehensive Loss 73 Statements of Stockholders’ Equity 74 Statements of Cash Flows 75 Notes to Financial Statements 76 69 Table of Co n t e n t s Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Ardelyx, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Ardelyx, Inc. (the “Company”) as of December 31, 2025 and 2024, the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 19, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 70 Table of Co n t e n t s Description of the Matter Estimates of Reserves for Variable Consideration Impacted by Estimated Payor Mix As described in Note 2 and 6 to the financial statements, the transaction price for product sales, net is reduced for estimates of variable consideration related to gross-to-net (“GTN”) adjustments for discounts and chargebacks, rebates, wholesaler and group purchasing organization (“GPO”) fees, copay assistance and returns. Except for certain wholesaler and GPO fees and discounts, which are based on contracts, these adjustments involve estimation and judgment. The GTN adjustments for rebates, copay assistance and chargebacks are impacted by the Company’s estimate of payor mix, which requires significant judgment. The Company’s total estimate of reserves for variable consideration was $45.4 million as of December 31, 2025. During 2025, the Company recorded $163.6 million in total reductions to gross product sales for variable consideration. Auditing the Company’s estimates of reserves for variable consideration relating to rebates, copay assistance and chargebacks was especially challenging as it involved evaluation of management’s subjective judgments with respect to payor mix that considers various data sources. The Company has a limited history upon which to base its assumptions, and changes in these assumptions could have a material impact on the reserves recorded for variable consideration. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s process to determine the reserves for variable consideration that are impacted by the payor mix. For example, we tested controls over management’s review of the completeness and accuracy of the data used to determine the estimate. To test the Company’s estimates of reserves for variable consideration relating to rebates, copay assistance and chargebacks, our audit procedures included, among others, evaluating the methodologies and assumptions used and testing the accuracy and completeness of the underlying data used in the Company’s payor mix analysis and the related reserves. We compared the assumptions used by management to third-party industry data and evaluated trends in the data. We also evaluated the reasonableness of changes in estimated reserves during the year and assessed the accuracy of the Company’s estimates against actual results. We also performed sensitivity analyses to determine the effect of changes in management’s payor mix assumptions on the reserves recorded for variable consideration impacted by the payor mix. Further, we evaluated the appropriateness of classification and disclosure of the Company’s reserves for variable consideration in the financial statements. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2009. Boston, Massachusetts February 19, 2026 71 Table of Co n t e n t s ARDELYX, INC. BALANCE SHEETS (in thousands, except share and per share amounts) December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 67,999 $ 64,932 Short-term investments 196,690 185,168 Accounts receivable 71,848 57,705 Inventory 17,735 21,173 Prepaid commercial manufacturing 14,479 16,378 Prepaid expenses and other current assets 13,566 11,096 Total current assets 382,317 356,452 Property and equipment, net 2,184 1,495 Inventory, non-current 105,372 70,011 Right-of-use assets 4,795 2,380 Other assets 6,936 5,416 Total assets $ 501,604 $ 435,754 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 19,235 $ 16,000 Accrued compensation and benefits 19,108 14,940 Current portion of operating lease liability 1,479 1,562 Deferred revenue 1,206 10,686 Accrued expenses and other current liabilities 47,577 34,642 Total current liabilities 88,605 77,830 Operating lease liability, net of current portion 3,641 1,023 Long-term debt 202,834 150,853 Deferred revenue, non-current 13,699 7,232 Deferred royalty obligation related to the sale of future royalties 25,876 25,527 Total liabilities 334,655 262,465 Commitments and contingencies (Note 19) Stockholders’ equity Common stock, $ 0.0001 par value per share; 500,000,000 shares authorized; 244,351,501 and 238,015,825 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 24 24 Additional paid-in capital 1,113,666 1,058,548 Accumulated deficit ( 946,939 ) ( 885,340 ) Accumulated other comprehensive income 198 57 Total stockholders’ equity 166,949 173,289 Total liabilities and stockholders’ equity $ 501,604 $ 435,754 The accompanying notes are an integral part of these financial statements. 72 Table of Co n t e n t s ARDELYX, INC. STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share amounts) Year Ended December 31, 2025 2024 2023 Revenues Product sales, net $ 377,808 $ 319,196 $ 82,526 Product supply revenue 15,879 11,649 6,121 Licensing revenue 5,088 78 35,809 Non-cash royalty revenue related to the sale of future royalties 8,545 2,692 — Total revenues 407,320 333,615 124,456 Costs and operating expenses Cost of sales 39,537 50,556 17,795 Research and development 71,527 52,317 35,536 Selling, general and administrative 337,233 258,692 134,401 Total costs and operating expenses 448,297 361,565 187,732 Loss from operations ( 40,977 ) ( 27,950 ) ( 63,276 ) Interest expense ( 20,102 ) ( 13,006 ) ( 4,950 ) Non-cash interest expense related to the sale of future royalties ( 8,296 ) ( 7,088 ) ( 3,924 ) Other income, net 8,745 9,174 6,630 Loss before provision for income taxes ( 60,630 ) ( 38,870 ) ( 65,520 ) Provision for income taxes 969 266 547 Net loss $ ( 61,599 ) $ ( 39,136 ) $ ( 66,067 ) Net loss per share of common stock - basic and diluted $ ( 0.26 ) $ ( 0.17 ) $ ( 0.30 ) Shares used in computing net loss per share - basic and diluted 241,033,750 235,232,927 219,331,253 Comprehensive loss Net loss $ ( 61,599 ) $ ( 39,136 ) $ ( 66,067 ) Unrealized gains (losses) on available-for-sale securities 141 ( 167 ) 278 Comprehensive loss $ ( 61,458 ) $ ( 39,303 ) $ ( 65,789 ) The accompanying notes are an integral part of these financial statements. 73 Table of Co n t e n t s ARDELYX, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands, except share amounts) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Total Stockholder’ Equity Shares Amount Balance as of December 31, 2022 198,575,016 $ 20 $ 878,500 $ ( 780,137 ) $ ( 54 ) $ 98,329 Issuance of common stock under employee stock purchase plan 435,708 — 808 — — 808 Issuance of common stock for services 86,095 — 337 — — 337 Issuance of common stock upon exercise of options 225,988 — 365 — — 365 Issuance of common stock upon vesting of restricted stock units 855,642 — — — — — Issuance of common stock in at-the-market offering 32,274,741 3 119,233 — — 119,236 Stock-based compensation — — 13,530 — — 13,530 Unrealized gains on available-for-sale securities — — — — 278 278 Net loss — — — ( 66,067 ) — ( 66,067 ) Balance as of December 31, 2023 232,453,190 $ 23 $ 1,012,773 $ ( 846,204 ) $ 224 $ 166,816 Issuance of common stock under employee stock purchase plan 479,609 — 2,227 — — 2,227 Issuance of common stock for services 40,549 — 257 — — 257 Issuance of common stock upon exercise of options 2,654,370 1 5,910 — — 5,911 Issuance of common stock upon vesting of restricted stock units 2,388,107 — — — — — Stock-based compensation — — 37,381 — — 37,381 Unrealized losses on available-for-sale securities — — — — ( 167 ) ( 167 ) Net loss — — — ( 39,136 ) — ( 39,136 ) Balance as of December 31, 2024 238,015,825 $ 24 $ 1,058,548 $ ( 885,340 ) $ 57 $ 173,289 Issuance of common stock under employee stock purchase plan 385,593 — 1,718 — — 1,718 Issuance of common stock for services 87,256 — 315 — — 315 Issuance of common stock upon exercise of options 1,880,472 — 4,123 — — 4,123 Issuance of common stock upon vesting of restricted stock units 3,982,355 — — — — — Stock-based compensation — — 48,962 — — 48,962 Unrealized gains on available-for-sale securities — — — — 141 141 Net loss — — — ( 61,599 ) — ( 61,599 ) Balance as of December 31, 2025 244,351,501 $ 24 $ 1,113,666 $ ( 946,939 ) $ 198 $ 166,949 The accompanying notes are an integral part of these financial statements. 74 Table of Co n t e n t s ARDELYX, INC. STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Operating activities Net loss $ ( 61,599 ) $ ( 39,136 ) $ ( 66,067 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization expense 3,059 2,063 1,292 Non-cash lease expense 1,947 4,008 3,624 Stock-based compensation 48,962 37,381 13,530 Non-cash interest expense 8,958 7,400 4,220 Non-cash royalty revenue related to the sale of future royalties ( 8,545 ) ( 2,692 ) — Other, net ( 3,913 ) ( 4,664 ) ( 2,930 ) Changes in operating assets and liabilities Accounts receivable ( 14,143 ) ( 35,674 ) ( 14,298 ) Inventory ( 31,923 ) ( 41,697 ) ( 21,141 ) Prepaid commercial manufacturing 1,899 6,782 ( 9,593 ) Prepaid expenses and other assets ( 4,293 ) ( 4,543 ) ( 6,035 ) Accounts payable 3,235 4,862 279 Accrued compensation and benefits 4,168 2,343 5,049 Operating lease liabilities ( 1,827 ) ( 4,588 ) ( 3,928 ) Accrued and other liabilities 14,545 21,254 3,691 Deferred revenue ( 3,013 ) 2,092 2,590 Net cash used in operating activities ( 42,483 ) ( 44,809 ) ( 89,717 ) Investing activities Proceeds from maturities and redemptions of investments 211,456 177,854 84,321 Purchases of investments ( 218,923 ) ( 195,161 ) ( 215,225 ) Purchases of property and equipment ( 1,492 ) ( 1,011 ) ( 344 ) Net cash used in investing activities ( 8,959 ) ( 18,318 ) ( 131,248 ) Financing activities Proceeds from issuance of common stock in at the market offering, net of issuance costs — — 119,236 Proceeds from 2022 Loan Agreement, net of costs 48,668 99,451 22,386 Proceeds from the sale of future royalties, net of issuance costs — — 5,000 Proceeds from issuance of common stock under equity incentive plans 5,841 8,138 1,173 Payments of the previously outstanding exit fees — ( 1,000 ) ( 1,500 ) Net cash provided by financing activities 54,509 106,589 146,295 Net increase (decrease) in cash and cash equivalents 3,067 43,462 ( 74,670 ) Cash and cash equivalents at beginning of period 64,932 21,470 96,140 Cash and cash equivalents at end of period $ 67,999 $ 64,932 $ 21,470 Supplementary disclosure of cash flow information Cash paid for interest $ 15,717 $ 11,408 $ 4,240 Cash paid for income taxes $ 485 $ 266 $ 51 Supplementary disclosure of non-cash activities Right-of-use assets obtained in exchange for lease obligations $ 4,362 $ 1,010 $ 339 Issuance of common stock for services $ 315 $ 257 $ 337 The accompanying notes are an integral part of these financial statements. 