What changed in this filing

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Item 1A. Risk Factors

2021-11-12 compared with 2021-08-13 · 116 added, 141 removed, 793 unchanged (24% of the section changed)

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Summary of Principal Risks Related to Our Business

• We are substantially dependent on the success of our lead product candidate, tenapanor, which may not receive regulatory approval for the control of serum phosphorus in adult patients with CKD on dialysis or for any other related indication (the “Hyperphosphatemia Indication”), and if approved, may not be successfully commercialized for such indication.

• We are substantially dependent on the success of, tenapanor, which may not receive regulatory approval for the control of serum phosphorus in adult patients with CKD on dialysis or for any other related indication (the “Hyperphosphatemia Indication”), and if approved, may not be successfully commercialized for such indication.

On July 28, 2021, we received a complete response letter (“CRL”) from the FDA regarding our New Drug Application (“NDA”) for tenapanor for the Hyperphosphatemia Indication.

According to the CRL, the FDA has determined that the magnitude of the treatment effect observed in our Phase 3 clinical trials was small and unclear of clinical significance.

Additionally, in the CRL, the FDA noted that in order for the NDA 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 adult patients with CKD on dialysis.

While we intend to request a Type A meeting as soon as possible, there can be no assurances that the Type A meeting will result in a clear path to approval of our NDA that is achievable in terms of clinical endpoints, time or cost.

If following the Type A meeting we determine to pursue an additional clinical trial, there can be no assurances that results of the trial will demonstrate a clinically relevant treatment effect, noted by the FDA as being required for approval of the NDA.

If we decide to appeal the issuance of the CRL, there can be no assurances that our request for appeal will be granted, or that, if granted, we will be successful in our appeal.

We held an End-of-Review Type A

meeting (“End of Review Meeting”) in October 2021, with the FDA’s Division of Cardiology and Nephrology (the “Division”).

The End of Review Meeting did not provide a reasonable path forward for resubmission of our NDA.

As a result, we currently expect to submit a Formal Dispute Resolution Request (“FDRR”) by the end of the fourth quarter 2021 in order raise our scientific disagreement above the Division level within FDA’s Center for Drug Evaluation and Research (“CDER”).

There can be no assurances that the Formal Dispute Resolution (“FDR”) process will result in approval of our NDA, or in a clear path to resubmission of our NDA that is achievable in terms of clinical study design, time and cost.

As a result, the regulatory approval process for our NDA is highly uncertain.

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• We have never generated any revenue from product sales and may never be profitable.

Our ability to generate future revenue from product sales or pursuant to milestone payments is dependent upon many factors, including, but not limited to, obtaining regulatory approvals for tenapanor for the control of serum phosphorus or for any other related indication, and establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate supply of product to support the market demand for tenapanor;

Our ability to generate future revenue from product sales or pursuant to milestone payments is dependent upon many factors, including, but not limited to, obtaining regulatory approvals for tenapanor for the Hyperphosphatemia Indication, and establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate supply of product to support the market demand for tenapanor;

and obtaining market acceptance of tenapanor as a viable treatment option for the indications for which it is approved and commercialized.

• We will require substantial additional financing to achieve our goals, and the inability to access this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our efforts to obtain approval for tenapanor and our other product development and platform development activities.

• Third-party payor coverage and reimbursement status of newly-approved products are uncertain.

Failure to obtain or maintain adequate coverage and reimbursement for tenapanor for any indication for which it is commercialized could limit our ability to market tenapanor for the approved indication and decrease our ability to generate revenue.

certain policies of the Biden administration with respect to drug pricing or reimbursement may impact our business and industry.

For example, certain policies of the Biden administration with respect to drug pricing or reimbursement may impact our business and industry.

While there is significant uncertainty related to the insurance coverage and reimbursement of newly approved products in general in the United States, there is additional uncertainty related to insurance coverage and reimbursement for drugs that are marketed to the CKD on dialysis population, as would be tenapanor, if approved, for the Hyperphosphatemia Indication.

If we are successful in obtaining regulatory approval to market tenapanor for the Hyperphosphatemia Indication, our ability to generate and sustain future revenues from sales of tenapanor for such indication, may be dependent upon whether and when tenapanor, along with other oral end-stage renal disease (“ESRD”) related drugs without an injectable or intravenous equivalent, are bundled into the ESRD prospective payment system, and the manner in which such introduction into the ESRD prospective payment system may occur.

• We have hired sales and marketing leadership and employees with technical expertise, and we are required to train, retain and incentivize those sales and marketing personnel.

With the issuance of the CRL by the FDA, the regulatory approval process for our NDA is highly uncertain.

We plan to request a Type A meeting with the FDA to obtain more clarity on the path forward for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

There can be no assurances that we will be successful in retaining our sales and marketing leadership or other key employees through the Type A meeting or thereafter, or that we will be able to replace any such leadership or other sales personnel that may leave the Company.

• Most of our sales and marketing team and certain other key employees hired in anticipation of the receipt of marketing approval by the FDA for tenapanor for the Hyperphosphatemia Indication have been notified that their positions will be eliminated by the end of 2021.

Should we obtain marketing approval for tenapanor for the Hyperphosphatemia Indication, or determine to commercialize tenapanor for IBS-C, we may not be able to rehire or replace such personnel, and as a result we may not be able to commercialize tenapanor for the Hyperphosphatemia Indication, if approved, or for IBS-C if we determine to do so or any such commercialization may be delayed or adversely impacted.

• We rely completely on third parties to manufacture tenapanor and our other product candidates.

If they are unable to comply with applicable regulatory requirements, unable to source sufficient raw materials, experience manufacturing or distribution difficulties or are otherwise unable to manufacture sufficient quantities to meet demand, our commercialization efforts for any approved product, and our development efforts for tenapanor, RDX013 and our other product candidates may be materially harmed.

