What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-13 compared with 2021-05-06 · 81 added, 68 removed, 177 unchanged (46% of the section changed)

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Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled “Risk Factors.” These forward-looking statements speak only as of the date hereof.

Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason.

Except as required by law, we assume no obligation to update or revise these forward-looking

statements for any reason.

Unless the context requires otherwise, the terms “Ardelyx”, “Company”, “we”, “us”, and “our” refer to Ardelyx, Inc.

We are a specialized biopharmaceutical company focused on discovering, developing and commercializing innovative first-in-class medicines to enhance the lives of patients with kidney and cardiorenal diseases.

We are a biopharmaceutical company focused on the discovery, development, and commercialization of innovative first-in-class medicines to improve treatment for people with kidney and cardiorenal diseases.

This includes patients with chronic kidney disease ("CKD") on dialysis suffering from elevated serum phosphorus, or hyperphosphatemia;

and CKD patients and/or heart failure patients with elevated serum potassium, or hyperkalemia.

Tenapanor has a unique mechanism of action and acts locally in the gut to inhibit the sodium hydrogen exchanger 3, or NHE3.

Tenapanor has a unique mechanism of action and acts locally in the gut to inhibit the sodium hydrogen exchanger 3 ("NHE3").

This results in the tightening of the epithelial cell junctions, thereby significantly reducing paracellular uptake of phosphate, the primary pathway of phosphate absorption.

OUR PRODUCT PIPELINE

A New Approach for The Control of Serum Phosphorus in CKD Patients on Dialysis

A New Approach for The Control of Serum Phosphorus in Adult Patients with CKD on Dialysis

Our portfolio is led by the development of tenapanor, a first-in-class medicine for the control of serum phosphorus in adult patients with CKD on dialysis.

Tenapanor for the control of serum phosphorus has a unique mechanism of action and acts locally in the gut to inhibit the sodium hydrogen exchanger 3 (“NHE3”).

Tenapanor for the control of serum phosphorus has a unique mechanism of action and acts locally in the gut to inhibit the NHE3.

This results in the tightening of the epithelial cell junctions, thereby significantly reducing paracellular uptake of phosphate, the primary pathway of phosphate absorption.

On April 29, 2021, the U.S.

Food and Drug Administration (“FDA”) determined that a submission we made in response to an information request from the FDA constituted a major amendment to our New Drug Application (“NDA”) for tenapanor for the control of serum phosphorus, resulting in a three-month extension of the PDUFA date to July 29, 2021.

The FDA’s information request included a request for additional analyses of our clinical data.

On July 28, 2021, we received a Complete Response Letter ("CRL") from the U.S.

Food and Drug Administration ("FDA") regarding our New Drug Application ("NDA") for the control of serum phosphorus in adult patients with CKD on dialysis.

According to the CRL, while the FDA agrees “that the submitted data provide substantial evidence that tenapanor is effective in reducing serum phosphorus in CKD patients on dialysis,” the FDA characterizes the magnitude of the treatment effect as “small and of unclear clinical significance.” Additionally, the FDA noted that for the application to be approved, we will need “to conduct an additional adequate and well-controlled trial demonstrating a clinically relevant treatment effect on serum phosphorus or an effect on the clinical outcome thought to be caused by hyperphosphatemia in CKD patients on dialysis.” There were no safety, clinical pharmacology/biopharmaceutics, chemistry, manufacturing, and controls or non-clinical issues identified in the CRL.

We intend to request a Type A meeting as soon as possible to discuss the CRL and determine potential paths forward for the approval of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

We have exclusive rights to tenapanor in the U.S.

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The PHREEDOM trial followed a successful monotherapy Phase 3 clinical trial completed in 2017, the BLOCK trial, which achieved statistical significance for the primary endpoint.

The only adverse event reported in these Phase 3 trials in less than 5% of patients was diarrhea, with an incidence rate of 52% in the PHREEDOM trial and 39% in the BLOCK trial, with most incidences in each trial being mild to moderate in nature.

The only adverse event reported in these Phase 3 trials in greater than 5% of patients was diarrhea, with an incidence rate of 52% in the PHREEDOM trial and 39% in the BLOCK trial, with most incidences in each trial being mild to moderate in nature.