75 Table of Co n t e n t s ARDELYX, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1. NATURE OF OPERATIONS We are a commercial-stage biopharmaceutical company focused on the development and commercialization of innovative medicines that meet significant unmet medical needs. We currently market two therapies from the active ingredient tenapanor, an NHE3 inhibitor that was discovered and developed by Ardelyx. NHE3 is an antiporter expressed on the apical surface of the small and large intestines. Tenapanor is a minimally absorbed, first-in-class, oral, small molecule therapy. Tenapanor, branded as IBSRELA ® , is approved in the U.S. for the treatment of adults with irritable bowel syndrome with constipation. We believe that IBSRELA can bring meaningful benefit to the approximately 13 million Americans who suffer from the symptoms of IBS-C, many of whom continue to experience symptoms despite intervention with other therapies. We are seeking to further expand the IBSRELA eligible patient population to include patients with CIC, and have initiated a Phase 3 clinical trial evaluating tenapanor in adult CIC patients. Tenapanor, branded as XPHOZAH ® , is approved in the U.S. to reduce serum phosphorus in adults with chronic kidney disease on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy. We believe XPHOZAH can bring meaningful relief to adult chronic kidney disease patients on dialysis, the vast majority of whom have elevated levels of serum phosphorus and are unable to achieve target serum phosphorus levels with phosphate binders alone. Continually elevated levels of serum phosphorus can result in severe cardiovascular health complications. In addition to commercializing IBSRELA and XPHOZAH, we are also developing a next-generation NHE3 inhibitor that we believe can have application across multiple therapeutic areas. We operate in one business segment, which is the development and commercialization of biopharmaceutical products. Refer to Note 17. Segment Reporting for further segment reporting information. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements have been prepared in accordance with U.S. GAAP. Certain prior year amounts have been reclassified to conform to the current year presentation on the statements of operations and comprehensive loss to include the “cost of product sales” and the “other cost of revenue” captions within the “cost of sales” caption. This reclassification had no effect on the previously reported results of operations. Prior to the end of the 2025 second quarter, the “other cost of revenue” caption was primarily comprised of royalty expenses recognized under the AstraZeneca Termination Agreement. As of the end of the 2025 second quarter, the maximum $ 75.0 million royalty obligation under this agreement had been fully recognized. Refer to the Summary of Abbreviated Terms at the end of this Annual Report on Form 10-K for definitions of terms used throughout the document. Use of Estimates The preparation of financial statements requires management to make estimates, judgments and assumptions. Significant estimates include those used in our revenue gross-to-net adjustments and other estimates. Management bases its estimates on historical experience and on various relevant assumptions that management believes to be reasonable under the circumstances. Actual results could materially differ from those estimates. Cash Equivalents Cash equivalents consist of highly liquid investments purchased with an original maturity date of 90 days or less and are recognized at cost, which approximates fair value. 76 Table of Co n t e n t s Short-Term Investments Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than one year, from the date of acquisition. Short-term investments are carried at fair value based upon quoted market prices or other observable market data. Unrealized gains (losses) on available-for-sale securities are included in accumulated other comprehensive income on our balance sheets. The cost of available-for-sale securities sold is based on the specific-identification method. Marketable debt securities are reviewed for impairment by determining whether the decline in their market value below carrying value is other-than-temporary. This assessment considers the intent and ability to retain the investment for a period of time sufficient for an anticipated recovery in market value; the duration and extent that the market value has been below cost; and the investee’s financial condition. Other-than-temporary impairments and credit losses are recorded in the statements of operations and comprehensive loss. Concentration of Credit Risk Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. We are exposed to credit risks in the event of default by the counterparties to the extent of the amount recorded in our balance sheets. Cash, cash equivalents and short-term investments are invested through banks and other financial institutions in the U.S. Foreign Currency Our business is conducted in U.S. dollars; however, a portion of our expense and capital activities are transacted in foreign currencies which are subject to exchange rate fluctuations that can affect cash or earnings. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. All gains and losses on these foreign currency transactions are recorded as other income, net on our statements of operations and comprehensive loss. Property and Equipment Expenditures for property and equipment are capitalized at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging from three to five years for laboratory equipment and office equipment and furniture. Leasehold improvements are amortized over the lesser of the estimated useful lives or the related remaining lease term. Impairment of Long-Lived Assets The carrying values of long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future undiscounted cash flows, expected to result from the use of the asset and its eventual disposition, is less than the asset’s carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value. Income Taxes The asset and liability method of accounting is used for income taxes. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to be reversed. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. Accounts Receivable Accounts receivable are stated at amortized cost less allowance for credit losses. An allowance for credit losses reflects our best estimate of future credit losses over the contractual life of outstanding accounts receivable under the assumption that the current conditions as of the balance sheet date do not change for the remaining life of the asset. An allowance for credit losses is determined based on various factors, such as historical experience, specific allowances for known troubled accounts, customers’ financial condition and both current and forecasted economic conditions. To date, we have determined that an allowance for doubtful accounts is not required. As of December 31, 2025, our accounts receivable balance was comprised of $ 66.4 million from commercial customers and $ 5.4 million from our collaboration partners. As of December 31, 2024, our accounts 77 Table of Co n t e n t s receivable balance was comprised of $ 56.7 million from commercial customers and $ 1.0 million from our collaboration partners. Inventory Inventory costs incurred are capitalized after regulatory approval, or if based on management’s judgment, future commercialization is considered probable and future economic benefit is expected to be realized. We began to capitalize inventory costs associated with IBSRELA during the 2021 fourth quarter, when our intent to commercialize IBSRELA was established and we commenced preparation for the launch of IBSRELA. We began to capitalize inventory costs associated with XPHOZAH during the 2023 fourth quarter, following approval by the FDA to market XPHOZAH in the U.S. Inventory costs incurred prior to regulatory approval were expensed as research and development. Inventories are stated at the lower of cost or estimated net realizable value with cost determined under the specific identification method. A portion of inventory that represents product that is not expected to be sold or used within the next 12 months is classified as non-current assets in our balance sheets. Revenue Recognition The application of ASC 606 Revenue from Contracts with Customers substantially impacts our reported results, particularly product sales, net, which requires certain estimates in determining the transaction price. Total revenues are recognized following a five-step model: (i) identify the customer contract, (ii) identify the contract’s performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when or as a performance obligation is satisfied. Product Sales, Net We apply the ASC 606 five-step process above to the contracts with our Customers. Product revenue is recognized when Customers take control of the product, which typically occurs upon delivery to the Customers. The transaction price for product sales is reduced for estimates of variable consideration related to (i) discounts and chargebacks, (ii) rebates, wholesaler and GPO fees, and (iii) copay assistance and returns (collectively, gross-to-net adjustments or GTN adjustments). Except for certain wholesaler and GPO fees and discounts, which are based on contracts, our estimates of GTN adjustments involve assumptions and judgments. Our estimates of GTN adjustments for rebates, copay assistance and chargebacks require significant assumptions and judgments, considering factors such as legal interpretations of applicable laws and regulations, historical experience, payor mix (e.g., Medicare or Medicaid), current contract prices under applicable programs, unbilled claims, processing time lags and inventory levels in the distribution channel. Estimates are assessed each period and adjusted as required to revise information or actual experience. Collaboration and Licensing Revenue Our collaboration and licensing arrangements may include the grant of licenses for use of our intellectual property and manufacturing supply services. Considerations for such arrangements may include non-refundable upfront license fees; payments based upon the achievement of development, regulatory, or commercialization milestones; payments for manufacturing supply services; and future royalties on net sales of licensed products. We perform the ASC 606 five-step process above to determine the appropriate amount of revenue to be recognized under our collaboration and licensing arrangements. For performance obligations that are satisfied over time, we recognize revenue using an input or output measure of progress that best depicts the satisfaction of the relevant performance obligation. We evaluate performance obligations by assessing whether promised goods or services are both (i) capable of being distinct and (ii) distinct in the context of the arrangement. Goods or services that meet these criteria are considered distinct performance obligations. Judgment is required to determine whether promised goods or services represent distinct performance obligations. We estimate the transaction price based on expected consideration, which may include fixed or variable consideration. At the inception of each arrangement that includes variable consideration, we evaluate the amount of potential transaction price and the likelihood that the transaction price will be received. The amount of variable consideration that is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. 