• We may not be successful in our efforts to develop RDX013 or expand our pipeline of product candidates, as a result of numerous factors, which may include the inability to access capital necessary to fund such efforts on acceptable terms.

• We may not be successful in our efforts to develop RDX013 as a result of numerous factors, which may include the inability to access capital necessary to fund such efforts on acceptable terms.

• The COVID-19 pandemic continues to rapidly evolve.

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In July 2021, we received a CRL from the FDA regarding our NDA for tenapanor for the Hyperphosphatemia Indication.

While we intend to request a Type A meeting as soon as possible, there can be no assurances that the Type A meeting with result in a clear path to approval of our NDA that is achievable in terms of clinical endpoints, time and cost.

Our end of Review Meeting did not provide a reasonable path forward for resubmission of our NDA.

Accordingly, we currently expect to submit a FDRR to raise our scientific disagreement above the Division level within CDER.

There can be no assurances that the FDR process will result in approval of our NDA or in a clear path to resubmission of our NDA that is achievable in terms of clinical study design, time and cost.

We are not profitable and have incurred losses in each year since our inception in October 2007, and we do not know whether or when we will become profitable.

We continue to incur significant research, development and other expenses related to our ongoing operations.

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 we seek to determine the best way to address the deficiencies noted in the CRL regarding our NDA for tenapanor for the Hyperphosphatemia Indication;

prepare for the potential commercialization of, and incur manufacturing and development costs for, tenapanor;

commence commercialization of tenapanor for any approved indication;

incur development costs for RDX013;

and continue our discovery and research activities.

As of September 30, 2021, we had an accumulated deficit of $676.7 million.

We expect to continue to incur substantial operating losses for the foreseeable future as we seek to gain approval for our NDA for tenapanor for the Hyperphosphatemia Indication;

prepare for the potential commercialization of tenapanor for any approved indication;

incur manufacturing and development costs for tenapanor;

and incur development costs for RDX013.

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

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Such net operating losses and tax credits carryforwards may be reduced as a result of certain intercompany restructuring transactions.

In addition, the future utilization of such net operating loss and tax credit carryforwards and credits will be subject to limitations, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that have occurred previously and additional limitations may be applicable as a result of ownership changes that could occur in the future.

In addition, the future utilization of such net operating loss and tax credit carryforwards and credits will be subject to

limitations, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that have occurred previously and additional limitations may be applicable as a result of ownership changes that could occur in the future.

We have never generated any revenue from product sales and may never be profitable.

We received FDA approval for our NDA for tenapanor for the treatment of IBS-C in adults in September 2019.

However, we have not commercialized tenapanor for IBS-C ourselves in the United States and have not entered into a collaboration partnership for such commercialization.

However, to date, we have not commercialized tenapanor for IBS-C ourselves in the United States and have not entered into a collaboration partnership for such commercialization.

We have no other products approved for sale and have received a CRL from the FDA for tenapanor relating to our NDA for the Hyperphosphatemia Indication.

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Our ability to generate future revenue from product sales or pursuant to milestone payments depends heavily on many factors, including but not limited to:

• our ability to address the deficiencies noted in the CRL regarding our NDA for the Hyperphosphatemia Indication and obtain regulatory approvals for tenapanor for such indication, either on our own or with one or more collaboration partners;

• our ability to successfully commercialize tenapanor, which has been approved by the FDA for the treatment of IBS-C in adults, and/or tenapanor for the Hyperphosphatemia Indication, if approved, either on our own or with one or more collaboration partners;

• whether we are successful in our efforts under the FDR process to secure approval for our NDA for tenapanor for the Hyperphosphatemia Indication, or whether we are able during the FDR to reach resolution with the FDA regarding a path to addressing the deficiencies in our NDA noted in the CRL that is achievable in terms of clinical study design, time and cost;

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

• 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 tenapanor for the treatment of IBS-C, and/or, if approved, tenapanor for the Hyperphosphatemia Indication;

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In cases where we are successful in obtaining regulatory approvals to market tenapanor for one or more indications, our revenue will be dependent, in part, upon the size of the markets in the territories for which regulatory approval is granted, the breadth of the indication and the label for which approval is granted, accepted price for the product, the ability to get reimbursement at any price and whether we are commercializing the product or the product is being commercialized by a collaboration partner, and in such case, whether we have royalty and/or co-promotion rights for that territory, and whether any royalty we have a right to receive from a collaboration partner is in excess of the royalty we owe AstraZeneca as a result of the termination of our License Agreement with AstraZeneca in 2015.

See Note 4, Collaboration and Licensing Agreements, in the notes to our financial statements, included in Part II, Item 8, for details on our obligations to AstraZeneca.

See Note 4, Collaboration and Licensing Agreements, in the notes to our financial statements, included in Part I, Item 1, for details on our obligations to AstraZeneca.

While there is significant uncertainty related to the insurance coverage and reimbursement of newly approved products in general in the United States, there is additional uncertainty related to insurance coverage and reimbursement for drugs, like tenapanor for the Hyperphosphatemia Indication, which, if approved, will be marketed for the control of serum phosphorus in adult patients with CKD on dialysis or for another other related indication.

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Failure to obtain or maintain adequate coverage and reimbursement for our products, if approved, could limit our ability to market those products and decrease our ability to generate revenue” below.

Additionally, if the number of patients for the approved indication suitable for tenapanor is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, coverage and reimbursement for tenapanor are not available in the manner and to the extent which we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from the sale of tenapanor, even if approved.

Additionally, if

the number of patients for the approved indication suitable for tenapanor is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, coverage and reimbursement for tenapanor are not available in the manner and to the extent which we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from the sale of tenapanor, even if approved.

Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

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A decline in the value of our common stock could cause our stockholders to lose all or part of their investment.

We will require substantial additional financing to achieve our goals, including our goal of responding to the CRL received from the FDA relating to our NDA for tenapanor for the Hyperphosphatemia Indication and the inability to access this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our efforts to seek and obtain approval for tenapanor for the Hyperphosphatemia Indication, our efforts to commercial tenapanor any approved indications, and our other product development and platform development activities.