PHREEDOM is a one-year study with a 26-week open-label treatment period and a 12-week double-blind, placebo-controlled randomized withdrawal period followed by a 14-week open-label safety extension period.

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These data represent a 58% improvement in the rate of patients who achieve a normal serum phosphorus level, as compared to current treatment practice data as reported in the April 2020 Dialysis Outcomes Practice Patterns Study (“DOPPS”) Practice Monitor.

The DOPPS data demonstrate that, with currently available treatments, only 30% of patients have serum phosphorous levels less than 4.6 mg/dL.

The DOPPS data demonstrate that, with currently available treatments, only 30% of patients have serum phosphorous

levels less than 4.6 mg/dL.

The only adverse event reported in greater than 5% of patients in NORMALIZE was diarrhea, with an incidence rate of 23.3%.

In September 2019, we reported positive results from the AMPLIFY trial, a Phase 3 study evaluating tenapanor in patients with CKD on dialysis who had uncontrolled hyperphosphatemia despite phosphate binder treatment.

In September 2019, we reported positive results from the AMPLIFY trial, a Phase 3 study evaluating tenapanor in adult patients with CKD on dialysis who had uncontrolled hyperphosphatemia despite phosphate binder treatment.

In this trial, approximately twice the number of patients achieved the serum phosphorus treatment goal of less than 5.5 mg/dL with tenapanor and phosphate binders versus phosphate binders alone.

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While currently available therapies are all ion exchange agents, RDX013 is a first in class approach that exerts its effects by amplifying the underlying pathways of potassium secretion in the colon.

Since commencing operations in October 2007, substantially all our efforts have been dedicated to our research and development (“R&D”) activities, including developing our clinical product candidate tenapanor and developing our proprietary drug discovery and design platform.

RDX020 Program:

Small molecule for Treating Metabolic Acidosis

We have an ongoing discovery program targeting the inhibition of intestinal bicarbonate exchange for the treatment of metabolic acidosis, a highly prevalent comorbidity in CKD patients that is strongly correlated with disease progression and adverse outcomes.

We have identified lead compounds that are potent, selective and proprietary inhibitors of bicarbonate secretion.

Since commencing operations in October 2007, substantially all our efforts have been dedicated to our research and development (“R&D”) activities, including developing tenapanor and developing our proprietary drug discovery and design platform.

We have not generated any revenues from product sales.

As of March 31, 2021, we had an accumulated deficit of $587.9 million.

As of June 30, 2021, we had an accumulated deficit of $633.1 million.

We expect to continue to incur substantial operating losses for the foreseeable future as a result of costs associated with the following activities:

our continued development of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis;

our preparations for, and if approved, the commercialization of tenapanor in the United States for the control of serum phosphorus in adult patients with CKD on dialysis, or for any related indication, including significantly increased personnel costs associated with our commercial team;

efforts to determine and execute upon the best way to address the deficiencies noted in the CRL regarding our NDA for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis, and the execution of such;

preparing for the potential commercialization of tenapanor, including significantly increased personnel costs associated with our commercial team;

the performance of certain activities required as a result of our NDA approval of tenapanor for IBS-C;

the continued development of RDX013 and the advancement of our research programs into the preclinical stage.

To date, we have funded our operations from the sale and issuance of common stock and convertible preferred stock, funds from our collaboration partnerships, which includes license fees, milestones and product supply revenue, as well as funds from our Loan Agreement with Solar Capital Ltd.

To date, we have funded our operations from the sale and issuance of common stock and convertible preferred stock, funds from our

collaboration partnerships, which includes license fees, milestones and product supply revenue, as well as funds from our Loan Agreement with Solar Capital Ltd.

and Western Alliance Bank.

RDX020 Program:

Small molecule for Treating Metabolic Acidosis

We have an ongoing discovery program targeting the inhibition of bicarbonate exchange inhibitor for the treatment of metabolic acidosis, a highly prevalent comorbidity in CKD patients that is strongly correlated with disease progression and adverse outcomes.

We have identified lead compounds that are potent, selective and proprietary inhibitors of bicarbonate secretion.