78 Table of Co n t e n t s Licensing Revenue : • Non-refundable upfront license fees: For arrangements that include a license of intellectual property, and it is determined to be distinct from the other performance obligations identified in the arrangement, we recognize the transaction price allocated to the license as licensing revenue upon transfer of control of the license. • Milestone payments: Contingent milestones at contract inception are estimated at the amount which is not probable of a material reversal and included in the transaction price using the most likely amount method. Milestone payments that are not within our control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore, the variable consideration is constrained. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such contingent milestones and any related constraints, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect earnings in the period of adjustment. • Royalties: For arrangements that include sales-based royalties and a license of intellectual property that is deemed to be the predominant item to which the royalties relate, revenue is recognized at the later of when the related sales occur or when the performance obligation to which some or all of the royalties have been allocated has been satisfied (or partially satisfied). To date, royalty revenue resulting from licensing arrangements has not been material. Product Supply Revenue : For arrangements that include a promise for the future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion (manufacturing supply services), and it is determined to be distinct from the other performance obligations identified in the arrangement, we recognize the transaction price allocated to the manufacturing supply services as product supply revenue upon transfer of control of the product to the customer, which is upon delivery. Advanced payments from customers for the manufacturing of drug substance are recognized as deferred revenue until delivery. Non-Cash Royalty Revenue Related to the Sale of Future Royalties: Royalties and commercialization milestones earned from Kyowa Kirin are recorded as non-cash royalty revenue. As discussed in Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties , future royalties and commercialization milestone payments we may receive under the Kyowa Kirin Agreement will be remitted to HCR pursuant to the HCR Agreement. Accrued Expenses As part of the process of preparing our financial statements, we are required to estimate our accrued expenses, which involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We estimate our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with our service providers and make adjustments if necessary. Service fee accruals are estimated based on the period over which each component of service will be performed, with vendor input if appropriate. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrued or prepaid expense balance accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our estimates of the status and timing may differ from the actual status and timing of services performed. Retirement Savings Plan We offer retirement saving plans through our 401(k) plan, which is available to all full-time employees. In June 2023, we expanded the benefit with the inclusion of a company matching contribution. We contribute to tax-qualified retirement plans for the benefit of employees who meet certain eligibility requirements and choose to participate in the plans. Participating employees specify the percentage of salary they wish to contribute from their compensation, and we make matching contributions. We recognized compensation costs from our contributions of $ 1.4 million, $ 1.1 million and $ 0.2 million in 2025, 2024 and 2023, respectively. Stock-Based Compensation Stock-based compensation expense is recognized for all stock-based payment awards made to employees, non-employees and directors based on estimated fair values. The grant date fair value of the awards is determined using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period 79 Table of Co n t e n t s and is reduced for estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Non-Cash Interest Expense on Deferred Royalty Obligation In connection with the HCR Agreement, as discussed further in Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties, we recorded a liability related to the sale of future royalties and commercialization milestones that is amortized using the effective interest method over the estimated life of the HCR Agreement. As a result, we impute interest on proceeds received from HCR and record non-cash interest expense at the effective interest rate derived from estimated amounts and timing of future royalties and commercialization payments expected to be received by HCR. Leases Operating leases are included in right-of-use assets, current portion of operating lease liability and operating lease liability, net of current portion on our balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on information available at the lease commencement date. Operating lease right-of-use assets also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate a lease when it is reasonably certain that we will exercise any such option. Leases with an initial term of 12 months or less are not recorded on the balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. We have elected not to separate lease and non-lease components, such as common area maintenance charges, and instead account for these as a single lease component. Net Loss per Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potential shares of common stock. Diluted net loss per common share in the periods presented is the same as basic net loss per common share because the effects of potentially dilutive securities are antidilutive due to net losses recognized for each period presented. Recent Accounting Pronouncements New Accounting Pronouncements Recently Adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures . The ASU provides additional transparency within the income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. We adopted ASU 2023-09 retrospectively in the 2025 fourth quarter and determined that the adoption did not have a material impact on our financial statements. Refer to the related disclosures presented in Note 16. Income Taxes . Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement (Topic 220) - Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses , which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the financial statements. The new disclosure requirements are effective for our annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028, with early adoption permitted, and may be applied either prospectively or retrospectively. We are in the process of evaluating the impact of this new guidance on our disclosures. 80 Table of Co n t e n t s NOTE 3. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS The following table summarizes our cash, cash equivalents and short-term investments: December 31, 2025 December 31, 2024 Gross Unrealized Gross Unrealized (in thousands) Amortized Cost Gains Losses Fair Value Amortized Cost Gains Losses Fair Value Cash and cash equivalents Cash $ 18,569 $ — $ — $ 18,569 $ 16,282 $ — $ — $ 16,282 Money market funds 49,430 — — 49,430 48,650 — — 48,650 Total cash and cash equivalents 67,999 — — 67,999 64,932 — — 64,932 Short-term investments U.S. treasury securities $ 95,052 $ 105 $ — $ 95,157 $ 79,720 $ 58 $ ( 5 ) $ 79,773 Commercial paper 46,421 32 ( 3 ) 46,450 37,061 19 ( 15 ) 37,065 U.S. government-sponsored agency bonds 27,330 36 — 27,366 45,960 29 ( 27 ) 45,962 Corporate bonds 22,557 25 — 22,582 17,415 4 ( 6 ) 17,413 Yankee bonds 5,132 3 — 5,135 1,972 — ( 2 ) 1,970 Asset-backed securities — — — — 2,983 2 — 2,985 Total short-term investments 196,492 201 ( 3 ) 196,690 185,111 112 ( 55 ) 185,168 Total cash, cash equivalents and investments $ 264,491 $ 201 $ ( 3 ) $ 264,689 $ 250,043 $ 112 $ ( 55 ) $ 250,100 Realized gains or losses have not been significant and are included in other income, net on our statements of operations and comprehensive loss. Unrealized losses in 2025 and 2024 were not material. All of the short-term available-for-sale securities held as of December 31, 2025 and 2024 had contractual maturities of less than one year. We determined that none of our available-for-sale securities were other-than-temporarily impaired as of December 31, 2025 and 2024, and no investment was in a continuous unrealized loss position for more than one year. Therefore, we believe that it is more likely than not that the investments will be held until maturity or a forecasted recovery of fair value. Based on our procedures under the expected credit loss model, including an assessment of unrealized losses in our portfolio, we concluded that any unrealized losses on our marketable securities were not attributable to credit and, therefore, we have not recorded an allowance for credit losses as of December 31, 2025 and 2024. NOTE 4. FAIR VALUE MEASUREMENTS Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1 – Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by us at the reporting date. Level 2 – Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Valuations based on unobservable inputs for which there is little or no market data, which require us to develop our own assumptions. 81 Table of Co n t e n t s The following table sets forth the fair value of our financial assets that are measured or disclosed on a recurring basis by level within the fair value hierarchy: December 31, 2025 December 31, 2024 (in thousands) Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Assets Money market funds $ 49,430 $ 49,430 $ — $ — $ 48,650 $ 48,650 $ — $ — U.S. treasury securities 95,157 — 95,157 — 79,773 — 79,773 — Commercial paper 46,450 — 46,450 — 37,065 — 37,065 — U.S. government-sponsored agency bonds 27,366 — 27,366 — 45,962 — 45,962 — Corporate bonds 22,582 — 22,582 — 17,413 — 17,413 — Yankee bonds 5,135 — 5,135 — 1,970 — 1,970 — Asset-backed securities — — — — 2,985 — 2,985 — Total $ 246,120 $ 49,430 $ 196,690 $ — $ 233,818 $ 48,650 $ 185,168 $ — Fair Value of Debt The principal outstanding under our 2022 Loan Agreement is subject to a variable interest rate and therefore, we believe the carrying amount of the term loan approximates fair value as of December 31, 2025 and 2024. See Note 9. Borrowing for a description of the Level 2 inputs used to estimate the fair value of the liability. The carrying value of the deferred royalty obligation related to the sale of future royalties approximates its fair value as of December 31, 2025 and 2024 and is based on our current estimate of future royalties and commercialization milestones expected to be received by HCR over the life of the HCR Agreement. See Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties for a description of the Level 3 inputs used to estimate the fair value of the liability. NOTE 5. INVENTORY Inventory consisted of the following: December 31, (in thousands) 2025 2024 Raw materials $ 28,009 $ 30,792 Work in process 88,259 58,685 Finished goods 6,839 1,707 Total $ 123,107 $ 91,184 Reported as Inventory $ 17,735 $ 21,173 Inventory, non-current 105,372 70,011 Total $ 123,107 $ 91,184 Prepaid commercial manufacturing with third-party CMOs not included in inventory was $ 14.5 million and $ 16.4 million as of December 31, 2025 and 2024, respectively. There were no prepayments expected to be converted into inventory after 12 months as of December 31, 2025 and 2024. 