We will require substantial additional financing to achieve our goals, including our goal of pursuing a formal dispute resolution process in response to the CRL received from the FDA relating to our NDA for tenapanor for the Hyperphosphatemia Indication and the inability to access necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our efforts to seek and obtain approval for tenapanor for the Hyperphosphatemia Indication, our efforts to commercialize tenapanor any approved indications, and our development activities for RDX013.

Since our inception, most of our resources have been dedicated to our research and development activities, including developing tenapanor and developing our proprietary drug discovery and design platform.

We believe that we will continue to expend substantial resources for the foreseeable future, including, costs associated with our efforts to address the deficiencies in our NDA for the Hyperphosphatemia Indication noted by the FDA in the CRL, costs associated with the commercialization of tenapanor for any approved indication, research and development, conducting preclinical studies and clinical trials for our other programs, including RDX013, obtaining regulatory approvals, scaling our manufacturing processes for our product candidates and sales and marketing.

Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, we cannot reasonably estimate the actual amounts necessary to address the deficiencies in our NDA for the Hyperphosphatemia Indication noted by the FDA in the CRL.

Following the receipt of the CRL, we have implemented two restructuring plans in order to reduce operating costs and to better align our workforce with the needs of our business.

As a result of the second restructuring plan, initiated in October 2021, we will be eliminating all of our research capabilities, along with many positions throughout the Company before the end of 2021.

Notwithstanding the restructurings, we believe that we will continue to expend substantial resources for the foreseeable future, including, costs associated with our efforts to pursue approval for our NDA for the Hyperphosphatemia Indication through the FDR process;

the commercialization of tenapanor for any approved indication;

conducting pediatric clinical trials for tenapanor, if required;

development of RDX013;

and manufacturing for tenapanor and RDX013.

Our future funding requirements will depend on many factors, including, but not limited to:

• 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;

• whether we are successful in our efforts under the FDR process to secure approval for our NDA for tenapanor for the Hyperphosphatemia Indication, or to reach resolution with the FDA regarding a path to address the deficiencies in the NDA noted in the CRL, and the time and cost associated with such path;

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

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• 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;

• the selling and marketing costs associated with tenapanor, including the cost and timing of maintaining our sales and marketing capabilities;

• the selling and marketing costs associated with tenapanor, including the cost and timing of maintaining or rebuilding our sales and marketing capabilities;

• our ability to maintain our existing collaboration partnerships and to establish additional collaboration partnerships, in-license/out-license, joint ventures or other similar arrangements and the financial terms of such agreements;

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• the cash requirements of any future acquisitions or discovery of product candidates;

• the number and scope of preclinical and discovery programs that we decide to pursue or initiate, and any clinical trials we decide to pursue for other product candidates, including RDX013;

• any clinical trials we are required to or decide to pursue for tenapanor or RDX013;

• the time and cost necessary to respond to technological and market developments;

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Additional funds may not be available when we need them on terms that are acceptable to us, or at all.

If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate our research activities, preclinical and clinical trials for our product candidates and our establishment and maintenance of sales and marketing capabilities or other activities that may be necessary to commercialize tenapanor, either alone or with collaboration partners.

If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate our clinical trials for tenapanor or RDX013, our maintenance and/or re-establishment of sales and marketing capabilities or other activities that may be necessary to commercialize tenapanor, either alone or with collaboration partners.

Additionally, our inability to access capital on a timely basis and on terms that are acceptable to us may force us to restructure certain aspects of our business or identify and complete one or more strategic collaborations or other transactions in order to fund the development or commercialization of tenapanor or certain of our product candidates through the use of alternative structures.

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Our business may be adversely affected by these restrictions on our ability to operate our business.

We are permitted to make interest only payments on the loan facility through December 1, 2021, unless we have not received FDA approval for our NDA for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis on or before October 25, 2021, in which case, the period in which we are permitted to make interest only payments shall end on November 1, 2021.

However, we may be required to repay the outstanding indebtedness under the loan facility if an event of default occurs under the loan and security agreement.

We were permitted to make interest only payments on the loan facility through October 31, 2021, with principal repayments commencing on November 1, 2021, and the first such repayment required us to include all payments that would have been due if monthly principal repayment had begun on June 1, 2021.

We may be required to repay the outstanding indebtedness under the loan facility if an event of default occurs under the loan and security agreement.

An event of default will occur if, among other things, we fail to make payments under the loan and security agreement;

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

or we default on contracts with third parties which would permit the Lenders 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 the Lenders 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.

In this case, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant to others’ rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

In this case, we may be required to delay, limit, reduce or terminate clinical trials for tenapanor or RDX013, our maintenance and/or re-establishment of sales and marketing capabilities or other activities that may be necessary to commercialize tenapanor, either alone or with collaboration partners.

The Lenders could also exercise their rights as collateral agent to take possession of and to dispose of the collateral securing the term loans, which collateral includes substantially all of our property (excluding intellectual property, which is subject to a negative pledge).

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Principal Risks Related to Our Business

We are substantially dependent on the success of our lead product candidate, tenapanor.

We are substantially dependent on the success of tenapanor.

In July 2021, we received a CRL from the FDA related to our NDA for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

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On July 28, 2021, we received a CRL from the FDA regarding our NDA for tenapanor for the Hyperphosphatemia Indication.

According to the CRL, the FDA has determined that the magnitude of the treatment effect observed in our Phase 3 clinical trials was small and unclear of clinical significance.

According to the CRL, the FDA has determined that the magnitude of the treatment effect observed in our Phase 3 clinical trials was small and unclear of clinical

significance.

If we decide to appeal the issuance of the CRL, there can be no assurances that our request for appeal will be granted, or that, if granted, we will be successful in our appeal.

As a result, the regulatory approval process for our NDA is highly uncertain.

