What changed in this filing

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Item 1A. Risk Factors

2026-08-06 compared with 2026-04-30 · 136 added, 67 removed, 1020 unchanged (17% of the section changed)

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Risks Related to our Financial Condition and Capital Requirements

We have incurred losses in each year since our inception, and if we are unable to continue to increase revenue and/or, depending upon our pursuit of future business opportunities, we may not achieve expected cash flow positivity, and even if we do, we may not be able to sustain cash flow positivity quarter over quarter and year over year.

We have incurred losses in each year since our inception, and if we are unable to continue to increase revenue and/or, if we pursue future business opportunities, we may not achieve cash flow positivity when expected or at all, and even if we do, we may not be able to sustain cash flow positivity quarter over quarter and year over year.

In March 2022, we commenced the commercialization of our first product, IBSRELA ® (tenapanor) for the treatment of IBS-C in adult patients.

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We continue to incur commercialization, development and additional expenses related to our ongoing operations and pursuit of future business opportunities.

As of March 31, 2026, we had an accumulated deficit of $984.5 million.

As of June 30, 2026, we had an accumulated deficit of $1.0 billion.

Our prior losses, combined with any future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

If we are unable to continue to increase revenue for IBSRELA and XPHOZAH, and/or if we elect to pursue future business opportunities to strengthen our pipeline, we may not achieve expected cash flow positivity, and even if we do, we may not be able to sustain cash flow positivity quarter over quarter and year over year.

If we are unable to continue to increase revenue for IBSRELA and XPHOZAH, and/or if we elect to pursue future business opportunities to strengthen our pipeline, we may not achieve cash flow positivity when expected or at all, and even if we do, we may not be able to sustain cash flow positivity quarter over quarter and year over year.

Our ability to achieve and sustain cash flow positivity quarter over quarter and year over year depends heavily on our ability to successfully commercialize IBSRELA and XPHOZAH and on the decisions we may make to expand our pipeline through internal investment and/or acquiring external assets.

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• the extent to which the actions of the current administration may result in downward pressure on the price that we receive for IBSRELA and XPHOZAH;

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• establishing and maintaining supply and manufacturing relationships with third parties that can provide an adequate (in amount and quality) supply of product to support the market demand for IBSRELA and XPHOZAH;

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The inclusion of XPHOZAH in the ESRD PPS creates additional uncertainty as to the commercial opportunity for XPHOZAH.

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D;

In addition, CMS’ March 27, 2026 operational guidance reiterating that ESRD facilities are expected by CMS to furnish XPHOZAH under the ESRD PPS bundled payment regardless of manufacturer distribution preferences could adversely affect XPHOZAH revenue.

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is not available under Medicare Part D;

this resulted in a negative and material impact on our XPHOZAH revenue in 2025;

and the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS ” below.

If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund investments we may elect to make in building our pipeline, we will not be able achieve or, if achieved, to sustain cash flow positivity, and our liquidity, financial condition, and business prospects may be materially affected.

If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund investments we may elect to make in building our pipeline, we will not be able to achieve or, if achieved, to sustain cash flow positivity, and our liquidity, financial condition, and business prospects may be materially affected.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

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In addition, the future utilization of such NOL and tax credit carryforwards and credits may be subject to limitations, pursuant to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended.

In general, if a corporation undergoes an “ownership change,” generally defined as a cumulative change of more than 50 percentage points (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes

(such as research and development tax credits) to offset its post-change income or taxes may be limited.

We have experienced ownership changes in the past and may experience additional ownership changes in the future, as a result of subsequent changes in our stock ownership, some of which are outside our control.

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• the extent to which we are able to continue to generate and increase product revenue from sales of IBSRELA and XPHOZAH;

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• the extent to which access to XPHOZAH is impacted by the elimination of Medicare Part D coverage for XPHOZAH, which occurred on January 1, 2025, and the extent to which this change and any other regulatory action will interfere with the shared decision-making between healthcare professionals and their patients, regardless of insurance coverage;

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• the extent to which the actions of the current administration may result in downward pressure on the price that we receive for IBSRELA;

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• the size of the treatable patient population;

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• acceptance of XPHOZAH as safe, effective and well-tolerated by patients and the medical community;

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• our ability to manage the commercialization of IBSRELA and XPHOZAH and the complex pricing and reimbursement negotiations that may arise with marketing products containing the same active ingredient at different doses for separate indications;

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The inclusion of XPHOZAH in the ESRD PPS creates additional uncertainty as to the commercial opportunity for XPHOZAH.