82 Table of Co n t e n t s NOTE 6. REVENUE Disaggregation of total revenues by nature is as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Product sales, net $ 377,808 $ 319,196 $ 82,526 Product supply revenue 15,879 11,649 6,121 Licensing revenue 5,088 78 35,809 Non-cash royalty revenue related to the sale of future royalties 8,545 2,692 — Total revenues $ 407,320 $ 333,615 $ 124,456 Product Sales, Net Products are primarily sold to wholesalers, GPOs and specialty pharmacies, and to a lesser extent, directly to retailers, hospitals, clinics and government agencies. Customer orders are generally fulfilled within a few days from receipt. Contractual performance obligations are fulfilled once our Customers receive the product and obtain legal title, at which point, they are able to direct the use of and obtain substantially all of the remaining benefits of the product. Total product sales, net was as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Product sales, net IBSRELA $ 274,207 $ 158,286 $ 80,062 XPHOZAH 103,601 160,910 2,464 Total product sales, net $ 377,808 $ 319,196 $ 82,526 Product sales, net as a percentage of total revenues 92.8 % 95.7 % 66.3 % GTN Adjustments We recognize revenue from product sales at the net sales price which includes estimates of variable consideration related to the following GTN adjustments: • Discounts and chargebacks: We offer prompt pay discounts to our Customers for payment within a specified period, generally approximating two percent of the invoiced sales price. Our payment terms are generally 30 to 60 days. Chargebacks represent the estimated liability to wholesalers resulting from the difference between the wholesale acquisition cost and the lower program price offered to qualified government healthcare providers. • Rebates, wholesaler and GPO fees: We are subject to discount obligations under governmental programs, such as Medicare and Medicaid. For the Medicaid program, we estimate the portion of sales attributed to Medicaid patients as rebates to be paid to the respective state. For the Medicare Part D program, beginning in 2025, we estimate the percentage of products sold to patients in the initial coverage and catastrophic coverage phases and adjust the transaction price for such discount at the time of sale. Prior to 2025, we paid a 70% discount to CMS when the Medicare Part D beneficiaries were in the coverage gap. Wholesaler and GPO fees are based on contracts and therefore require less estimation. • Copay assistance and returns: We estimate the expected cost under the copay assistance program for qualified commercially-insured patients based on the terms of the program and redemption information provided by third-party claims processing organizations. We estimate products’ returns based on products’ actual returns history and other factors, including levels of our inventory in the distribution channel, estimated shelf life and historical sales returns of similar products. Discounts, chargebacks, returns and wholesaler and GPO fees are reflected as reductions to receivables and are typically settled within contractual terms through credits to our Customers. All other GTN adjustments are reflected as a liability and settled through cash payments to our Customers or governmental payor programs, typically over various time periods that may span for multiple quarters. 83 Table of Co n t e n t s The activities and ending reserve balances for each significant category of GTN adjustments on product sales, net, which constitute variable consideration, were as follows: (in thousands) Discounts and Chargebacks Rebates, Wholesaler and GPO Fees Copay Assistance and Returns Total Balance as of December 31, 2023 $ 478 $ 4,234 $ 3,916 $ 8,628 Provisions 15,099 65,833 28,925 109,857 Credits/payments ( 13,934 ) ( 55,592 ) ( 21,671 ) ( 91,197 ) Balance as of December 31, 2024 1,643 14,475 11,170 27,288 Provisions (1) 23,356 108,547 31,667 163,570 Credits/payments ( 23,306 ) ( 88,566 ) ( 33,563 ) ( 145,435 ) Balance as of December 31, 2025 $ 1,693 $ 34,456 $ 9,274 $ 45,423 (1) Provisions included approximately $ 4.4 million of net favorable adjustment resulting from changes in prior periods’ estimates. Geographic Information and Concentrations Revenues are attributed to geographical areas based on the location at which we earned revenue for product sales of IBSRELA and XPHOZAH or the domicile of our collaboration partners. A summary of our revenues by geographic area is as follows: Year Ended December 31, (in thousands) 2025 2024 2023 United States (1) $ 377,808 $ 319,196 $ 83,276 International Asia Pacific (2) 29,170 14,341 41,121 North America (3) 342 78 59 Total revenues $ 407,320 $ 333,615 $ 124,456 (1) Revenues from the United States were comprised of amounts earned from sales of IBSRELA and XPHOZAH. (2) Revenues from Asia Pacific were comprised of amounts earned in accordance with the Kyowa Kirin Agreement and the Fosun Agreement. (3) Revenues from North America were comprised of amounts earned from Canada in accordance with the Knight Agreement. Gross product sales from Customers and revenues from collaboration partners, each accounting for more than 10% of total revenues, were as follows: Year Ended December 31, 2025 2024 2023 Customers (1) BioRidge Pharma, LLC 65.9 % 75.4 % 24.0 % Cardinal Health 21.4 % 14.5 % 19.8 % McKesson Corporation 17.9 % 14.1 % 15.7 % Cencora (formerly AmerisourceBergen Drug Corporation) 17.3 % 16.4 % 19.1 % Collaboration partners Kyowa Kirin 5.9 % 4.3 % 29.0 % (1) The total of the above percentages exceeds 100% as the numerators used in the calculations represent gross product sales for each Customer, as opposed to product sales, net as presented on our statements of operations and comprehensive loss. NOTE 7. COLLABORATION AND LICENSING AGREEMENTS We have out-licensed to external partners for the development and commercialization of tenapanor outside of the U.S. We recognize revenue from our agreements with Kyowa Kirin, Fosun Pharma and Knight as licensing revenue, product supply revenue or non-cash royalty revenue related to the sale of future royalties. Refer to Note 2. Summary of Significant Accounting Policies for more information about our significant accounting policies for such revenue streams. 84 Table of Co n t e n t s The following table summarizes total revenues by collaboration partner: Year Ended December 31, (in thousands) 2025 2024 2023 Licensing revenue Kyowa Kirin $ — $ — $ 30,000 Fosun Pharma 5,000 — 5,000 METiS — — 750 Knight 88 78 59 Total licensing revenue $ 5,088 $ 78 $ 35,809 Product supply revenue Kyowa Kirin $ 15,625 $ 11,649 $ 6,092 Knight 254 — 29 Total supply revenue $ 15,879 $ 11,649 $ 6,121 Non-cash royalty revenue related to the sale of future royalties Kyowa Kirin $ 8,545 $ 2,692 $ — The following table presents changes in our current and non-current deferred revenue balances, which are primarily attributable to Kyowa Kirin: 2025 2024 (in thousands) Current Non-Current Current Non-Current Deferred revenue balance as of January 1, $ 10,686 $ 7,232 $ 7,182 $ 8,644 Prepaid product supply 1,433 6,467 3,716 8,212 Product supply delivered ( 10,913 ) — ( 9,836 ) — Reclassify amounts to be recognized in the next twelve months — — 9,624 ( 9,624 ) Deferred revenue balance as of December 31, $ 1,206 $ 13,699 $ 10,686 $ 7,232 Kyowa Kirin We granted Kyowa Kirin an exclusive license (Kyowa Kirin Agreement) to develop and commercialize certain NHE3 inhibitors including tenapanor in Japan for the treatment of cardiorenal diseases and conditions, excluding cancer, in exchange for (i) future royalties defined below; (ii) an upfront license fee of $ 30.0 million, recognized upon execution of the agreement; (iii) potential future development and regulatory milestones of up to $ 55.0 million, of which $ 35.0 million has been recognized as revenue to date; and (iv) commercialization milestones of up to ¥ 8.5 billion (or approximately $ 54.5 million at the currency exchange rate as of December 31, 2025), of which $ 3.4 million has been recognized as revenue to date. In addition, we are eligible to receive royalties on net sales of tenapanor in Japan throughout the term of the agreement. Under a Commercial Supply Agreement, we supply tenapanor drug substance that will be used to satisfy Kyowa Kirin’s commercial needs which includes advanced payments for reimbursement of costs plus a reasonable overhead for the supply of product. The Kyowa Kirin Agreement was amended to reduce the royalty rate Kyowa Kirin would pay on tenapanor sales in Japan from high teens to low double digits for a two-year period of time following the first commercial sale in Japan, and then to mid-single digits for the remainder of the royalty term. As consideration for the reduced royalty rate, Kyowa Kirin agreed to pay us up to an additional $ 40.0 million payable in two tranches: (i) the first payment due following Kyowa Kirin’s filing with the Japanese MHLW of its application for marketing approval for tenapanor, recognized as revenue in 2022; and (ii) the second payment due following Kyowa Kirin’s receipt of regulatory approval to market tenapanor for hyperphosphatemia in Japan, recognized as revenue in 2023. As discussed in Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties , future royalties and commercialization milestone payments we may receive under the license, as amended, will be remitted to HCR pursuant to the HCR Agreement. 85 Table of Co n t e n t s In February 2024, Kyowa Kirin announced the launch of tenapanor, marketed as PHOZEVEL ® , for patients with CKD with hyperphosphatemia in Japan. Following the launch, we began to recognize earned royalties and commercialization milestones from sales of tenapanor in Japan, which are remitted to HCR in accordance with the HCR Agreement. The first commercialization milestone was achieved in the 2025 third quarter, triggering a ¥ 500.0 million payment to us, or approximately $ 3.4 million at the currency exchange rate as of September 30, 2025. This milestone was recorded as non-cash royalty revenue related to the sale of future royalties on our statements of operations and comprehensive loss and was remitted to HCR upon receipt. Fosun Pharma We have an exclusive license agreement with Fosun Pharma (Fosun Agreement) for the development, commercialization and distribution of tenapanor in China for both hyperphosphatemia and IBS-C. The Fosun Agreement granted exclusive license rights to Fosun Pharma in exchange for (i) an upfront license fee of $ 12.0 million, recognized upon execution of the agreement; and (ii) potential future development and commercialization milestones of up to $ 113.0 million, of which $ 13.0 million has been recognized as revenue to date. In addition, we are eligible to receive reimbursement of cost plus a reasonable overhead for the supply of product and tiered royalties on net sales ranging from the mid-teens to 20 %. In February 2025, we announced the NDA approval by China’s Center for Drug Evaluation of the NMPA for tenapanor in the control of serum phosphorus in adult patients with CKD on hemodialysis. This approval triggered a $ 5.0 million milestone to us, which was recorded as licensing revenue on our statements of operations and comprehensive loss when earned during the 2025 first quarter and