In October we held an End of Review Meeting with the Division.

The End of Review Meeting did not provide a reasonable path for resubmission of our NDA.

Accordingly, we currently expect to submit a FDRR in the fourth quarter 2021.

There can be no assurances that the FDR process will result in approval of our NDA or a clear path to resolution of the deficiencies in the NDA noted in the CRL that is achievable in terms of clinical study design, time and cost.

As a result, the regulatory approval process for our NDA for the Hyperphosphatemia Indication is highly uncertain.

We may not obtain approval at all, and if we are able to obtain approval, the expense and time to do so could adversely impact our ability to successfully commercialize tenapanor for the Hyperphosphatemia Indication, our business and our results of operations.

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Although tenapanor met the primary endpoints in all of the three Phase 3 clinical trials evaluating tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis, we received a CRL from the FDA in July 2021 indicating that the magnitude of the treatment effect observed in our Phase 3 clinical trials was small and unclear of clinical significance.

We intend to request a Type A meeting as soon as possible.

We intend to submit a FDRR in the fourth quarter 2021.

However, there can be no assurances that we will receive regulatory approval to market tenapanor for the Hyperphosphatemia Indication.

Further, even if approved, it may not be possible to market tenapanor on the basis of certain of the benefits we believe tenapanor possesses.

If the number of patients in the market for tenapanor based on the approved indication or the price that the market can bear is not as significant as we estimate, or if we are not able to secure adequate coverage and reimbursement for tenapanor, we may not generate sufficient revenue from sales of tenapanor for the Hyperphosphatemia Indication, if approved, or for IBS-C, if commercialized.

If the number

of patients in the market for tenapanor based on the approved indication or the price that the market can bear is not as significant as we estimate, or if we are not able to secure adequate coverage and reimbursement for tenapanor, we may not generate sufficient revenue from sales of tenapanor for the Hyperphosphatemia Indication, if approved, or for IBS-C, if commercialized.

There can be no assurance that tenapanor will ever be successfully commercialized or that we will ever generate income from sales of tenapanor.

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Any failure of tenapanor to achieve market acceptance, sufficient third-party coverage or reimbursement, or commercial success for any approved indications would adversely affect our results of operations.

We hired sales and marketing leadership and other key employees in anticipation of the receipt of marketing approval by the FDA for tenapanor for the Hyperphosphatemia Indication.

If we are not able to redeploy and retain those employees while we seek to address the deficiencies identified by the FDA in the CRL received in July 2021, and we are not able to replace any lost personnel we may not be able to commercialize tenapanor for the Hyperphosphatemia Indication, if approved, or such commercialization may be delayed.

Most of our sales and marketing team and certain other key employees hired in anticipation of the receipt of marketing approval by the FDA for tenapanor for the Hyperphosphatemia Indication have been notified that their positions will be eliminated by the end of 2021.

Should we obtain marketing approval for tenapanor for Hyperphosphatemia, or determine to commercialize tenapanor for IBS-C, we may not be able to rehire or replace such personnel, and as a result we may not be able to commercialize tenapanor for the Hyperphosphatemia Indication, if approved, or for IBS-C if we determine to do so or any such commercialization may be delayed or otherwise adversely impacted.

If approved, we currently plan to commercialize tenapanor for the Hyperphosphatemia Indication, on our own.

We have hired sales leadership and sales employees with technical expertise, and we are required to train, retain and incentivize those sales personnel.

Following from the receipt of a CRL from the FDA in July 2021, we executed a reduction in force during which we eliminated a portion of the sales positions that had been filled during the preceding months.

Despite the receipt of the CRL and the reduction in force, we continue to employ sales leadership and sales employees with technical expertise.

Even if we are successful in addressing the deficiencies noted in the CRL and we obtain regulatory approval to market tenapanor for the Hyperphosphatemia Indication, the commercialization of tenapanor for such indication will be substantially delayed from the time we expected when we hired our sales and marketing leadership and other key employees.

There can be no assurances that we will be able to redeploy and retain our existing sales and marketing leadership or other key employees necessary for commercial launch of tenapanor for the Hyperphosphatemia Indication throughout this delay, or that we will be able to replace any such leadership or other sales personnel that may leave the Company.

Redeploying, retaining and incentivizing our commercial personnel throughout this period and thereafter will continue to be expensive and time consuming.

Even if we are able to redeploy and retain our key sales and marketing leadership during this delay, and tenapanor is approved for the Hyperphosphatemia Indication, we have no prior experience in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in managing and retaining a sales organization, including our ability to secure the capital necessary to fund such efforts on acceptable terms, provide adequate training to sales and marketing personnel, comply with regulatory requirements applicable to the marketing and sale of drug products and effectively manage a geographically dispersed sales and marketing team.

If we fail to redeploy, maintain or replace our internal sales, marketing and distribution capabilities, we may need to delay the commercialization of tenapanor for the Hyperphosphatemia Indication, if approved, or such commercialization could be adversely impacted.

Many members of our sales and marketing leadership teams, our sales employees with technical expertise and certain other key

employees necessary to successful commercialize tenapanor for any indication have had their positions eliminated by our restructuring plans adopted in August and October 2021.

Even if we are successful in obtaining regulatory approval to market tenapanor for the Hyperphosphatemia Indication, or if we determine to commercialize tenapanor for IBS-C, there can be no assurances that we will be able to rehire or replace such personnel.

If we fail to rehire or replace our internal sales, marketing and distribution capabilities, or other key employees necessary to successfully commercialize tenapanor, we may need to delay the commercialization of tenapanor for the Hyperphosphatemia Indication, if approved, or the commercialization of tenapanor for IBS-C if sought, or either such commercialization could be adversely impacted.

Third-party payor coverage and reimbursement status of newly-approved products are uncertain.

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The availability and adequacy of coverage and reimbursement by governmental and private payors are essential for most patients to be able to afford treatments such as tenapanor for the Hyperphosphatemia Indication, assuming approval, or tenapanor for IBS-C.