Impact of COVID-19

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For a discussion of risks of COVID-19 relating to our business, see “Part II:

Other Information-Item 1A.- Risk Factors- Risks Related to Our Business- The ongoing COVID-19 pandemic, or any other outbreak of epidemic diseases, or the perception of their effects, could have a material adverse effect on our business, financial condition, results of operations or cash flows .” As of the date of issuance of this financial report, we are not aware of any specific event or circumstance that would require updates to our estimates and

judgments or revisions to the carrying value of our assets or liabilities.

These estimates may change as new events occur and additional information is obtained.

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The critical accounting policies that we believe impact significant judgments and estimates used in the preparation of our financial statements presented in this report are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K filed with the SEC on March 8, 2021.

There have been no significant changes to our critical accounting policies as disclosed in our most recently filed Annual Report on Form 10-K during the three months ended March 31, 2021.

There have been no significant changes to our critical accounting policies as disclosed in our most recently filed Annual Report on Form 10-K during the three and six months ended June 30, 2021.

Recent Accounting Pronouncements

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We expect that any revenue we generate will fluctuate in future periods as a result of, among other factors:

whether we receive regulatory approval for tenapanor for the control of serum phosphorus in CDK patients on dialysis, and if such approval is received, the timing of such approval and the extent to which we are successful in our efforts to commercialize tenapanor for such indication; the timing and progress of goods and services provided pursuant to our current or future collaborative partnerships;

the extent to which we are successful in our efforts to commercialize tenapanor for such indication; the timing and progress of goods and services provided pursuant to our current or future collaborative partnerships;

our or our collaborators’ achievement of preclinical, clinical, regulatory or commercialization milestones, to the extent achieved;

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and the extent to which any of our product candidates are approved and successfully commercialized by a collaboration partner.

If our current collaboration partners or any future collaboration partners fail to obtain regulatory approval for tenapanor, our ability to generate future revenue from our product sales or from our collaborative arrangements, and our results of operations and financial position, would be materially and adversely affected.

If our current

collaboration partners or any future collaboration partners fail to obtain regulatory approval for tenapanor, our ability to generate future revenue from our product sales or from our collaborative arrangements, and our results of operations and financial position, would be materially and adversely affected.

Our past revenue performance is not necessarily indicative of results to be expected in future periods.

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The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time-consuming.

On April 29, 2021, the FDA determined that a submission we made in response to an information request from the FDA constituted a major amendment to our NDA for tenapanor for the control of serum phosphorus, resulting in a three-month extension of the PDUFA date to July 29, 2021.

The FDA’s information request included a request for additional analyses of our clinical data.

The FDA may act on our application either by issuing an approval letter or by issuing a Complete Response Letter (“CRL”).

Should we wish to pursue our application after receiving a CRL, we can, if possible, resubmit the application with information that addresses the questions or issues identified by the FDA in order to support approval.

Resubmissions are subject to review period targets, which vary depending on the underlying submission type and the content of the resubmission.

On July 28, 2021, we received a CRL from the FDA regarding our NDA for the control of serum phosphorus in adult patients with CKD on dialysis.

We may not succeed in achieving marketing approval for our product candidates, including tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

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Other general and administrative expenses include facility related costs and professional fees for legal, accounting and audit, investor relations, other consulting services and allocated facility-related costs not otherwise included in research and development expenses.

We anticipate that our general and administrative expenses will increase in the future primarily because of increased pre-commercial and commercial activities, personnel costs and professional fees for services to support the potential launch and commercialization of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

We anticipate that our general and administrative expenses will increase in the future primarily because of increased commercial activities, personnel costs and professional fees for services to support the launch and commercialization of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

Interest Expense

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The results of operations are not necessarily indicative of the results to be expected for the year ending December 31, 2021, for any other interim period, or for any other future year.

Comparison of the three months ended March 31, 2021 and 2020

Below is a summary of our total revenue (dollar amounts in thousands):

Three Months Ended March 31, Change

Comparison of the three and six months ended June 30, 2021 and 2020

Below is a summary of our total revenue (dollars in thousands):

Three Months Ended

June 30, Change

2020 Six Months Ended June 30, Change

2021 2020 $ % 2021 2020 $ %

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Product supply revenue — 5 (5) (100.0) % 126 43 83 193.0 %

Licensing revenue 5,002 — 5,002 (a)

Licensing revenue 3 706 (703) (99.6) % 5,005 706 4,299 608.9 %

Total revenues $ 1,313 $ 1,836 $ (523) (28.5) % $ 7,895 $ 3,049 $ 4,846 158.9 %

(a) Percent change is not meaningful.