was received in April 2025. Knight We have an exclusive license agreement with Knight (Knight Agreement) for the development, commercialization and distribution of tenapanor in Canada for hyperphosphatemia and IBS-C. The Knight Agreement granted exclusive license rights to Knight in exchange for (i) an upfront license fee of $ 2.3 million, recognized upon execution of the agreement; and (ii) potential future development and commercialization milestones of up to CAD 22.2 million (or approximately $ 16.2 million at the currency exchange rate as of December 31, 2025), of which $ 0.7 million has been recognized as revenue to date. In addition, we are eligible to receive royalties ranging from the mid-single digits to the low twenties throughout the term of the agreement and a transfer price for manufacturing supply services. METiS We have an exclusive license agreement with METiS Therapeutics Inc., (METiS Agreement) for the development and commercialization of a portfolio of TGR5 agonist compounds that we discovered and developed for all therapeutic areas in exchange for (i) an upfront license fee of $ 0.8 million, recognized upon execution of the agreement in 2023; and (ii) potential future development and commercialization milestones of up to $ 243.0 million. In addition, we are also eligible to receive royalties ranging within the mid-single digits throughout the term of the agreement. AstraZeneca We had a termination agreement with AstraZeneca (AstraZeneca Termination Agreement), pursuant to which we agreed to pay AstraZeneca (i) future royalties at a royalty rate of 10 % of net sales of tenapanor or other NHE3 products by us or our licensees; and (ii) 20 % of non-royalty revenue received from a new collaboration partner should we elect to license, or otherwise provide rights to develop and commercialize tenapanor or other NHE3 products, up to a maximum of $ 75.0 million in aggregate for (i) and (ii). Royalty expense recognized under this agreement as cost of sales on our statements of operations and comprehensive loss was $ 12.7 million, $ 34.7 million and $ 12.4 million in 2025, 2024 and 2023, respectively. As of the end of the 2025 second quarter, we had fully recognized the maximum $ 75.0 million royalty obligation, which had been fully remitted as of the end of the 2025 third quarter. NOTE 8. DEFERRED ROYALTY OBLIGATION RELATED TO THE SALE OF FUTURE ROYALTIES We and HCR have an agreement in which HCR agreed to pay up to $ 20.0 million in exchange for future royalties and commercialization milestone payments that we may receive under our Kyowa Kirin Agreement, as discussed further in Note 7. Collaboration and Licensing Agreements . The $ 20.0 million was payable as follows: (i) $ 10.0 million upfront upon agreement execution, received in June 2022; (ii) $ 5.0 million upon Kyowa Kirin’s receipt of regulatory approval to market tenapanor for hyperphosphatemia in Japan, received in October 2023; and (iii) $ 5.0 million in the event net sales of tenapanor in Japan by Kyowa Kirin exceeded a defined annual target level by the end of 2025, which was not achieved as of December 31, 2025. The HCR Agreement is effective until terminated by the mutual agreement of the parties and contains customary representations and warranties and customary affirmative and negative covenants. 86 Table of Co n t e n t s Payments received from HCR are recorded as a deferred royalty obligation on our balance sheets. Due to our ongoing manufacturing obligations under the Kyowa Kirin Agreement, we account for the proceeds as imputed debt and therefore recognize royalties and commercialization milestones earned under the Kyowa Kirin Agreement as non-cash royalty revenue. Non-cash interest expense is recorded at the imputed interest rate derived from estimated amounts and timing of future royalties and commercialization milestone payments expected to be received by HCR. In conjunction with the HCR Agreement, we incurred approximately $ 0.4 million in transaction costs, which, along with the deferred royalty obligation, are being amortized as non-cash interest expense over the estimated life of the HCR Agreement using the effective interest method. The deferred royalty obligation will be effectively repaid over the life of the HCR Agreement as we remit to HCR royalties and commercialization milestones paid to us by Kyowa Kirin. We periodically assess the estimated amounts and timing of future royalties and commercialization milestone payments from Kyowa Kirin and, to the extent that the amount or timing of such payments is materially different than our original estimates, we prospectively adjust the imputed interest rate and the related amortization of the deferred royalty obligation. A summary of financial information related to the HCR Agreement is as follows: Year Ended December 31, ($ in thousands) 2025 2024 2023 Non-cash interest expense related to the sale of future royalties $ ( 8,296 ) $ ( 7,088 ) $ ( 3,924 ) Effective interest rate 25.4 % 31.0 % 34.7 % (in thousands) 2025 2024 2023 Deferred royalty obligation balance as of January 1, $ 25,527 $ 20,179 $ 11,254 Proceeds received from HCR — — 5,000 Non-cash interest expense related to the sale of future royalties 8,296 7,088 3,924 Royalty and commercialization milestone payments remitted to HCR ( 7,947 ) ( 1,740 ) — Other — — 1 Deferred royalty obligation balance as of December 31, $ 25,876 $ 25,527 $ 20,179 NOTE 9. BORROWING Long-term borrowing was as follows: December 31, (in thousands) 2025 2024 Interest rate Principal Term A Loan $ 27,500 $ 27,500 7.95 % + 0.022 % + SOFR (subject to a floor of 1.0 %) Term B Loan 22,500 22,500 7.95 % + 0.022 % + SOFR (subject to a floor of 1.0 %) Term C Loan 50,000 50,000 4.25 % + 0.022 % + SOFR (subject to a floor of 4.7 %) Term D Loan 50,000 50,000 4.00 % + 0.022 % + SOFR (subject to a floor of 4.7 %) Term E Loan 50,000 — 4.00 % + 0.022 % + SOFR (subject to a floor of 4.7 %) Total principal 200,000 150,000 Adjustments to principal value Unamortized discount and debt issuance costs ( 1,127 ) ( 1,136 ) Accreted value of final fee 3,961 1,989 Total long-term debt 202,834 150,853 Less: Current portion of long-term debt — — Long-term debt, net of current portion $ 202,834 $ 150,853 We have a loan and security agreement (as amended, 2022 Loan Agreement) with SLR, as collateral agent, and the lenders listed in the 2022 Loan Agreement (collectively, the 2022 Lenders). On June 30, 2025, we entered into an amendment to our 2022 Loan Agreement (the Fifth Amendment), by and between us and the 2022 Lenders. The Fifth Amendment, among other things, (i) provided for the immediate draw of the principal amount of $ 50.0 million (the Term E Loan and together with the Term A, B, C and D Loans, the Five Loans) on the closing date of the Fifth Amendment; and (ii) provides us with the option to draw an additional $ 100.0 million of committed senior secured term loans, consisting of two separate term loans, each in a principal amount of $ 50.0 million: (a) the first of which is available at our election through June 30, 2026 (the Term F Loan) and (b) the second of which is available at our election through 87 Table of Co n t e n t s December 20, 2026 (the Term G Loan and, together with the Term F Loan, the Incremental Term Loans). We concluded that the Fifth Amendment was a modification to the 2022 Loan Agreement and is accounted for accordingly. The interest rate for each of the Incremental Term Loans, if drawn, will be 4.95 % plus the 1-month CME Term SOFR reference rate as published by the CME Term SOFR Administrator on the CME Term SOFR Administrator’s Website, subject to a SOFR floor of 3.50 %. Under the Fifth Amendment, the maturity date for the Term E Loan (and the other outstanding term loans) remains July 1, 2028. We are permitted to make interest-only payments on the Term E Loan (and the other outstanding term loans) through July 1, 2028. The maturity date for each of the Incremental Term Loans will be July 1, 2030. We will be permitted to make interest-only payments on the Incremental Term Loans from the date each of the Incremental Term Loans is drawn through July 1, 2030. We paid fees of $ 0.2 million, $ 0.1 million, $ 0.3 million, $ 0.3 million and $ 0.3 million on each funding date of the Term A, Term B, Term C, Term D and Term E Loans, respectively. In addition, we paid a facility fee of $ 1.0 million with respect to the Incremental Term Loans on the closing date of the Fifth Amendment. We are obligated to pay a final fee equal to 4.95 % of the aggregate original principal amount of the Five Loans, upon the earliest to occur of July 1, 2028, the acceleration of the Five Loans, and the prepayment, refinancing, substitution, or replacement of the Five Loans. We will be obligated to pay a final fee equal to 3.45 % of the aggregate original principal amount of the Incremental Term Loans, to the extent such loans are funded, upon the earliest of any final termination, acceleration, prepayment or July 1, 2030. We may voluntarily prepay all amounts outstanding under the Five Loans, subject to a prepayment premium of one percent of the outstanding principal amount of the Five Loans if prepaid prior to July 1, 2028. We may voluntarily prepay all amounts outstanding under the Incremental Term Loans, if drawn, subject to a prepayment premium of two percent of the outstanding principal amount of the Incremental Term Loans if prepaid prior to June 30, 2026 and one percent of the outstanding principal amount of the Incremental Term Loans if prepaid after June 30, 2026 and prior to July 1, 2030. The 2022 Loan Agreement contains certain covenants, including a single financial covenant that the sum of our net product revenue, calculated on a trailing six-month basis, plus unrestricted cash and cash equivalents that are subject to a first-priority perfected lien in favor of SLR, shall be greater than or equal to 100 % of the principal amount outstanding under the 2022 Loan Agreement. In addition, the 2022 Loan Agreement contains subjective acceleration clauses to accelerate the maturity of outstanding principal amount in the event that a material adverse change has occurred within the business, operations or financial condition of the Company. As of December 31, 2025, we believe that the likelihood of the acceleration of the maturity due to subjective acceleration clauses is remote. The total unaccreted final fee was $ 5.9 million and $ 5.4 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, our total future payment obligation related to the outstanding balance of the term loans, excluding interest payments, was $ 209.9 million, which is due on July 1, 2028. NOTE 10. DERIVATIVE LIABILITIES 2018 Exit Fee In October 2023, we received approval from the FDA for XPHOZAH to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy. In connection with a previous loan agreement (2018 Loan Agreement), we became obligated to pay an exit fee of $ 1.5 million, which was paid in October 2023. 2022 Exit Fee The 2022 Loan Agreement obligated us to pay an exit fee in the amount of two percent of the Original Loans funded upon (i) any change of control transaction or (ii) our achievement of net revenue from the sale of any products equal to or greater than $ 100.0 million, measured on a six-month basis (Revenue Milestone), tested monthly at the end of each month. The Revenue Milestone was achieved in the 2024 second quarter, resulting in a $ 1.0 million payment that was settled in October 2024. 