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D;

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is not available under Medicare Part D;

this resulted in a negative and material impact on our XPHOZAH revenue in 2025;

XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D;

XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is not available under Medicare Part D;

this resulted in a negative and material impact on our XPHOZAH revenue in 2025;

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We anticipate the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS.

On June 26, 2026, the U.S.

Court of Appeals for the District of Columbia Circuit affirmed dismissal of our lawsuit against CMS regarding the inclusion of XPHOZAH in the ESRD PPS.

Commitments and Contingencies for more information.

In addition, on March 27, 2026, CMS issued operational guidance reiterating that ESRD facilities are expected by CMS to furnish XPHOZAH under the bundled payment, which may limit our ability to effectively pursue alternative distribution approaches for XPHOZAH and negatively impact our XPHOZAH revenue and pace of revenue growth.

The extent to which the inclusion of XPHOZAH in the ESRD PPS will continue to materially and adversely impact our XPHOZAH business is dependent on the following:

• the extent to which this change and any other regulatory action will interfere with the shared decision-making between healthcare professionals and their patients, regardless of insurance coverage;

• the extent to which this change, the March 2026 CMS operational guidance, the status of our lawsuit against CMS and any other regulatory action will interfere with the shared decision-making between healthcare professionals and their patients, regardless of insurance coverage;

• the extent to which the elimination of separate payment for XPHOZAH for Medicare beneficiaries under Medicare Part D will influence the payment decisions of other payors and the extent to which payment for XPHOZAH will continue to be made as a pharmacy benefit for non-Medicare patients.

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IBSRELA and/or XPHOZAH may cause undesirable side effects or have other properties that could limit the commercial success of the products.

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On January 1, 2025, XPHOZAH, along with other oral drugs for ESRD patients on dialysis without injectable or intravenous equivalents, became part of the ESRD PPS and coverage for XPHOZAH and these other oral drugs under Medicare Part D was eliminated.

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D;

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is not available under Medicare Part D;

this resulted in a negative and material impact on our XPHOZAH revenue in 2025;

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Accordingly, in markets outside the U.S., the reimbursement for our products may be reduced compared with the U.S.

and may be insufficient to generate commercially reasonable revenue and profits.

and may be insufficient to generate

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commercially reasonable revenue and profits.

Moreover, increasing efforts by governmental and third-party payors in the U.S.

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Even if our CMOs do not experience problems and commercial manufacturing is achieved, their maximum or available manufacturing capacities may be insufficient to meet commercial demand.

Finding alternative

manufacturers or adding additional manufacturers requires a significant amount of time and involves significant expense.

Finding alternative manufacturers or adding additional manufacturers requires a significant amount of time and involves significant expense.

New manufacturers would need to develop and implement the necessary production techniques and processes, which along with their facilities, would need to be inspected and approved by the regulatory authorities in each applicable territory.

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If the foreign CROs and CMOs we rely on become subject to trade restrictions, sanctions, increased tariffs or other regulatory requirements by the U.S.

government (including designation as a “biotechnology company of concern” under the U.S.

government (including designation as a “biotechnology

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company of concern” under the U.S.

BIOSECURE Act), or if the U.S.

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Any of these occurrences may significantly harm our business, financial condition and prospects.

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In addition, limitations or modifications to study procedures, study visits or data collection, restrictions on key clinical trial activities such as monitoring or auditing, or other restrictions that may affect data analysis activities may require additional assessment and evaluation from IRBs, negatively impact the integrity or completeness of our trial data, the powering of a trial, the integrity or relevance of clinical study endpoints, or impact the timing of availability of results.

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Such foreign CMOs and CROs may be subject to U.S.

legislation, sanctions, trade restrictions and other foreign regulatory requirements which could increase the cost

or reduce the supply of material available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies.

legislation, sanctions, trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies.

An inability to continue to source product from any of these CMOs, which could be due to regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a CMO, labor disputes or shortages, unexpected demands, or quality issues, could adversely affect our ability to satisfy demand for our products, which could adversely and materially affect our product sales and operating results, which could significantly harm our business.