The increase to total revenues during the three months ended March 31, 2021 as compared to the same period in 2020 is primarily attributable to a $5.0 million development milestone which we earned upon the initiation by KKC of phase 3 clinical studies in Japan to evaluate tenapanor for hyperphosphatemia.

There was no comparable revenue during the three months ended March 31, 2020.

The decrease to total revenues during the three months ended June 30, 2021 as compared to the same period in 2020 is primarily attributable to a $0.7 million development milestone which was achieved and recognized as revenue in the prior year pursuant to the Knight Agreement.

There was no comparable revenue during the three months ended June 30, 2021.

The increase to total revenues during the six months ended June 30, 2021 as compared to the same period in 2020 is primarily attributable to a $5.0 million development milestone which we earned during three months ended March 31, 2021 upon the initiation by KKC of phase 3 clinical studies in Japan to evaluate tenapanor for hyperphosphatemia.

Operating Expenses

Below is a summary of our operating expenses (dollars in thousands):

Three Months Ended March 31, Change

Three Months Ended

June 30, Change

2020 Six Months Ended June 30, Change

2021 2020 $ % 2021 2020 $ %

Cost of revenue $ 1,000 $ — $ 1,000 (a)

Cost of revenue $ — $ 141 $ (141) (100.0) % $ 1,000 $ 141 $ 859 609.2 %

Research and development 26,021 18,864 7,157 37.9 % 46,477 34,708 11,769 33.9 %

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Total operating expenses $ 46,145 $ 26,043 $ 20,102 77.2 % $ 84,732 $ 49,025 $ 35,707 72.8 %

(a) Percent change is not meaningful.

Cost of revenue

The increase in cost of revenue for the three months ended March 31, 2021 was for payment due to AstraZeneca under the AZ Termination Agreement related to the development milestone we earned upon the initiation by KKC of phase 3 clinical studies in Japan to evaluate tenapanor for hyperphosphatemia.

We did not incur any cost of revenue under the AZ termination Agreement during the three months ended June 30, 2021.

The increase in cost of revenue for the six months ended June 30, 2021 was for payment due to AstraZeneca under the AZ Termination Agreement related to the development milestone we earned upon the initiation by KKC of phase 3 clinical studies in Japan to evaluate tenapanor for hyperphosphatemia.

Research and Development

Below is a summary of our research and development expenses (dollars in thousands):

Three Months Ended March 31, Change

Three Months Ended

June 30, Change

2020 Six Months Ended June 30, Change

2021 2020 $ % 2021 2020 $ %

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Total research and development expenses $ 26,021 $ 18,864 $ 7,157 37.9 % $ 46,477 $ 34,708 $ 11,769 33.9 %

The increase in our external R&D expenses for the three months ended March 31, 2021 is primarily the result of clinical study costs from the advancement of our OPTIMIZE study which were partially offset by lower costs for the PHREEDOM clinical study.

The increase in our employee-related expenses for the three months ended March 31, 2021 is related to recruiting, compensation and benefits expenses for our research and development workforce.

The increase in our external R&D expenses for the three and six months ended June 30, 2021 is primarily the result of clinical study costs from the advancement of our OPTIMIZE study which were partially offset by lower costs for the PHREEDOM clinical study.

The increase in our employee-related expenses for the three months ended June 30, 2021 is related to recruiting, compensation and benefits expenses for our research and development workforce.

General and Administrative

The increase in general and administrative expenses for the three months ended March 31, 2021 was primarily due to an increase in costs associated with building and staffing our commercial infrastructure and teams as we prepare for the U.S.

The increase in general and administrative expenses for the three and six months ended June 30, 2021 was primarily due to an increase in costs associated with building and staffing our commercial infrastructure and teams as we prepared for the U.S.

launch of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

The increase consisted of headcount and related personnel costs and an increase in external spending for disease awareness initiatives, commercial infrastructure and strategy, partially offset by a decrease in stock-based compensation costs related to performance-based restricted stock units.