In the event that tenapanor is commercialized, sales will depend substantially, both domestically and abroad, on the extent to which the costs of tenapanor will be paid for by health maintenance, managed care, pharmacy benefit, and similar healthcare management organizations, or reimbursed by government authorities, private health

insurers, and other third-party payors.

If coverage and reimbursement are not available, or are available only to limited levels, we, or our collaboration partners, may not be able to successfully commercialize our product candidates.

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As a result, increasingly high barriers are being erected to the entry of new products.

We rely completely on third parties to manufacture tenapanor and our other product candidates.

If they are unable to comply with applicable regulatory requirements, unable to source sufficient raw materials, experience manufacturing or distribution difficulties or are otherwise unable to manufacture sufficient quantities to meet demand, our commercialization of tenapanor for any approved indication and our development efforts for tenapanor, RDX013 and our other product candidates may be materially harmed.

We rely completely on third parties to manufacture tenapanor and RDX013.

If they are unable to comply with applicable regulatory requirements, unable to source sufficient raw materials, experience manufacturing or distribution difficulties or are otherwise unable to manufacture sufficient quantities to meet demand, our commercialization of tenapanor for any approved indication and our development efforts for tenapanor and RDX013 may be materially harmed.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture tenapanor or any of other our product candidates on a commercial scale, or to manufacture our drug supplies for use in the conduct of our nonclinical and clinical studies.

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Our ability to control the manufacturing process of our product candidates is limited to the contractual requirements and obligations we impose on our contract manufacturer.

Although they are contractually required to so do, we are completely dependent on our contract manufacturing partners for compliance with the regulatory requirements, known as

current Good Manufacturing Practice requirements (“cGMPs”), for manufacture of both active drug substances and finished drug products.

Although they are contractually required to so do, we are completely dependent on our contract manufacturing partners for compliance with the regulatory requirements, known as current Good Manufacturing Practice requirements (“cGMPs”), for manufacture of both active drug substances and finished drug products.

The manufacture of pharmaceutical products requires significant expertise and capital investment.

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Additional Risks Related to Our Business and Industry

We may not be successful in our efforts to develop RDX013 or any other product candidates that are at an early stage of development, or expand our pipeline of product candidates, as a result of numerous factors, which may include the inability to access capital necessary to fund such efforts on acceptable terms .

A key element of our strategy has been focused on the expansion of our pipeline of product candidates utilizing our proprietary drug discovery and design platform and to advance such product candidates through clinical development.

Our inability to access capital in a timely manner or on acceptable terms to fund our early stage product candidates may force us to consider certain restructuring activities to enable the funding of those early assets through the use of alternative structures.

In addition, of the large number of drugs in development, only a small percentage of such drugs successfully complete the FDA regulatory approval process and are commercialized.

Accordingly, even if we are able to continue to fund our research and early-stage development programs, there can be no assurance that any product candidates will reach the clinic or be successfully developed or commercialized.

Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified.

Although our research and development efforts to date have resulted in several development programs, we may not be able to develop product candidates that are safe, effective and well-tolerated.

Our research programs may initially show promise in identifying potential product candidates, and we may select candidates for development, yet we may fail to advance product candidates to clinical development for many reasons, including the following:

• we may be unable to access sufficient capital on acceptable terms to fund the development of all of our assets and as a result we may be forced to delay or terminate the development of certain product candidates, or to consider restructuring efforts to secure alternate funding for those assets;

• the research methodology used and our drug discovery and design platform may not be successful in identifying potential product candidates;

• competitors may develop alternatives that render our product candidates obsolete or less attractive;

• product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

• the market for a product candidate may change during our program so that the continued development of that product candidate is no longer reasonable;

• a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective, well-tolerated or otherwise does not meet applicable regulatory or commercial criteria;

• a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all;

• a product candidate may not be accepted as safe, effective and well-tolerated by patients, the medical community or third-party payors, if applicable.

Even if we are successful in continuing to expand our pipeline, through our own research and development efforts, the potential product candidates that we identify or for which we acquire rights may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance.

If we do not successfully develop and commercialize a product pipeline, we may not be able to generate revenue from product sales in future periods or ever achieve profitability.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome and the results of earlier studies and trials may not be predictive of future trial results.

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A number of companies in the pharmaceutical, biopharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials for similar indications that we are pursuing due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies, and we cannot be certain that we will not face similar setbacks.

Our ongoing RDX013 Phase 2 clinical trial or any of our other ongoing clinical trials may be impacted by the COVID-19 pandemic in a number of ways, including delays or difficulties in any planned clinical site initiation, difficulties in obtaining IRB approvals, recruiting clinical site investigators and clinical site staff, delays or difficulties in enrolling patients, interruption of planned key clinical trial activities, such as clinical trial site data monitoring due to diversion of resources at clinical sites or limitation on travel imposed by federal or state governments.

Furthermore, we could encounter delays if our ongoing RDX013 Phase 2 clinical trial, or any other of our clinical trials are suspended or terminated by us, by the IRBs of the institutions in which the trial is being conducted, or by the FDA or other regulatory authorities.

Our ongoing RDX013 Phase 2 clinical trial may be impacted by the COVID-19 pandemic in a number of ways, including delays or difficulties in any planned clinical site initiation, difficulties in obtaining IRB approvals, recruiting clinical site investigators and clinical site staff, delays or difficulties in enrolling patients, interruption of planned key clinical trial activities, such as clinical trial site data monitoring due to diversion of resources at clinical sites or limitation on travel imposed by federal or state governments.

Furthermore, we could encounter delays if our ongoing RDX013 Phase 2 clinical trial is suspended or terminated by us, by the IRBs of the institutions in which the trial is being conducted, or by the FDA or other regulatory authorities.

Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

In addition, identifying and qualifying patients to participate in our RDX013 Phase 2 clinical trial or any of our other clinical trials is critical to our success.