88 Table of Co n t e n t s NOTE 11. LEASES Our lease obligation is comprised of operating leases for our offices with remaining lease terms ranging from approximately two years to four years and each containing customary rent escalation clauses. Each of our leases contains one renewal, at our option, for a five-year period. We have not included these renewal periods in the calculation of the right-of-use assets and lease liabilities since it is uncertain whether we will exercise the renewal options. The following table provides additional details of our facility leases presented in our balance sheets: ($ in thousands) December 31, Facilities 2025 2024 Right-of-use assets $ 4,795 $ 2,380 Current portion of lease liabilities $ 1,479 $ 1,562 Operating lease liability, net of current portion 3,641 1,023 Total lease liabilities $ 5,120 $ 2,585 Weighted-average remaining term (in years) 3.1 1.8 Weighted-average discount rate 5.6 % 6.5 % The lease costs, which are included in our statements of operations and comprehensive loss, and the supplemental cash flow information related to the leases were as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Operating lease expense $ 2,211 $ 4,699 $ 3,857 Cash paid for operating leases $ 2,093 $ 4,931 $ 4,481 The following table summarizes our undiscounted cash payment obligations for our operating lease liabilities as of December 31, 2025: (in thousands) Operating Leases 2026 $ 1,784 2027 1,836 2028 1,402 2029 575 Thereafter — Total undiscounted operating lease payments 5,597 Imputed interest expenses ( 477 ) Total operating lease liabilities 5,120 Less: Current portion of operating lease liability ( 1,479 ) Operating lease liability, net of current portion $ 3,641 NOTE 12. STOCKHOLDERS’ EQUITY In January 2023, we entered into the 2023 Open Market Sales Agreement with Jefferies with respect to an “at-the-market offering” program, which was established under the Company’s shelf registration statement on Form S-3 and expired in January 2026. Under the 2023 Open Market Sales Agreement, we sold a total of 16.8 million shares of our common stock and received gross proceeds of $ 70.0 million at a weighted average sales price of approximately $ 4.17 . During the year ended December 31, 2025, we did not sell any shares under the 2023 Open Market Sales Agreement. In November 2025, we filed an automatic shelf registration statement on Form S-3ASR, which became effective upon filing, containing (i) a base prospectus, which covers the offering, issuance and sale from time to time in one or more offerings of our common stock, preferred stock, debt securities, warrants and/or units; and (ii) a prospectus supplement for the offering, 89 Table of Co n t e n t s issuance and sale of up to a maximum aggregate offering price of $ 100.0 million of our common stock that may be issued and sold from time to time, under the 2025 Open Market Sales Agreement, deemed to be “at-the-market offerings.” Pursuant to the 2025 Open Market Sales Agreement, Jefferies, as sales agent, may receive a commission of up to three percent of the gross sales price for shares of our common stock sold under the 2025 Open Market Sales Agreement. As of December 31, 2025, there have been no sales of our common stock under the 2025 Open Market Sales Agreement. NOTE 13. EQUITY INCENTIVE PLANS 2014 Plan The 2014 Equity Incentive Plan (2014 Plan), effective on June 18, 2014, provided for the stock-based compensation awards, including stock options, stock appreciation rights, restricted stock, service-based RSUs, performance-based RSUs, deferred stock, deferred stock units, dividend equivalents, stock payments and performance awards. The 2014 Plan initially reserved 1.5 million shares, including the 35 thousand shares remaining for future awards under a previous equity incentive plan (2008 Plan), with up to 1.2 million additional shares which could be added from forfeited or lapsed awards from the 2008 Plan. The 2014 Plan allowed for an annual increase in the number of shares available for issuance on the first day of each year through 2024, equal to the lesser of four percent of our outstanding common stock on the last day of the immediately preceding year or a smaller amount determined by the board of directors (2014 Plan evergreen provision). On June 14, 2024, stockholders approved the Amended and Restated 2014 Equity Incentive Award Plan (2014 A&R Plan). The key provisions pursuant to the 2014 A&R Plan included (i) an addition of 19.0 million shares to the total existing share reserve; (ii) the removal of the 2014 Plan evergreen provision such that any increase to the total number of shares that may be issued must be approved by our stockholders; and (iii) an increase for the limit of shares that may be issued upon exercise of incentive stock options from 10.7 million to 58.5 million shares. In addition to increases resulting from repurchases, forfeitures, expirations and cancellations of awards under the 2008 Plan, shares reserved for issuance under the 2014 A&R Plan will be increased by the number of shares subject to awards granted under the Inducement Plan, as discussed below, that are repurchased, forfeited, expire or are cancelled on or after June 14, 2024. As a result, no new awards would be made under the Inducement Plan following June 14, 2024. On June 18, 2025, stockholders approved the Equity Plan Amendment to the 2014 A&R Plan to (i) increase the number of shares reserved for issuance under the 2014 A&R Plan by 10.0 million shares; and (ii) increase the limit of shares that may be issued upon exercise of incentive stock options from 58.5 million to 68.5 million shares. As of December 31, 2025, approximately 16.9 million shares of our common stock were available for future issuance under the 2014 A&R Plan, as amended. 2016 Plan In November 2016, our board of directors approved the 2016 Employment Commencement Incentive Plan (Inducement Plan) under which 1.0 million shares were reserved. In January 2021, January 2022, December 2022 and January 2024, 0.5 million, 2.0 million, 3.0 million and 5.8 million shares, respectively, were added to the Inducement Plan. As of December 31, 2025, 9.0 million shares of our common stock were subject to inducement grants that were issued pursuant to the Inducement Plan. As of December 31, 2025, no additional shares of our common stock were available for future issuance under the 2016 Plan. Stock Options A summary of our stock option activity and related information for the year ended December 31, 2025 is as follows: Number of Shares (in thousands) Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balance as of December 31, 2024 28,085 $ 5.63 Options granted 9,011 $ 5.08 Options exercised ( 1,880 ) $ 2.20 Options forfeited or canceled ( 6,239 ) $ 6.29 Balance as of December 31, 2025 28,977 $ 5.54 6.4 $ 37,405 Vested and expected to vest as of December 31, 2025 28,977 $ 5.54 6.4 $ 37,405 Exercisable as of December 31, 2025 18,133 $ 5.43 5.1 $ 28,181 90 Table of Co n t e n t s The aggregate intrinsic value represents the difference between the total pre-tax value (i.e., the difference between our stock price and the exercise price) of stock options outstanding as of December 31, 2025, based on our common stock closing price of $ 5.83 per share, which would have been received by the option holders if all their in-the-money options had been exercised as of that date. The intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 9.6 million, $ 19.6 million and $ 1.1 million, respectively. The total fair value of options vested during the years ended December 31, 2025, 2024 and 2023 was $ 68.1 million, $ 61.0 million and $ 24.9 million, respectively. The weighted-average grant-date estimated fair value of options granted during the years ended December 31, 2025, 2024 and 2023 was $ 3.19 , $ 6.22 and $ 2.36 per share, respectively. The estimated grant date fair value of employee stock options was calculated using the Black-Scholes option-pricing model, based on the following weighted-average assumptions: Year Ended December 31, 2025 2024 2023 Expected term (in years) 4.0 5.4 5.1 Expected volatility 77.6 % 100.8 % 97.6 % Risk-free interest rate 3.1 % 4.0 % 3.8 % Dividend yield — % — % — % Expected Term —We estimate the expected term of our options based upon historical exercises and post-vesting termination behavior. Expected Volatility —We use the historic volatility of our own stock over the retrospective period corresponding to the expected remaining term of the options to compute our expected stock price volatility. Risk-Free Interest Rate —The risk-free interest rate assumption is based on the zero-coupon U.S. treasury instruments on the date of grant with a maturity date consistent with the expected term of our stock option grants. Dividend Yield —To date, we have not declared or paid any cash dividends and do not have any plans to do so in the future. Therefore, we use an expected dividend yield of zero . Restricted Stock Units A summary of our RSUs activity and related information for the year ended December 31, 2025 is as follows: Number of RSUs (in thousands) Weighted-Average Grant Date Fair Value per Share Non-vested restricted stock units as of December 31, 2024 8,013 $ 6.59 Granted 11,291 $ 5.15 Vested ( 4,070 ) $ 5.75 Forfeited ( 2,651 ) $ 5.93 Non-vested restricted stock units as of December 31, 2025 12,583 $ 5.71 Restricted stock units exercisable (vested and deferred) as of December 31, 2025 21 The total estimated fair value of RSUs vested during the years ended December 31, 2025, 2024 and 2023 was $ 21.7 million, $ 16.4 million and $ 3.5 million, respectively. Issuance of Common Stock for Services During the years ended December 31, 2025, 2024 and 2023, we issued approximately 0.1 million, 41 thousand and 0.1 million shares, respectively, of our common stock to members of the board of directors who elected to receive stock in lieu of their cash fees under our Non-Employee Director Compensation Program, as amended. In 2025, our board of directors adopted the Fifth Amended and Restated Non-Employee Director Compensation Program, under which the board may provide each director with the opportunity to defer the settlement of restricted stock units to be granted to a future date. The shares issued during the years ended December 31, 2025, 2024 and 2023 were valued at $ 0.3 million, $ 0.3 million and $ 0.3 million, respectively, based on the fair value of the common stock on the date of grant. 