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The Loan Agreement was subsequently amended in August 2022 (the First Amendment), February 2023 (the Second Amendment), October 2023 (the Third Amendment), October 2024 (Fourth Amendment), June 2025 (Fifth Amendment) and April 2026 (Sixth Amendment).

The loan was funded in the amount of $27.5 million on February 23, 2022 and additional amounts of $22.5 million, $50.0 million, $50.0 million and $50.0 million were drawn on October 19, 2023, March 1, 2024, October 29, 2024 and June 30, 2025, respectively.

These are referred to as the Terms A, B, C, D and E Loans.

In connection with the Sixth Amendment, a portion of the $200.0 million in outstanding principal previously allocated among the Term A through C Loans was refinanced with a new Term H Loan, and the interest rate was collectively reduced under all term loans, including the term loans we have the future option to draw from.

We have the option to draw up to an additional $100.0 million, consisting of two separate term loans (the Term F and Term G Loans), each in a principal amount of $50.0 million:

(a) the first of which is available at the Company’s election through June 30, 2026 and (b) the second of which is available at the Company’s election through December 20, 2026.

The loan was funded in the

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amount of $27.5 million on February 23, 2022.

An additional amount of $22.5 million was drawn on October 19, 2023, and an additional $50.0 million was drawn on each of March 1, 2024, October 29, 2024, June 30, 2025 and June 29, 2026, respectively.

These are referred to as the Terms A, B, C, D, E and F Loans, respectively.

As of June 30, 2026, we have the option to draw up to an additional $50.0 million pursuant to the Term G Loan, which is available at the Company’s election through December 20, 2026.

Until we have repaid all funded indebtedness, the Loan Agreement subjects us to various customary covenants, including requirements as to financial reporting and insurance and restrictions on our ability to dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to enter into licensing agreements, to engage in transactions with affiliates, and to encumber our intellectual property.

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we breach any of our covenants under the Loan Agreement, subject to specified cure periods with respect to certain breaches;

the Lender determines that a material adverse change has occurred;

a Lender determines that a material adverse change has occurred;

we or our assets become subject to certain legal proceedings, such as bankruptcy proceedings;

we are unable to pay our debts as they become due;

or we default on contracts with third parties which would permit the Lender to accelerate the maturity of such indebtedness or that could have a material adverse change on us.

or we default on contracts with third parties which would permit a Lender to accelerate the maturity of such indebtedness or that could have a material adverse change on us.

We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness at the time any such event of default occurs.

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In addition to the currently available phosphate binders, we are aware of at least four phosphate binders in development, including AP-301, developed by Alebund Pharmaceutical (Hong Kong) Limited and currently in Phase 3;

VS-505, developed by Vidasym and currently in clinical development;

TS-172, developed by Taisho Pharmaceutical and currently in Phase 3;

and OLC, developed by Unicycive Therapeutics, which has resubmitted its NDA to the FDA for approval via the 505(b)(2) pathway.

VS-505, developed by Vidasym and currently in Phase 2;

and TS-172, developed by Taisho Pharmaceutical and currently in Phase 3.

On June 30, 2026, Unicycive Therapeutics, which is developing OLC, announced the receipt of a Complete Response Letter from the FDA citing manufacturing deficiencies.

Additionally, Alebund is developing AP-306, an inhibitor of phosphate transporters NaPi-2b, PiT-1, and PiT-2, thus far studied in a Phase 2 clinical trial.

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It is possible that our competitors’ drugs may be less expensive and more effective than our product candidates, or may render our product candidates obsolete.

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• increased amortization expenses;

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• difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;

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Furthermore, replacing executives, senior management and other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain marketing approval of and commercialize products.

We may be unable to hire, train or motivate these key personnel on acceptable terms given the intense competition among numerous biopharmaceutical companies for similar personnel, particularly in our geographic regions.

We may be unable to hire, train or motivate these key personnel on acceptable terms given the intense competition among numerous

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biopharmaceutical companies for similar personnel, particularly in our geographic regions.

If we are unable to continue to attract and retain high quality personnel, our ability to grow and pursue our business strategy will be limited.

Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.

The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal data, such as information that we may collect in connection with clinical trials in the U.S.

The global data protection landscape continues to rapidly evolve, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal data, such as information that we may collect in connection with clinical trials in the U.S.

Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards or perception of their requirements may have on our business.

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Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.

As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities.

As our operations and business continue to grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities.

In the U.S., HIPAA imposes, among other things, certain standards relating to the privacy, security, transmission, and breach reporting of individually identifiable health information.

We may obtain health information from third parties (including research institutions from which we obtain clinical

trial data) that are subject to privacy and security requirements under HIPAA.

We may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA.

Depending on the facts and circumstances, we could be subject to significant penalties if we violate HIPAA.

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Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the U.S.

and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain.

and the efficacy and

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longevity of current transfer mechanisms between the EEA, and the United States remains uncertain.

Case law from the Court of Justice of the European Union states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.

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As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we operate our business, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

In addition, we use AI Technologies in our business.

Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply.

Any failure or perceived failure by us or our employees, representatives, contractors, consultants, CROs, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.

Our business may be affected by the evolving regulatory framework for AI Technologies

We use artificial intelligence (AI), machine learning, and automated decision-making technologies, (collectively, AI Technologies) throughout our business, and are making investments in this area.

We expect that increased investment will be required in the future to continuously improve our use of AI Technologies.

As with many technological innovations, there are significant risks involved in developing, maintaining and deploying these technologies, including that AI-generated content, analyses, or recommendations we utilize could be deficient, that our competitors may more quickly or effectively adopt AI capabilities, or that our use of AI or other emerging technologies increases regulatory, cybersecurity and other significant risks.

There can be no assurance that the usage of our investments in such technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability.

In particular, if the models underlying our AI Technologies are:

incorrectly designed or implemented;

trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data, or on data to which we do not have sufficient rights or in relation to which we and/or the providers of such data have not implemented sufficient legal compliance measures;

used without sufficient oversight and governance to ensure their responsible use;

and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats or material performance issues, the performance of our products, services and business, as well as our reputation, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.

We are in varying stages of development in relation to our products and internal business processes involving AI Technologies.

The continuous development, maintenance and operation of our AI Technologies is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects or errors.

For instance, the models underlying AI Technologies can experience decay (also known as “model drift”) in which its performance and accuracy decrease over time without further human intervention to correct such decay.

We may not be successful in our ongoing development and maintenance of these technologies in the face of novel and evolving technical, reputational and market factors.

Our efforts to develop proprietary AI models may increase our operating costs.

Our ability to develop proprietary AI models may be limited by our access to processing infrastructure or training data, and we may be dependent on third-party providers for such resources.

Additionally, our use of AI Technologies in research and development could introduce unique intellectual property risks.

Shifting legal standards creates substantial uncertainty regarding whether AI-generated inventions, chemical structures, or therapies are eligible for patent protection.

If we are unable to obtain or maintain strong patent exclusivity for product candidates developed with the assistance of AI, our competitive position and long-term profitability could be materially harmed.

We also face the risk that the AI tools we utilize could inadvertently ingest third-party proprietary data, exposing us to infringement claims, or that deploying our own proprietary data into these models could compromise our trade secrets.

The regulatory framework for AI Technologies is rapidly evolving as many federal, state, and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations.

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As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.

Failure to appropriately respond to this evolving

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landscape may result in reputational, competitive and business harm as well as litigation and regulatory action and fines, penalties and expenses related thereto.

It is possible that new laws and regulations will be adopted in the United States and in other non-U.S.

jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies.

We may need to expand resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not

consistent across jurisdictions.

We may need to expand resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions.

Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies).

Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.

We and our collaborators, CROs and other contractors and consultants depend on information technology systems, and any failure of these systems could harm our business.

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There can also be no assurance that our and our collaborators’, CROs’, CMOs’, contractors’, consultants’ and other service providers’ cybersecurity risk management program and processes, including policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems, networks and Confidential Information.

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We and certain of our service providers are from time to time subject to cyberattacks and security incidents.

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Although we rely, and will continue to rely, on these third parties to conduct our nonclinical studies and our clinical trials, we remain responsible for ensuring that each of our studies and clinical trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance

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on third parties does not relieve us of our regulatory responsibilities.

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have sought and obtained and may continue to seek and obtain approval to commercialize tenapanor outside of the U.S., and as a result, a variety of risks associated with international operations could materially adversely affect our business.

Our collaboration partners have sought and obtained and may continue to seek and obtain marketing approval for tenapanor outside the U.S.

Our collaboration partners have sought and obtained and may continue to seek and obtain marketing approval for tenapanor outside of the U.S.

Furthermore, we may seek and obtain marketing approval for IBSRELA or XPHOZAH in other territories outside of the U.S.

Additionally, we have contractual agreements with CMOs involving the manufacture of tenapanor API outside of the U.S., and may otherwise engage in business outside of the U.S., including entering into additional contractual agreements with third parties.

We are subject to additional risks related to entering these international business markets and relationships, including:

We are subject to additional risks related to entering into these international business markets and relationships, including:

• different regulatory requirements for drug approvals in foreign countries;

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The extent and duration of any tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and other countries, the response of such countries, exemptions or exclusions that may be granted, and the availability and cost of alternative sources of supply of materials we purchase from companies in other countries targeted with tariffs.

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Any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, may increase the cost of manufacturing our product candidates and platform materials, affect the demand for IBSRELA and XPHOZAH, and import or export of API and finished product.

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We may incur substantial expenses in connection with responding to and recovering from these events, and any of the foregoing could have a material adverse effect on our business, operating results, prospects or financial condition.

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Risks Related to Government Regulation

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Moreover, on January 1, 2025, XPHOZAH, along with other oral drugs for ESRD patients on dialysis without injectable or intravenous equivalents, became part of the ESRD PPS and coverage under Medicare Part D was eliminated.

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D;

See “— XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is not available under Medicare Part D;

this resulted in a negative and material impact on our XPHOZAH revenue in 2025;

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Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

redesigns the Medicare Part D benefit (beginning in 2024);

and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025).

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation;

redesigns the Medicare Part D benefit;

and replaces the Part D coverage gap discount program with a new manufacturer discount program.

CMS has published the negotiated prices for the initial ten drugs, which went into effect in January 2026, and the subsequent 15 drugs, which will first be effective in 2027.

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While it is unclear whether and how these proposals will be implemented, the current administration’s policies are likely to have a negative impact on the

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pharmaceutical industry and on our ability to receive adequate revenues for IBSRELA and XPHOZAH.

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to the lowest price in a group of other countries.

In response, multiple manufacturers have reportedly entered into confidential pricing agreements with the federal government.

In response, multiple manufacturers have entered into confidential pricing agreements with the federal government.

On the other hand, the current administration is pursuing traditional regulatory pathways to impose drug pricing policies and published two proposed regulations in December 2025, referred to as GLOBE and GUARD.

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• injunctions or the imposition of civil or criminal penalties;

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• suspension or revocation of existing regulatory approvals;

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Although we oversee the CMOs, we cannot control the manufacturing process of, and are completely dependent

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on, our CMOs for compliance with the regulatory requirements.

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Qui tam suits, also commonly referred to as “whistleblower suits,” are often

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brought by current or former employees.

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However, a failure or delay in obtaining regulatory approval in one country may have a

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negative effect on the regulatory process in others.

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If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to market our products and adversely impact our financial results.

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Legislative or regulatory healthcare reforms in the U.S.

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Failure to make necessary disclosures and/or to identify overpayments could result in allegations against us under the Federal False Claims Act and other laws and regulations.

The IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation (first due in 2023), as described under “— Current and future healthcare reform legislation, regulation or action by the current administration may increase the difficulty and cost for us to commercialize our approved products and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations.

The IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation, as described under “— Current and future healthcare reform legislation, regulation or action by the current administration may increase the difficulty and cost for us to commercialize our approved products and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations.

” The Medicare Part D rebate, if applicable, will be calculated on the basis of the AMP figures we report pursuant to the MDRP.

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HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may

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pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.

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Requirements under such laws include advance notice of planned price increases, reporting price increase amounts and factors considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies, and new product notice and reporting.

Such legislation could limit the price or payment for IBSRELA and, if launched, XPHOZAH, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers who fail to comply with drug price transparency requirements, including the untimely, inaccurate, or incomplete reporting of drug pricing information.

Such legislation could limit the price or payment for IBSRELA and XPHOZAH, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers who fail to comply with drug price transparency requirements, including the untimely, inaccurate, or incomplete reporting of drug pricing information.

If we are found to have violated state law requirements, we may become subject to penalties or other enforcement mechanisms, which could have a material adverse effect on our business.