Other Income (Expense), net

Below is a summary of our other income (expense), net (dollars in thousands):

Three Months Ended March 31, Change

Other Income, net

Below is a summary of our other income, net (dollars in thousands):

Three Months Ended

June 30, Change

2020 Six Months Ended June 30, Change

2021 2020 $ % 2021 2020 $ %

Interest expense $ (1,202) $ (1,226) $ 24 (2.0) % $ (2,302) $ (2,583) $ 281 (10.9) %

Other income (expense), net (49) 753 (802) (106.5) %

Total other income (expense), net $ (1,149) $ (604) $ (545) 90.2 %

Other income, net 847 477 370 77.6 % 798 1,230 (432) (35.1) %

Total other income, net $ (355) $ (749) $ 394 (52.6) % $ (1,504) $ (1,353) $ (151) 11.2 %

Interest Expense

The decrease in interest expense for the three months ended March 31, 2021 was primarily due to lower interest rates on our variable-rate term loan.

The decrease in interest expense for the three and six months ended June 30, 2021 was primarily due to lower interest rates on our variable-rate term loan.

Other Income, net

The decrease in other income (expense), net for the three months ended March 31, 2021 was primarily due to a decrease in investment income and an increase to the exit fee accretion related to our term loan agreement.

The changes in other income, net for the three and six months ended June 30, 2021 were primarily due to revaluation of our derivative liability related to our term loan agreement following receipt of the FDA CRL on July 28, 2021 in the amount of $0.7 million and decreases in investment income.

Liquidity and Capital Resources

Below is a summary of our cash, cash equivalents and marketable securities (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Cash and cash equivalents $ 86,745 $ 91,032

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Total liquid funds $ 171,809 $ 188,598

As of March 31, 2021, we had cash, cash equivalents and marketable securities totaling $178.2 million compared to $188.6 million as of December 31, 2020.

As of June 30, 2021, we had cash, cash equivalents and marketable securities totaling $171.8 million compared to $188.6 million as of December 31, 2020.

In July 2020, we filed a Form S-3 registration statement, which became effective in August 2020, containing (i) a base prospectus for the offering, issuance and sale by us of up to a maximum aggregate offering price of $250.0 million of our common stock, preferred stock, debt securities, warrants and/or units, from time to time in one or more offerings;

and (ii) a prospectus supplement for the offering, issuance and sale by us 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 a sales agreement with Jefferies LLC, deemed to be “at the market offerings.” During the three months ended March 31, 2021, we sold 4.9 million shares of our common stock for aggregate gross proceeds of $35.0 million at a weighted average price of $7.09 per share under the Open Market Sales Agreement.

In aggregate during the life of the Open Market Sales Agreement, and as of March 31, 2021, we have sold 8.2 million shares of our common stock for gross proceeds of $56.7 million at a weighted average sales price of approximately $6.91 per share.

and (ii) a prospectus supplement for the offering, issuance and sale by us 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 a sales agreement with Jefferies LLC, deemed to be “at the market offerings.” During the three months ended June 30, 2021, we sold 9.0 million shares of our common stock for aggregate gross proceeds of $63.8 million at a weighted average price of $7.10 per share under the Open Market Sales Agreement.

In aggregate during the life of the Open Market Sales Agreement, we sold 8.2 million shares of our common stock between the dates of November 13, 2020 through February 19, 2021 and 4.0 million shares between the dates of May 11, 2021 through June 18, 2021 for a cumulative total of 12.2 million shares of our common stock for gross proceeds of $85.4 million at a weighted average sales price of approximately $6.98 per share.

Pursuant to the Open Market Sales Agreement, Jefferies, as sales agent, receives a commission of up to 3.0% of the gross sales price for shares of common stock sold under the Open Market Sales Agreement.

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Funding Requirements

We believe that our existing capital resources as of March 31, 2021 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months following our financial statement issuance date.

We believe that our existing capital resources as of June 30, 2021 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months following our financial statement issuance date.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

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There are numerous risks and uncertainties associated with research, development and commercialization initiatives, and actual results could vary materially as a result of a number of factors, many of which are outside of our control.