91 Table of Co n t e n t s Employee Stock Purchase Plan The 2014 ESPP, effective on June 18, 2014, initially reserved approximately 0.2 million shares of our common stock for our eligible employees to purchase shares of our common stock at a discount. If approved by the administrator of the ESPP, on the first day of each calendar year through 2024, the number of shares in the reserve increased by an amount equal to the lesser of (i) one percent of the shares of our common stock outstanding on the last day of the immediately preceding fiscal year; and (ii) such number of shares of our common stock as determined by the board of directors (2014 ESPP evergreen provision); provided, however, no more than 2.2 million shares of our common stock could be issued under the ESPP. On June 14, 2024, stockholders approved the Amended and Restated 2014 ESPP (A&R ESPP). The key provisions pursuant to the A&R ESPP included (i) an addition of 3.0 million shares to the total existing share reserve; and (ii) the removal of the 2014 ESPP evergreen provision such that no evergreen increases would be made after June 14, 2024. During the years ended December 31, 2025, 2024 and 2023, we issued approximately 0.4 million, 0.5 million and 0.4 million shares, respectively, at an average share price of $ 4.46 , $ 4.64 and $ 1.85 , respectively, pursuant to the ESPP. As of December 31, 2025, approximately 3.3 million shares of our common stock were available for future issuance under the A&R ESPP. The following table illustrates the weighted-average assumptions for the Black-Scholes option-pricing model used in determining the fair value of ESPP purchase rights granted to our employees: Year Ended December 31, 2025 2024 2023 Expected term (in years) 0.5 0.5 0.5 Expected volatility 72.6 % 82.8 % 86.0 % Risk-free interest rate 4.2 % 5.0 % 5.3 % Dividend yield — % — % — % Stock-Based Compensation Expense Stock-based compensation expense for stock options, RSUs and our ESPP included in our statements of operations and comprehensive loss was as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Selling, general and administrative $ 38,650 $ 27,791 $ 9,952 Research and development 10,312 9,590 3,578 Total $ 48,962 $ 37,381 $ 13,530 A summary of our total unrecognized stock-based compensation expense, net of estimated forfeitures, as of December 31, 2025 is as follows: Unrecognized Compensation Expense (in thousands) Average Remaining Vesting Period (in years) Stock option grants $ 46,330 2.53 RSU grants $ 67,104 2.88 ESPP $ 107 0.17 92 Table of Co n t e n t s NOTE 14. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: December 31, (in thousands) 2025 2024 Office equipment and furniture $ 2,686 $ 2,923 Leasehold improvements 2,148 9,144 Laboratory equipment — 46 Property and equipment, gross 4,834 12,113 Less: Accumulated depreciation ( 2,650 ) ( 10,618 ) Total property and equipment, net $ 2,184 $ 1,495 We recognized depreciation expense in the amount of $ 0.8 million, $ 0.5 million and $ 0.6 million in 2025, 2024 and 2023, respectively. NOTE 15. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: December 31, (in thousands) 2025 2024 Accrued gross to net revenue liabilities $ 30,272 $ 10,112 Accrued sales and marketing expenses 4,598 3,696 Accrued contract manufacturing expenses 2,821 1,402 Accrued medical affairs expenses 2,538 817 Accrued payments due to AstraZeneca — 12,077 Other 7,348 6,538 Total accrued expenses and other current liabilities $ 47,577 $ 34,642 NOTE 16. INCOME TAXES The components of our provision for income taxes were as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Loss before provision for income taxes U.S. $ ( 60,630 ) $ ( 38,870 ) $ ( 65,520 ) Provision for income taxes Current State $ 469 $ 266 $ 47 Foreign 500 — 500 Total current 969 266 547 Deferred Federal — — — Total deferred — — — Total provision for income taxes $ 969 $ 266 $ 547 93 Table of Co n t e n t s A reconciliation of the statutory federal income tax rate to our effective tax rate is as follows: Year Ended December 31, 2025 2024 2023 ($ in thousands) $ % $ % $ % Income tax at the federal statutory rate $ ( 12,732 ) 21.0 % $ ( 8,163 ) 21.0 % $ ( 13,759 ) 21.0 % State and local income taxes, net of federal effect (1) 401 ( 0.7 ) % 191 ( 0.5 ) % 13 — % Foreign tax effects 500 ( 0.8 ) % — — % 500 ( 0.8 ) % Tax credits Research and development tax credits ( 936 ) 1.5 % — — % ( 215 ) 0.3 % Other ( 500 ) 0.8 % — — % ( 500 ) 0.8 % Changes in valuation allowance 9,367 ( 15.4 ) % 8,023 ( 20.6 ) % 13,601 ( 20.8 ) % Nontaxable or nondeductible items Section 162(m) limitation 1,322 ( 2.2 ) % 2,247 ( 5.8 ) % 1,217 ( 1.9 ) % Stock-based compensation 3,672 ( 6.1 ) % ( 2,003 ) 5.2 % ( 65 ) 0.1 % Other ( 125 ) 0.2 % ( 29 ) 0.1 % ( 245 ) 0.4 % Effective tax rate $ 969 ( 1.7 ) % $ 266 ( 0.6 ) % $ 547 ( 0.9 ) % (1) State and local income taxes that made up the majority (greater than 50%) of the tax effect in this category included: Kentucky in 2025 and 2024; and South Carolina and Kentucky in 2023. The following table presents our income taxes paid, net of refunds, which are all attributable to state and local: Year Ended December 31, (in thousands) 2025 2024 2023 Kentucky $ 391 $ 50 * Texas 41 18 5 South Carolina * 105 18 New Jersey * * 8 New York * 40 7 Massachusetts * 20 * Other 53 33 13 Total $ 485 $ 266 $ 51 * Jurisdiction below the threshold for the period presented. 94 Table of Co n t e n t s Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their income tax bases, as well as from net operating loss and tax credit carryforwards. Significant components of our deferred tax assets were as follows: December 31, (in thousands) 2025 2024 Deferred tax assets Net operating loss carryforwards $ 124,100 $ 103,643 Amortization and depreciation 44,703 64,237 Tax credits 17,109 15,529 Stock-based compensation 13,446 11,226 Deferred royalty obligation 6,497 6,409 Other 14,941 8,122 Deferred tax assets 220,796 209,166 Valuation allowance ( 219,592 ) ( 208,568 ) Deferred tax assets net of valuation allowance 1,204 598 Deferred tax liabilities Right-of-use asset ( 1,204 ) ( 598 ) Deferred tax liabilities ( 1,204 ) ( 598 ) Net deferred taxes $ — $ — Realization of deferred tax assets is dependent on future taxable income, if any, the timing and the amount of which are uncertain. We assess the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant component of objective negative evidence evaluated was our cumulative loss incurred over the three-year period ended December 31, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of December 31, 2025, 2024 and 2023, a full valuation allowance has been recorded against our deferred tax assets. The valuation allowance increased by $ 11.0 million in 2025, primarily attributable to net operating loss carryforwards and stock-based compensation. The amount of the deferred tax assets considered realizable could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence, such as cumulative losses, are no longer present. In such cases, additional weight may be given to subjective evidence, such as our projections for growth. As of December 31, 2025, we had net operating loss carryforwards for federal income tax purposes of approximately $ 572.8 million, of which approximately $ 422.7 million can be carried forward indefinitely and the remaining net operating losses begin to expire in 2030, if not utilized. We had approximately $ 19.5 million of federal research and development tax credit carryforwards and approximately $ 2.2 million of foreign tax credit carryforwards that begin to expire in 2027, if not utilized. In addition, we had net operating loss carryforwards for California income tax purposes of approximately $ 101.6 million that begin to expire in 2030, if not utilized, and state research and development tax credit carryforwards of approximately $ 9.4 million that do not expire. We had approximately $ 0.1 million of minimum tax credit carryovers for California income tax purposes that do not expire. We had other state net operating losses of approximately $ 128.6 million that begin to expire in 2031. The future utilization of net operating loss and tax credit carryforwards may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that may have occurred previously or that could occur in the future. Due to the existence of the valuation allowance, limitations under Section 382 and 383 will not impact our effective tax rate. In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA makes permanent many of the expired and expiring tax provisions of the Tax Cuts and Jobs Act and restores certain business provisions, including the immediate expensing of domestic research and development costs. In addition, the OBBBA allows for an accelerated deduction of the unamortized domestic research and development costs capitalized during the 2022 through 2024 tax years. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The enactment of the OBBBA did not have a material impact on our financial statements. 95 Table of Co n t e n t s A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in thousands) 2025 2024 2023 Balance as of January 1, $ 22,919 $ 23,625 $ 24,075 Additions based on tax positions related to current year 864 105 262 Additions based on tax positions related to prior year — — 99 Subtractions based on tax positions related to prior year ( 811 ) ( 811 ) ( 811 ) Balance as of December 31, $ 22,972 $ 22,919 $ 23,625 We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition at the effective date to be recognized. None of our unrecognized tax benefits would impact the effective tax rate if recognized, because the benefit would be offset by an increase in the valuation allowance. We have elected to include interest and penalties as a component of tax expense. During the years ended December 31, 2025, 2024 and 2023, we did not recognize accrued interest and penalties related to unrecognized tax benefits. We file a U.S. federal income tax return and income tax returns in various state and local jurisdictions. Due to our net operating loss and tax credit carryforwards, the income tax returns remain open to U.S. federal and state tax examinations. We are not currently under examination in any tax jurisdiction. NOTE 17. SEGMENT REPORTING We operate in a single reportable segment with a mission to develop and commercialize innovative medicines that meet significant unmet medical needs. A centralized research and development organization, supply chain organization and commercial organization are all responsible for the development, manufacturing, supply and sale of our products. Our business is also supported by centralized corporate functions. We currently operate primarily in the U.S. and earn revenues from sales of IBSRELA and XPHOZAH, both branded products derived from tenapanor, a molecule developed from our unique and innovative platform. In addition to commercializing IBSRELA and XPHOZAH, we are also developing a next-generation NHE3 inhibitor that we believe can have application across multiple therapeutic areas. Collaboration and licensing agreements with external partners are utilized for development and commercialization activities outside the U.S. Currently, we maintain such agreements for certain indications of tenapanor in Japan (Kyowa Kirin), China (Fosun Pharma) and Canada (Knight), as discussed further in Note 7. Collaboration and Licensing Agreements . We recognize other revenues in the form of licensing revenue, product supply revenue or non-cash royalty revenue related to the sale of future royalties under such agreements. Royalties and commercialization milestones earned under the Kyowa Kirin Agreement are subject to a separate agreement where such revenue payments are sold to HCR, as discussed further in Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties . Our Chief Executive Officer (CEO) is our Chief Operating Decision Maker (CODM), responsible for allocating resources and assessing the Company’s performance using aggregated financial information. Utilizing aggregated financial information enables the CODM to determine the most appropriate resource allocation across the commercial organization, research and development projects or other initiatives consistent with our long-term corporate wide strategic goals. The CODM primarily uses aggregated net loss as reported on the statements of operations and comprehensive loss to measure segment loss, supplemented by certain additional significant expense details reflected in the table below. 