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Civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price.

In the event that CMS were to terminate our Medicaid rebate agreement, no federal payments would be available under Medicaid or Medicare for IBSRELA or, if launched, XPHOZAH.

In the event that CMS were to terminate our Medicaid rebate agreement, no federal payments would be available under Medicaid or Medicare for IBSRELA or XPHOZAH.

We cannot offer any assurances that our submissions will not be found to be incomplete or incorrect.

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We may not be able to obtain, maintain and/or enforce our intellectual property or other proprietary rights necessary to our business or in a form that provides us with a competitive advantage.

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Failure to obtain, maintain and/or enforce intellectual property rights necessary to our business and failure to protect, monitor and control the use of our intellectual property rights could negatively impact our ability to compete and cause us to incur significant expenses.

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In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us.

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In addition, the U.S.

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These licenses

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may not be available on acceptable terms, or at all.

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If we or one of our collaboration partners were to initiate legal proceedings against a third party to enforce a patent covering a

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product or product candidate, the defendant could counterclaim that our patent is invalid, unenforceable and/or not infringed.

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Moreover, our competitors could counterclaim that we infringe their intellectual property and may attempt to prevent us from commercializing a product.

Although the composition and use of IBSRELA and XPHOZAH are currently claimed by seven issued patents each that are listed in the FDA’s Orange Book, we cannot assure that we will be successful in defending against third parties asserting that any of our patents are invalid, unenforceable or not infringed by the third parties’ products, or in competing against third parties seeking to introduce generic versions of IBSRELA, XPHOZAH or any of our future products.

Although the composition and use of IBSRELA and XPHOZAH are currently claimed by patents that are listed in the FDA’s Orange Book, we cannot assure that we will be successful in defending against third parties asserting that any of our patents are invalid, unenforceable or not infringed by the third parties’ products, or in competing against third parties seeking to introduce generic versions of IBSRELA, XPHOZAH or any of our future products.

In the U.S., the Hatch-Waxman Act provides non-patent regulatory exclusivity for five years from the date of the first FDA approval of a drug containing an NCE.

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The filing of a patent infringement lawsuit within 45 days after the NCE NDA owner’s receipt of a notice of the Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of 30 months after the NCE NDA owner’s receipt of the Paragraph IV certification notice, a final decision in the infringement case in favor of the ANDA or 505(b)(2) sponsor, or another date established by the court.

There can be no assurances that an ANDA or 505(b)(2) NDA that references our IBSRELA or XPHOZAH NDAs and includes a Paragraph IV certification will not be filed, or that we will be successful in enforcing our Orange Book listed patents against such follow-on product sponsor.

Furthermore, any Paragraph IV litigation, whether settled or litigated to resolution, could involve substantial expense, result in patent invalidation, trigger earlier-than-expected generic entry, or expose us to legal and regulatory challenges under federal and state antitrust laws.

We also rely on trade secret protection and confidentiality agreements to protect proprietary know-how that may not be patentable, processes for which patents may be difficult to obtain and/or enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.

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As a result, we may encounter significant problems in protecting and defending our intellectual property both in the U.S.

If we are unable to prevent material disclosure of the intellectual property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.

If we are unable to prevent material disclosure of the intellectual property related to our technologies to

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third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.

Although we have obtained patent term extension in the U.S.

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For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.

Europe’s new Unified Patent Court may, in particular, present uncertainties for our ability to protect and enforce our patent rights against competitors in Europe.

In 2012, the EU Patent Package regulations were passed with the goal of providing a single pan-European Unitary Patent and a new UPC, for litigation involving European patents.

Implementation of the EU Patent Package entered into force on June 1, 2023.

Under the UPC, all European patents, including those issued prior to ratification of the EU Patent Package, will by default automatically fall under the jurisdiction of the UPC.

The UPC will provide our competitors with a new forum to centrally revoke our European patents and allow for the possibility of a competitor to obtain pan-European injunctions.

It will be several years before we will understand the scope of patent rights that will be recognized and the strength of patent remedies that will be provided by the UPC.

Under the EU Patent Package as currently proposed, we will have the right to opt our patents out of the UPC over the first seven years of the court’s existence, but doing so may preclude us from realizing the benefits of the new unified court.

The European Union’s (EU) new Unified Patent Court (UPC), which took effect on June 1, 2023, may, in particular, present uncertainties for our ability to protect and enforce our patent rights against competitors in Europe, including those based on European patent applications filed after introduction of the new system.

Under the new system, the proprietor of a European patent can opt for that patent to become a unitary patent which will cover all of the EU states that have ratified the Agreement on the Unified Patent Court at that point in time (hereinafter referred to as UPC Countries), and the European patent will then be subject to the jurisdiction of the UPC.

During a transition period of the first seven years of the UPC's existence (which under the current legislation could potentially be extended by the Administrative Committee of the UPC for up to seven additional years), European patent applications can be opted out of the jurisdiction of the UPC, and validated as exclusively national patents in any one or more of the UPC Countries, even if those patents grant after the end of the transition period.

We may decide to opt out future European patents from the UPC, but doing so may preclude us from realizing some benefits of the UPC.

If we do opt a European patent out of the jurisdiction of the UPC, we may decide to opt that European patent back into the jurisdiction of the UPC in the future if we do wish to take advantage of certain benefits of the UPC, but we will only be able to do this if no actions have been brought before a national court in relation to the European patent concerned.

In addition, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European patents could remain under the jurisdiction of the UPC.

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We may decide not to opt out of future European Patents from the UPC, but not opting out will put our European patent under the jurisdiction of the UPC for all UPC Countries and we will still be required to validate the European patent in countries that are not signatories to the unitary patent system, such as Spain, Switzerland and the United Kingdom, and failure to validate would prevent us from securing patent rights in those countries.

European patents that are under the jurisdiction of the UPC may be challenged in a single UPC-based revocation proceeding that could invalidate the patent in all UPC countries.

The UPC will also provide our competitors with a new forum to centrally revoke our European patents, and allow for the possibility of a competitor to obtain pan-European injunction against us in infringement proceedings, in at least all countries which are signatories to the UPC.

Further, because the UPC is a new court system having little established precedent for the court's decisions, there is increased uncertainty regarding the outcome of any patent litigation.

We are unable to predict what impact the new patent regime may have on our ability to exclude competitors in the European market.

In addition, geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors.

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In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees from the United States without consent or compensation.

Consequently, we would not be able to prevent third parties from practicing our inventions in Russia or from selling or

importing products made using our inventions in and into Russia.

Consequently, we would not be able to prevent third parties from practicing our inventions in Russia or from selling or importing products made using our inventions in and into Russia.

Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

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Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets and proprietary information, our agreements may contain certain limited publication rights.

In addition, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.

In addition, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such

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competitor from using that technology or information to compete with us, which could harm our competitive position.

Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are incorporated (inadvertently or not) into the technology of others, or are disclosed or used in violation of these agreements.

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In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.

If we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the

party against whom we have asserted trademark infringement has superior rights to the marks in question.

If we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question.

In this case, we could ultimately be forced to cease use of such trademarks.

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In addition, an employee, advisor or consultant who performs work for us may have obligations to a third party that are in conflict with their obligations to us, and as a result, such third party may claim an ownership interest in the intellectual property arising out of work performed for us.

We are not aware of any threatened or pending claims related to these matters, but in the future, litigation may be necessary to defend against such claims.

We are not aware of any threatened or pending claims related

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to these matters, but in the future, litigation may be necessary to defend against such claims.

If we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, or access to consultants and contractors.

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• announcements regarding coverage and reimbursement for XPHOZAH alone or with other oral ESRD-related drugs without injectable or intravenous equivalents;

• announcements regarding the results of clinical trials we may run evaluating tenapanor for CIC;

RDX10531 or any other product candidates;

• announcements regarding the results of clinical trials we may run evaluating tenapanor for CIC, RDX10531 or any other product candidates;

• announcements relating to our current or future collaboration partnerships;

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• changes in financial estimates or recommendations by securities analysts;

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• trading volume of our common stock;

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These broad market fluctuations may adversely affect the trading price or liquidity of our common stock.

In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against

In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer.

If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business, which could seriously harm our financial position.

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Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from The Nasdaq Global Market or other adverse consequences that would materially harm our business.

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We may be adversely affected by the global economic environment.

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• the required approval of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors;

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• a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

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There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.

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UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

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

What changed 10-Q

Item 1A. Risk Factors