In addition, identifying and qualifying patients to participate in our RDX013 Phase 2 clinical trial is critical to the success of the clinical trial.

The timing of our clinical trials depends, in part, on the speed at which we can recruit patients to participate in testing our product candidates.

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In addition, patients currently receiving treatment with the current standard of care or a competitor product may be reluctant to participate in a clinical trial with an investigational drug, or our inclusion and exclusion criteria for our clinical trials may present challenges in identifying acceptable patients.

As a result, the timeline for recruiting patients and conducting our RDX013 Phase 2 clinical trial or any of our other clinical trials may be delayed.

These delays could result in increased costs, delays in advancing our development of our product candidates, or termination of the clinical studies altogether.

As a result, the timeline for recruiting patients and conducting our RDX013 Phase 2 clinical trial may be delayed.

These delays could result in increased costs, delays in advancing our development of oRDX013, or termination of the clinical studies altogether.

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

Furthermore, even though we have completed our Phase 3 clinical development program for tenapanor for the control of serum phosphorus, the results may not be sufficient to obtain the desired regulatory approval for tenapanor, or if such regulatory approval is obtained, the content of the label approved by regulatory authorities may materially and adversely impact our ability to commercialize the product for the approved indication.

We rely on third parties to conduct some of our nonclinical studies and all of our clinical trials.

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Undesirable side effects caused by our products or product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials, result in the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities or limit the commercial profile of an approved label.

To date, patients treated with tenapanor have experienced drug-related side effects including diarrhea, nausea, vomiting, flatulence, abdominal discomfort, abdominal pain, abdominal distention and changes in electrolytes.

To date, patients treated with tenapanor have

experienced drug-related side effects including diarrhea, nausea, vomiting, flatulence, abdominal discomfort, abdominal pain, abdominal distention and changes in electrolytes.

Despite our receipt of marketing approval for tenapanor for IBS-C in adults and the completion of our Phase 3 clinical program for tenapanor for the Hyperphosphatemia Indication, in the event that future trials conducted by us with tenapanor, or trials we conduct with RDX013 or our other product candidates, reveal an unacceptable severity and prevalence of these or other side effects, such trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of tenapanor, RDX013, or any such other product candidate, for any or all targeted indications.

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We may experience difficulties in managing our current activities and growth given our level of managerial, operational, financial and other resources.

While we have continued to work to optimize our management composition, personnel and systems to support our current activities for future growth, these resources may not be adequate for this purpose.

Our need to effectively execute our business strategy requires that we:

Following the receipt of the CRL, we have implemented two restructuring plans in order to reduce operating costs and to better align our workforce with the needs of our business.

As a result of the second restructuring plan, initiated in October 2021, before the end of 2021, we will be eliminating all of our research capabilities, along with many positions throughout the Company, many of which would be necessary to support the commercialization of a product Our need to effectively execute our business strategy requires that we:

• manage any commercialization activities in which we may engage effectively;

• manage our clinical trials effectively;

• manage our internal research and development efforts effectively while carrying out our contractual obligations to licensors, contractors, collaborators, government agencies and other third parties;

• manage our internal development efforts effectively while carrying out our contractual obligations to licensors, contractors, collaborators, government agencies and other third parties;

• continue to improve our operational, financial and management controls, reporting systems and procedures;

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We are highly dependent on our executives, senior management and certain other key employees.

The loss of the services of our executives, senior management or other key employee could impede the achievement of our research, development and commercial objectives and seriously harm our ability to successfully implement our business strategy.

The loss of the services of our executives, senior management or other key employee could impede the achievement of our development and commercial objectives and seriously harm our ability to successfully implement our business strategy.

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.

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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.

Our proprietary drug discovery and design platform, and, in particular, APECCS, is a new approach to the discovery, design and development of new product candidates and may not result in any products of commercial value.

Furthermore, the APECCS aspects of our drug discovery and design platform may have diminished relevance to our efforts focused on the discovery of targets and therapies for the treatment of renal diseases.

We have developed a proprietary drug discovery and design platform integrating our proprietary chemistry capabilities and our APECCs stem cell platform to enable the identification, screening, testing, design and development of new product candidates, and have developed APECCS as a component of this of this platform.

We have utilized APECCS in the design of our small molecules and to identify new and potentially novel targets in the GI tract.

However, there can be no assurance that APECCS will be able to identify new targets in the GI tract or that any of these potential targets or other aspects of our proprietary drug discovery and design platform will yield product candidates that could enter clinical development and, ultimately, be commercially valuable.

In addition, as we focus our efforts on the discovery and design of therapies for the treatment of cardiorenal diseases, we may need to further develop our proprietary drug discovery and design platform to enhance its usefulness in the identification, screening, testing, design and development of new product candidates for the treatment of cardiorenal diseases.

There can be no assurances that we will be successful in such additional development of our platform or that our platform will yield product candidates for the treatment of renal diseases.

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.

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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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.

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.

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.

Certain states have also adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA.

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We and our collaborators, CROs, and other contractors and consultants collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business.

In the ordinary course of our business, we and our collaborators, CROs and other contractors and consultants collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information.

proprietary business information and personal information.

It is critical that we and our collaborators, CROs and other contractors and consultants do so in a secure manner to maintain the confidentiality and integrity of such confidential information.

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The risk of a security breach or disruption or data loss, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

In addition, the prevalent use of mobile devices that

access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property.

In addition, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property.

As a result of the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

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We have current collaboration partnerships for the commercialization of tenapanor in certain foreign countries, and we may form additional collaboration partnerships, create joint ventures or enter into additional licensing arrangements with third parties in the United States and abroad that we believe will complement or augment our existing business.

In particular, we have formed collaboration partnerships with KKC for certain research programs and for commercialization of tenapanor for hyperphosphatemia in Japan;

In particular, we have formed collaboration partnerships with KKC for commercialization of tenapanor for hyperphosphatemia in Japan;

with Fosun Pharma for commercialization of tenapanor for hyperphosphatemia and IBS-C in China and related territories;

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We have received a CRL from the FDA regarding our NDA for the Hyperphosphatemia Indication.

While we intend to request a Type A meeting as soon as possible, there can be no assurances that the Type A meeting with result in a path to address the deficiencies noted in the CRL

and to obtain approval of our NDA that is achievable in terms of clinical endpoints, time and cost.

While we intend to submit a FDRR, there can be no assurances that we will be successful in obtaining approval for tenapanor for the Hyperphosphatemia Indication.

Even if we are successful in obtaining approval for the NDA, the delay in obtaining such approval will likely result in delay in the regulatory process for our partners, which could have a material adverse effect on our business and results of operations.

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• As a result of the COVID-19 pandemic, we may also experience disruptions that could severely impact our business, preclinical studies and clinical trials, including:

• While our Phase 3 clinical development of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis is complete, we have ongoing and planned clinical trials for tenapanor and an ongoing Phase 2 clinical trial for RDX013, any of which may be delayed as a result the COVID-19 outbreak.

Other potential impacts of the COVID-19 pandemic on our various clinical trials include delays or difficulties in any planned clinical site initiation, including difficulties in obtaining Institutional Review Board approvals, recruiting clinical site investigators and clinical site staff, delays or difficulties in enrolling patients, interruption of planned key clinical trial activities, such as clinical trial site data monitoring due to diversion of resources at clinical sites or limitation on travel imposed by federal or state governments.

• We have an ongoing Phase 2 clinical trial for RDX013, which may be delayed as a result the COVID-19 outbreak.

Other potential impacts of the COVID-19 pandemic on our clinical trials include delays or difficulties in any planned clinical site initiation, including difficulties in obtaining Institutional Review Board approvals, recruiting clinical site investigators and clinical site staff, delays or difficulties in enrolling patients, interruption of planned key clinical trial activities, such as clinical trial site data monitoring due to diversion of resources at clinical sites or limitation on travel imposed by federal or state governments.

• We have limited the use of our offices to essential employees and requested that most of our personnel, including all of our administrative employees, work remotely.

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• Our increased reliance on personnel working from home may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business.

In addition, this could increase our cyber-security risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations or delay necessary interactions with local and federal regulators, ethics committees, manufacturing sites, research or clinical trial sites and important agencies and contractors.

operations or delay necessary interactions with local and federal regulators, ethics committees, manufacturing sites, research or clinical trial sites and important agencies and contractors.

• The FDA and comparable foreign regulatory agencies may continue to experience operational interruptions or delays, which may impact timelines for regulatory submission, trial initiation and regulatory approval.

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We may consider strategic transactions, such as acquisitions of companies, asset purchases, and/or in-licensing of products, product candidates or technologies.

In addition, if we are unable to access capital on a timely basis and on terms that are acceptable to us, we may be forced to restructure certain aspects of our business or identify and complete one or more strategic collaborations or other transactions in order to fund the development or commercialization of tenapanor and/or the development of RDX013 or certain of our other product candidates through the use of alternative structures.

In addition, if we are unable to access capital on a timely basis and on terms that are acceptable to us, we may be forced to further restructure certain aspects of our business or identify and complete one or more strategic collaborations or other transactions in order to fund the development or commercialization of tenapanor and/or the development of RDX013 through the use of alternative structures.

Additional potential transactions that we may consider include a variety of different business arrangements, including spin-offs, spin outs, collaboration partnerships, joint ventures, restructurings, divestitures, business combinations and investments.

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While we intend to request a Type A meeting as soon as possible, there can be no assurances that the Type A meeting with result in a path to address the deficiencies noted in the CRL and to approval of our NDA that is achievable in terms of clinical endpoints, time and cost.

If we decide to appeal the issuance of the CRL, there can be no assurances that our request for appeal will be granted, or that, if granted, we will be successful in our appeal.

The End of Review Meeting did not provide a reasonable path forward for resubmission or our

NDA, and as a result, we currently expect to submit a FDRR to raise our scientific disagreement above the Division level within CDER.

There can be no assurances that the FDR process will result in approval of the NDA or another positive outcome.

As a result, the regulatory approval process for our NDA is highly uncertain.

Finally, approval policies, regulations or the type and

amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or result in a decision not to approve an application for regulatory approval.

Finally, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or result in a decision not to approve an application for regulatory approval.

Despite the time and expense exerted, failure can occur at any stage.

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Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control.

Regulatory authorities may also impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-marketing studies.

Regulatory authorities may also impose significant restrictions on a product’s indicated uses or

marketing or impose ongoing requirements for potentially costly post-marketing studies.

Furthermore, any new legislation addressing drug safety issues could result in delays or increased costs to assure compliance.

We will also be required to report certain adverse reactions and production problems, if any, to the FDA, and to comply with requirements concerning advertising and promotion for our products.

Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the

product’s approved label.

Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label.

As such, we may not promote our products for indications or uses for which they do not have FDA approval.

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government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

If a prolonged

government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Separately, in response to the global COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most foreign inspections of manufacturing facilities and products through April 2020, and subsequently, on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities.

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Risks Related to Intellectual Property

We may become subject to claims alleging infringement of third parties’ patents or proprietary rights and/or claims seeking to invalidate our patents, which would be costly, time consuming and, if successfully asserted against us, delay or prevent the development and commercialization of tenapanor or our other product candidates, or prevent or delay the continued use of our drug discovery and development platform, including APECCS.

There have been many lawsuits and other proceedings asserting infringement or misappropriation of patents and other intellectual property rights in the pharmaceutical and biotechnology industries.

There can be no assurances that we will not be subject to claims alleging that the manufacture, use or sale of tenapanor or any other product candidates, or that the use of our drug discovery and development platform, including APECCS, infringes existing or future third-party patents, or that such claims, if any, will not be successful.

pending which may later result in issued patents that may be infringed by the manufacture, use or sale of tenapanor or other product candidates or by the use of APECCS.

Moreover, we may face patent infringement claims from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect.

We may be unaware of one or more issued patents that would be infringed by the manufacture, sale or use of tenapanor or our other product candidates, or by the use of APECCS.

There can be no assurances that we will not be subject to claims alleging that the manufacture, use or sale of tenapanor or any other product candidates infringes existing or future third-party patents, or that such claims, if any, will not be successful.

Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, and because pending patent claims can be revised before issuance, there may be applications now pending which may later result in issued patents that may be infringed by the manufacture, use or sale of tenapanor or other product candidates.

Moreover, we may face patent infringement claims from

non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect.

We may be unaware of one or more issued patents that would be infringed by the manufacture, sale or use of tenapanor or our other product candidates.

We may be subject to third-party patent infringement claims in the future against us or our that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages, including treble damages and attorney’s fees if we are found to be willfully infringing a third party’s patents.

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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.

If a patent infringement suit were brought against us we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

In addition, if a patent infringement suit were brought against us regarding the use of aspects of our drug discovery and development platform, we could be forced to stop our use of APECCS or of other aspects of our platform, or we could be forced to modify our processes to avoid infringement, which may not be possible at a reasonable cost, if at all, and which could result in substantial delay in our use of our platform for the discovery of new product candidates or potential targets.

If a patent infringement suit were brought against us we could be forced to stop or delay development, manufacturing or sales of the product or product candidate that is the subject of the suit.

As a result of patent infringement claims, or in order to avoid potential claims, we may choose to seek, or be required to seek, a license from the third party and would most likely be required to pay license fees or royalties or both.

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Even if we were able to obtain a license, we may be unable to maintain such licenses and the rights may be nonexclusive, which would give our competitors access to the same intellectual property.

Ultimately, we could be prevented from commercializing a product, or forced to redesign it, or to cease our use of APECCS or some other aspect of our drug discovery and development platform or our business operations if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms, or unable to maintain such licenses when granted.

Ultimately, we could be prevented from commercializing a product, or forced to redesign it if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms, or unable to maintain such licenses when granted.

Even if we are successful in defending against such claims, such litigation can be expensive and time consuming to litigate and would divert management’s attention from our core business.

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If the breadth or strength of protection provided by the patents and patent applications we hold or pursue with respect to our product candidates is successfully challenged, then our ability to commercialize such product candidates could be negatively affected, and we may face unexpected competition that could have a material adverse impact on our business.

Further, if we encounter

delays in our clinical trials, the period of time during which we or our collaboration partners could market tenapanor or other product candidates under patent protection would be reduced.

Further, if we encounter delays in our clinical trials, the period of time during which we or our collaboration partners could market tenapanor or other product candidates under patent protection would be reduced.

Even where laws provide protection, costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and the outcome of such litigation would be uncertain.

If we or one of our collaboration partners were to initiate legal proceedings against a third party to enforce a patent covering the product candidate, the defendant could counterclaim that our patent is invalid and/or unenforceable.

In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.

In patent litigation in the United States, defendant counterclaims

alleging invalidity and/or unenforceability are commonplace.

Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement.

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The USPTO and various foreign patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions to maintain patent applications and issued patents.

Noncompliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Noncompliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the

relevant jurisdiction.

In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.

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These factors include those discussed in this “Risk Factors” section and others such as:

• announcements of regulatory decisions regarding our NDA seeking marketing approval for tenapanor for the the Hyperphosphatemia Indication;

• announcements of regulatory decisions regarding our NDA seeking marketing approval for tenapanor for the Hyperphosphatemia Indication;

• results of regulatory inspections of our facilities or those of our contract manufacturing organizations, or specific label restrictions or patient populations for tenapanor’s use, or changes or delays in the regulatory review process;

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Our principal stockholders own a significant percentage of our stock and, together with our management, will be able to exert significant control over matters subject to stockholder approval.

Based on the number of shares outstanding as of June 30, 2021, our officers, directors and stockholders who hold at least 5% of our stock together beneficially own approximately 39.2% of our outstanding common stock.

Based on the number of shares outstanding as of September 30, 2021, our officers, directors and stockholders who hold at least 5% of our stock together beneficially own approximately 38.2% of our outstanding common stock.

If these officers, directors, and principal stockholders or a group of our principal stockholders act together, they will be able to exert a significant degree of influence over our management and affairs and control matters requiring stockholder approval, including the election of directors, amendments to our organizational documents, and approval of any merger, sale of assets or other business combination transactions.

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If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.

As of June 30, 2021, we had approximately 103.0 million shares of common stock outstanding.

As of September 30, 2021, we had approximately 106.8 million shares of common stock outstanding.

Of those shares, approximately 37.5 million were held by current directors, executive officers and stockholders owning 5% or more of our outstanding common stock.

As of June 30, 2021, 1.2 million shares of common stock issuable upon vesting of outstanding restricted stock units and approximately 12.5 million shares of common stock issuable upon exercise of outstanding options were eligible for sale in the public market to the extent permitted by the provisions of the applicable vesting schedules, and Rule 144 and Rule 701 under the Securities Act.

As of September 30, 2021, 0.8 million shares of common stock issuable upon vesting of outstanding restricted stock units and approximately 11.4 million shares of common stock issuable upon exercise of outstanding options were eligible for sale in the public market to the extent permitted by the provisions of the applicable vesting schedules, and Rule 144 and Rule 701 under the Securities Act.

If these additional shares of common stock are issued and sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

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Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all.

These reporting requirements, rules and

regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

We are subject to Section 404 of The Sarbanes-Oxley Act of 2002 (“Section 404”) and the related rules of the Securities and Exchange Commission (“SEC”) which require, among other things, our management to report on the effectiveness of our internal control over financial reporting.

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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