96 Table of Co n t e n t s Detailed information regarding our single operating segment’s significant revenues, expenses and operating loss is as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Revenues Product sales, net $ 377,808 $ 319,196 $ 82,526 Other revenues (1) 29,512 14,419 41,930 Total revenues 407,320 333,615 124,456 Less Cost of product sales (2) 11,185 6,851 2,323 Other cost of revenue (3) 28,352 43,705 15,472 Research and development (4) 58,429 39,480 29,231 Selling (4) 226,925 162,957 80,028 General and administrative (4) 58,662 52,916 34,020 Stock-based compensation 48,962 37,381 13,530 Other segment expenses (5) 15,782 18,275 13,128 Total costs and operating expenses 448,297 361,565 187,732 Consolidated loss from operations ( 40,977 ) ( 27,950 ) ( 63,276 ) Other reconciliation items (6) ( 20,622 ) ( 11,186 ) ( 2,791 ) Consolidated net loss $ ( 61,599 ) $ ( 39,136 ) $ ( 66,067 ) (1) Other revenues includes revenues from our collaboration partnerships, including licensing revenue, product supply revenue and non-cash royalty revenue related to the sale of future royalties. (2) Cost of product sales includes the cost of commercial goods sold to our Customers, such as the cost of materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process and indirect overhead costs. (3) Other cost of revenue includes the cost of materials sold to our collaboration partners under product supply agreements, certain costs related to capacity expansion at current and future CMOs and payments due to AstraZeneca. As of the end of the 2025 second quarter, the maximum $ 75.0 million royalty obligation under the AstraZeneca Termination Agreement had been fully recognized. (4) Research and development, selling and general administrative expenses herein do not include certain allocated items, such as stock-based compensation expenses. (5) Other segment expenses primarily consists of allocated facilities, information technology, and employee costs of approximately $ 14.8 million, $ 16.9 million and $ 12.3 million in 2025, 2024 and 2023, respectively. (6) Other reconciliation items includes interest expense, non-cash interest expense related to the sale of future royalties, provision for income taxes and other income, net. NOTE 18. NET LOSS PER SHARE Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period and excludes any dilutive effects of stock-based awards. Diluted net loss per common share is computed giving effect to all potential dilutive common shares, including common stock issuable upon exercise of stock options, unvested restricted stock units and ESPP shares issuable pursuant to the current purchase period. As we had net losses for the years ended December 31, 2025, 2024 and 2023, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share: Year Ended December 31, (in thousands, except per share amounts) 2025 2024 2023 Numerator Net loss $ ( 61,599 ) $ ( 39,136 ) $ ( 66,067 ) Denominator Weighted average common shares outstanding - basic and diluted 241,034 235,233 219,331 Net loss per share of common stock - basic and diluted $ ( 0.26 ) $ ( 0.17 ) $ ( 0.30 ) 97 Table of Co n t e n t s The total numbers of securities that could potentially dilute net income per share in the future that were not considered in the diluted net loss per share calculations because the effect would have been anti-dilutive were as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Options to purchase common stock 29,904 27,800 20,877 Restricted stock units 12,703 7,883 3,086 ESPP shares issuable 165 230 249 Total 42,772 35,913 24,212 The number of potential common shares that would have been included in diluted income per share had it not been for the anti-dilutive effect caused by the net loss, computed by converting these securities using the treasury stock method during the years ended December 31, 2025, 2024 and 2023, was approximately 5.7 million, 9.2 million and 6.3 million, respectively. NOTE 19. COMMITMENTS AND CONTINGENCIES Guarantees and Indemnifications We indemnify each of our officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at our request in such capacity, as permitted under Delaware law and in accordance with our certificate of incorporation and bylaws. The term of the indemnification period lasts as long as an officer or director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity. The maximum amount of potential future indemnification is unlimited; however, we currently hold director and officer liability insurance, which allows the transfer of risk associated with our exposure and may enable us to recover a portion of any future amounts paid. We believe that the fair value of these indemnification obligations is minimal. Accordingly, we have not recognized any liabilities relating to these obligations for any period presented. Legal Proceedings and Claims On December 7, 2021 and March 29, 2022, two verified shareholder derivative lawsuits were filed in the U.S. District Court for the Northern District of California purportedly on behalf of Ardelyx against certain of Ardelyx’s executive officers and members of our board of directors, captioned Go v. Raab, et al., Case No. 4:21-cv-09455-HSG, and Morris v. Raab, et al., Case No. 4:22-cv-01988-JSC (together, the Go and Morris actions). The complaints allege that the defendants’ violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets for personally making and/or causing Ardelyx to make materially false and misleading statements regarding the Company’s business, operations and prospects. The complaint seeks contribution under Sections 10(b) and 21D of the Exchange Act from two executive officers. On January 19, 2022 and April 27, 2022, the court granted the parties’ stipulation to stay the Go and Morris actions, respectively, until resolution of the motion(s) to dismiss in the lawsuits captioned Strezsak v. Ardelyx, Inc., et al., Case No. 4:21-cv-05868-HSG and Siegel v. Ardelyx, Inc., et al., Case No. 5:21-cv-06228-HSG (together, the Securities Class Actions). On October 25, 2022, the parties filed a stipulation to consolidate and stay the Go and Morris actions, and on October 27, 2022, the court consolidated the Go and Morris actions and stayed the consolidated action pending resolution of the anticipated motion(s) to dismiss in the Securities Class Action. The Securities Class Actions were voluntarily dismissed on March 5, 2025. The court dismissed the Go and Morris actions on April 30, 2025. On July 17, 2024, in partnership with the AAKP and the NMQF, we filed a lawsuit in the U.S. District Court for the District of Columbia against CMS, claiming that CMS has violated its statutory and regulatory authority under MIPPA, which established the ESRD PPS bundled payment system for dialysis services in 2008. Specifically, the lawsuit claims that moving XPHOZAH, along with all oral-only drugs, into the ESRD PPS is inconsistent with MIPPA’s statutory provision, and contradicts CMS’s own regulations. XPHOZAH and other oral-only drugs are not administered by dialysis providers and cannot be taken during the delivery of maintenance dialysis. On November 8, 2024, the U.S. District Court for the District of Columbia granted defendants’ Motion to Dismiss and denied plaintiffs’ Motion for Preliminary Injunction, or in the Alternative, for Expedited Summary Judgment. Following the District Court’s denial of plaintiffs’ Motion to Alter or Amend the Judgment, or in the Alternative, for an Injunction Pending Appeal, plaintiffs filed an Emergency Motion for an Administrative Stay and Injunction Pending Appeal, which was denied by the United States Court of Appeals for the District of Columbia Circuit. Appellants filed an initial brief in the appeal on February 4, 2025; Appellees filed an initial brief on March 6, 2025; and Appellants filed a reply brief on March 27, 2025. Both Appellees and Appellants filed a final brief on April 10, 2025. Oral argument in the case was heard on September 25, 2025. 98 Table of Co n t e n t s On August 16, 2024, a complaint was filed against us in the U.S. District Court of Massachusetts, captioned Yarborough v. Ardelyx, Inc., et al., No. 24-cv-12119 (D. Mass.). The complaint names the Company, Michael Raab, and Justin Renz as defendants and alleges violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, related to our announcement on July 2, 2024 that it had chosen not to file an application for Transitional Drug Add-on Payment Adjustment for XPHOZAH (the Yarborough Action). The plaintiffs seek damages and interest, and an award of costs, including attorneys’ fees. The Court appointed Tate Wood as lead plaintiff on October 30, 2024. The lead plaintiff filed an amended complaint on January 13, 2025, in which he added Susan Rodriguez, Laura Williams and Elizabeth Grammer as additional defendants and removed Justin Renz as a defendant. The lead plaintiff purports to bring claims on behalf of all those who acquired Ardelyx common stock between February 22, 2024 and July 1, 2024. Defendants filed a motion to dismiss the amended complaint on March 14, 2025. Plaintiffs filed a response on May 13, 2025. Defendants filed a reply in support of their motion to dismiss on June 23, 2025. A hearing on the motion to dismiss was held on September 25, 2025, and on December 24, 2025, the Court granted defendants’ motion to dismiss and issued an order dismissing the case with prejudice. On January 21, 2026, Plaintiffs appealed the District Court’s decisions to the United States Court of Appeals for the First Circuit. On September 6 and 13, 2024, certain Ardelyx shareholders filed two verified derivative complaints purportedly on behalf of the Company in the United States District Court for the District of Massachusetts alleging violations of Sections 10(b) and/or 14(a) of the Exchange Act, breaches of fiduciary duty, unjust enrichment, waste, and aiding and abetting breaches of fiduciary duty against certain members of our board of directors and management based on substantially the same factual allegations in the Yarborough Action. The complaints seek unspecified damages and corporate governance reforms, as well as costs and attorneys’ fees. On September 25, 2024, the Court consolidated the two derivative actions into the case In re Ardelyx, Inc. Stockholder Derivative Litigation, Case No. 1:24-cv-12302-LTS (D. Mass.). On November 7, 2024, the Court stayed the consolidated derivative action pending resolution of any and all motion(s) to dismiss in the Yarborough Action. We believe the plaintiffs’ claims are without merit. From time to time, we may be involved in legal proceedings arising in the ordinary course of business. As of December 31, 2025, there is no litigation pending that would reasonably be expected to have a material adverse effect on our results of operations and financial condition. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.