Failure to raise sufficient capital when needed or generate product revenue will further impact our ability to pursue our business strategies and could require us to further delay, scale back or discontinue one or more of our product development programs, commercialization efforts, or other aspects of our business plans.

On July 28, 2021, we received a CRL from the FDA regarding our NDA for the control of serum phosphorus in adult patients with CKD on dialysis in which the FDA noted additional requirements would need to be met in order to obtain approval of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

In addition, on July 29, 2021 we entered into a Fourth Amendment to our Term Loan Agreement which extended the period of time that we are permitted to make interest-only payments on the Term Loan to November 1, 2021 and our Board of Directors approved, and on August 2, 2021 we began implementing, a restructuring plan to better align our workforce and anticipated commercial and development spend with our capital resources and the needs of our business following the receipt of the CRL.

For additional information see Note 12, Subsequent Events, in the notes to our unaudited condensed financial statements in Part I, Item 1, Notes to Condensed Financial Statements, of this Quarterly Report on Form 10-Q.

Our future capital requirements are difficult to forecast and will depend on many factors, including:

• the FDA’s actions and decisions with respect to the NDA submitted to the FDA on June 30, 2020 to request marketing authorization for tenapanor for the control of serum phosphorus in adult CKD patients on dialysis, including the FDA’s actions after the three-month extension of the PDUFA date to July 29, 2021;

• our ability to successfully commercialize tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis or for another other related indication, if approved, either alone or with one or more collaboration partners;

• the sales price and the availability of adequate third-party reimbursement for tenapanor, if approved;

• our ability to identify a path to address the deficiencies noted in the CRL regarding our NDA that is achievable in terms of clinical endpoints, time and cost;

• our ability to successfully commercialize tenapanor for any approved indication, either alone or with one or more collaboration partners;

• the sales price and the availability of adequate third-party reimbursement for tenapanor, if commercialized;

• the manufacturing costs of our product candidates, and the availability of one or more suppliers for our product candidates at reasonable costs, both for clinical and commercial supply;

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• the costs of filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights, including litigation costs and the outcome of such litigation, including costs of defending any claims of infringement brought by others in connection with the development, manufacture or commercialization of tenapanor or any of our product candidates;

• the payment of interest and principal related to our loan and security agreement entered into with Solar Capital and Western Alliance Bank in May 2018, as amended in October 2020.

• the payment of interest and principal related to our loan and security agreement entered into with Solar Capital and Western Alliance Bank in May 2018, as amended in October 2020, March 2021, May 2021 and July 2021.

Please see the risk factors set forth in Part II, Item 1A, Risk Factors, in this Quarterly Report on Form 10-Q for additional risks associated with our capital requirements.

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The following table summarizes our cash flows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash used in operating activities $ (78,493) $ (43,968)

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Cash Flows from Operating Activities

Net cash used in operating activities during the three months ended March 31, 2021 increased by $19.3 million as a result of our increased net loss for the period.

Net cash used in operating activities during the three months ended June 30, 2021 increased by $34.5 million as a result of our increased net loss for the period.

The increased net loss was primarily driven by costs associated with building and staffing our commercial infrastructure and teams as we prepare for the U.S.

launch of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

An increase of $12.7 million of cash used in prepaid expenses and other assets which was primarily for prepayments for raw materials and production of tenapanor also contributed to the increase in net cash used during the three months ended March 31, 2021.

An increase of $5.2 million of cash used in prepaid expenses and other assets which was primarily for prepayments for raw materials and production of tenapanor also contributed to the increase in net cash used during the three months ended June 30, 2021.

Cash Flows from Investing Activities

Net cash provided by investing activities increased by $53.4 million as a our investment maturities increased to fully offset the cost to purchase investments.

During the three months ended March 31, 2020, investment purchases exceeded maturities by approximately $50.9 million.

Net cash provided by investing activities increased by $48.2 million as our investment maturities increased to fully offset the cost to purchase investments.

During the three months ended June 30, 2021, investment purchases exceeded maturities by approximately $37.4 million.

Cash Flows from Financing Activities

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Off-Balance Sheet Arrangements

As of March 31, 2021 and 2020, respectively, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K as promulgated by the SEC.

As of June 30, 2021 and 2020, respectively, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K as promulgated by the SEC.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis