What changed in this filing

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Item 1A. Risk Factors

2022-08-04 compared with 2022-05-05 · 69 added, 119 removed, 835 unchanged (18% of the section changed)

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Risks Related to our Financial Condition and Capital Requirements

We have a limited operating history, have incurred significant losses since our inception and we will incur losses in the future, which makes it difficult to assess our future viability;

We have incurred significant losses since our inception and we will incur losses in the future, which makes it difficult to assess our future viability;

although our financial statements have been prepared on a going concern basis, our current level of cash and investments alone is not sufficient to meet our operating plans for the next twelve months, raising substantial doubt regarding our ability to continue as a going concern.

We are a clinical-stage biopharmaceutical company with a limited operating history.

Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk.

To date, we have focused substantially all of our efforts on our research and development activities, including developing tenapanor and developing our proprietary drug discovery and design platform.

We began selling our first product, IBSRELA ® (tenapanor) for the treatment of irritable bowel syndrome with constipation (“IBS-C”) in March 2022, and have generated limited revenue from product sales to date.

We recently commenced the commercialization of our first product, IBSRELA ® (tenapanor) for the treatment of irritable bowel syndrome with constipation (“IBS-C”), and have generated limited revenue from product sales to date.

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 commercialization, development and other expenses related to our ongoing operations.

As of March 31, 2022, we had an accumulated deficit of $741.0 million.

As of June 30, 2022, we had an accumulated deficit of $767.9 million.

We expect to continue to incur substantial operating losses for the foreseeable future as we commercialize IBSRELA, seek to gain approval for XPHOZAH ® (tenapanor) for the control of serum phosphorus in adult patients with chronic kidney disease (“CKD”) on dialysis (the “Hyperphosphatemia Indication”);

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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 will require substantial additional financing to achieve our goals, including our goals of commercializing IBSRELA and preparing for and participating in a Cardiovascular and Renal Drugs Advisory Committee (“Advisory Committee”) meeting in connection with the formal dispute resolution ("FDR") process commenced in response to the Complete Response Letter (“CRL”) received from the U.S.

We will require substantial additional financing for the foreseeable future as we invest in the commercialization of IBSRELA and prepare for and participate in a Cardiovascular and Renal Drugs Advisory Committee (“Advisory Committee”) meeting in connection with the formal dispute resolution ("FDR") process commenced in response to the Complete Response Letter (“CRL”) received from the U.S.

Food and Drug Administration (“FDA”) relating to our New Drug Application (“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 limit, reduce or terminate our efforts to commercialize IBSRELA or to seek and obtain approval for tenapanor for the Hyperphosphatemia Indication.

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.

Since our inception, most of our resources have been dedicated to our research and development activities, including developing tenapanor.

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

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If we fail to satisfy the continued listing requirements of The Nasdaq Global Market ("Nasdaq") such as the minimum stockholders’ equity requirement or the minimum closing bid price requirement, Nasdaq may take steps to de-list our common stock.

For example, on February 28, 2022 we received a letter from Nasdaq indicating that Nasdaq had determined that we had failed to comply with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2).

For example, on each of February 28, 2022 and May 23, 2022, we received a letter from Nasdaq indicating that Nasdaq had determined that we had failed to comply with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2).

Nasdaq Listing Rule 5550(a)(2) requires that companies listed on the Nasdaq Global Market maintain a minimum closing bid price of at least $1.00 per share (the “Listing Requirement”).

We received a letter from Nasdaq on March 31, 2022, indicating that the Company had regained compliance with the Listing Requirement after the closing bid price for its common stock listed on Nasdaq equaled or exceeded $1.00 per share for ten (10) consecutive business days, and confirming that the Company will remain in compliance with this Listing Requirement as long as the closing bid price of its common stock does not fall below $1.00 for thirty (30) consecutive business days.

On April 8, 2022, the closing bid price of our common stock listed on Nasdaq was below $1.00 per share, and there can be no assurances that we will continue to remain in compliance with the Listing Requirement.

In the event that we are not able to remain in compliance with the Listing Requirement, there can be no assurances that we will be able to regain compliance with the Listing Requirement in the time frame that may be afforded us by Nasdaq.

We are monitoring the bid price of our common stock and will consider options available to us, including the implementation of a reverse stock split, to maintain or regain, if required, compliance with the Listing Requirement.

We received a letter from Nasdaq dated March 31, 2022, indicating that we had regained compliance with the Listing Requirement after the closing bid price for its common stock listed on Nasdaq equaled or exceeded $1.00 per share for ten (10) consecutive business days.

However, we have not yet regained compliance with the Listing Requirement following the second letter we received on May 23, 2022 letter, and there can be no assurances that we will regain compliance with the Listing Requirement during the 180 day grace period afforded us by Nasdaq.

On April 29, 2022, we filed our definitive Proxy Statement with the U.S.

Securities and Exchange Commission (the “SEC”) indicating our intention to seek approval from our stockholders during our Annual Meeting of Stockholders to be held on June 15, 2022, for a proposal to grant our Board of Directors authority to effect a reverse stock split of our authorized common stock and issued and outstanding common stock by amending our Amended and Restated Certificate of Incorporation by September 15, 2022 and within a range of not less than 1-for-2 and not more than 1-for-10, if our Board of Directors deems it within our best interests.

There can be no assurances that our stockholders will approve the proposal, or that we will have other options available to maintain compliance with the Listing Requirement.

If we fail to maintain compliance with this requirement, or any other of the continued listing requirements of The Nasdaq Global Market, Nasdaq may take steps to de-list our common stock.

by September 15, 2022 and within a range of not less than 1-for-2 and not more than 1-for-10, if our Board of Directors deems it within our best interests.

This proposal failed to receive a sufficient number of votes for approval from our stockholders during our Annual Meeting of Stockholders and the adjournment thereof.

We are monitoring the bid price of our common stock and will consider options available to us to regain compliance with the Listing Requirement.

There can be no assurances that we will have other options available to regain compliance with the Listing Requirement.

If we fail to regain compliance with this requirement, or any other of the continued listing requirements of The Nasdaq Global Market, Nasdaq may take steps to de-list our common stock.

If Nasdaq de-lists our securities for trading on the Nasdaq or takes other actions with respect to our Nasdaq listing, we could face significant adverse consequences, including:

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• a decreased ability to issue additional securities or obtain additional financing in the future.

Such a de-listing would likely have an adverse effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.

We may take actions to avoid such a de-listing or in the event of a de-listing, we may take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to remain listed or to become listed again, stabilize the market price or improve the liquidity or trading volume of our common stock, prevent our common capitalization and stockholder’s

equity from dropping below the Nasdaq minimum requirements, or prevent other future non-compliance with Nasdaq’s continued listing requirements.

Such a de-listing would likely have an adverse effect on the price of our common stock and would impair the ability of our stockholders to sell or purchase our common stock.

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

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We have no other products approved for sale and have received a CRL from the FDA for our NDA for the Hyperphosphatemia Indication and an Appeal Denied Letter (“ADL”) in response to our first level of appeal of the CRL to the FDA Office of Cardiology, Hematology, Endocrinology and Nephrology (“OCHEN”).

Additionally, we have received an Interim Response to our second level of appeal to the Office of New Drugs (“OND”), Center for Drug Evaluation and Research (CDER), indicating that OND intends to direct the Division of Cardiology and Nephrology of OCHEN (the “Division”) to bring the XPHOZAH NDA to the Advisory Committee (the “Interim Response”).

There can be no assurances that any such Advisory Committee will recommend approval of our NDA for tenapanor for the Hyperphosphatemia Indication, or that if approval is recommended, that such approval will ultimately be granted by the FDA.

Additionally, we have received an Interim Response (the “Interim Response”) to our second level of appeal to the Office of New Drugs (“OND”), Center for Drug Evaluation and Research (CDER), in which OND indicated that additional input from the Advisory Committee, in general, and specifically from experts, including clinicians would be valuable in further considering the clinical meaningfulness of the phosphate lowering effect observed in our phase 3 clinical program for XPHOZAH.

OND has directed the Division of Cardiology and Nephrology of OCHEN (the “Division”) to convene the Advisory Committee, and a tentative date for the Advisory Committee meeting has been set for November 16, 2022.

There can be no assurances that the response from the Advisory Committee will be positive, or thatthat approval of our NDA will ultimately be granted by the FDA.

To date, we have generated limited product revenue from product sales of IBSRELA.

There can be no assurances that we will be successful in increasing the amount of product revenue from sales of IBSRELA.

Our ability to generate revenue from product sales and achieve profitability depends on our ability to successfully commercialize IBSRELA;

obtain approval by the FDA for the Hyperphosphatemia Indication, and subsequently successfully commercialize XPHOZAH for the Hyperphosphatemia Indication;

and the ability of our collaboration partners to obtain regulatory approval to market tenapanor in their respective territories.

There can be no assurances that we will generate sufficient product revenue from sales of IBSRELA and, if approved, XPHOZAH, to cover our expenses.

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

Our failure to generate adequate revenue from product sales would likely depress our market value and could impair

our ability to raise capital, expand our business, discover or develop other product candidates or continue our operations.

Our failure to generate adequate revenue from product sales would likely depress our market value and could impair our ability to raise capital, expand our business, discover or develop other product candidates or continue our operations.

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

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• a continued acceptable safety and tolerability profile of IBSRELA following approval.

Our potential to achieve revenue from the commercialization of IBSRELA and the amount of such potential revenue is subject to these and other factors, and may be unpredictable from quarter-to-quarter.

The amount of potential revenue we may achieve from the commercialization of IBSRELA is subject to these and other factors, and may be unpredictable from quarter-to-quarter.

If the number of patients in the market for IBSRELA or the price that the market can bear is not as significant as we estimate, or if we are not able to secure adequate physician and patient acceptance of IBSRELA or adequate coverage and reimbursement for IBSRELA, we may not generate sufficient revenue from sales of IBSRELA.

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

Our success is also dependent upon our ability to obtain regulatory approval for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis, and there can be no assurances that we will be successful in obtaining such regulatory approval.

Our success is also dependent upon our ability to obtain regulatory approval for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

We are pursuing regulatory approval for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis, and there can be no assurances that we will be successful in obtaining such regulatory approval.

We are pursuing regulatory approval for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

To date, we have invested a significant amount of our efforts and financial resources in the research and development of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis.

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On February 18, 2022, we submitted an appeal of the ADL to the FDA’s Center for Drug Evaluation and Research, Office of New Drugs (“OND”), and on April 15, 2022, we received an Interim Response from OND.

The Interim response indicated that OND intends to direct the Division to bring the XPHOZAH NDA to the Advisory Committee.

We are currently awaiting further guidance from OND regarding the timing of the Advisory Committee meeting.

The Interim Response indicated that OND would direct the Division to convene the Advisory Committee to provide additional input for consideration by OND, and the Advisory Committee meeting has been tentatively scheduled for November 16, 2022.

OND expects to provide a response to the FDR within thirty (30) days after the conclusion of the Advisory Committee meeting.

There can be no

assurances that the Advisory Committee will recommend approval of our NDA for tenapanor for the Hyperphosphatemia Indication, or that if approval is recommended, that such approval will ultimately be granted by the FDA.

There can be no assurances that the response from the Advisory Committee will be positive, or that approval of the NDA will ultimately be granted by the FDA.

Even if we are successful in obtaining regulatory approval for tenapanor for control of serum phosphorus in adult patients with CKD on dialysis, the expense and time required to do so could adversely impact our ability to successfully commercialize XPHOZAH for the Hyperphosphatemia Indication.

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Undesirable side effects caused by IBSRELA, and/or, if approved, XPHOZAH, could cause us or regulatory authorities to interrupt, delay or halt the commercialization of the product.

To date, the most common adverse reactions reported in at least 2% of patients in IBSRELA-treated patients and at an incidence greater than placebo in the two Phase 3 trials include:

diarrhea, abdominal distension, flatulence and dizziness.

Despite our receipt of marketing approval for IBSRELA and the completion of our Phase 3 clinical program for XPHOZAH, the prevalence and/or severity of these or other side effects could result in a number of potentially significant negative consequences could occur, including:

Despite our receipt of marketing approval for IBSRELA and the completion of our Phase 3 clinical program for XPHOZAH, the prevalence and/or severity of side effects caused by IBSRELA, and/or if approved, XPHOZAH, could result in a number of potentially significant negative consequences could occur, including:

• regulatory authorities may withdraw their approval of the product or seize the product;

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Any of the foregoing events could prevent us, or a collaboration partner, from achieving or maintaining market acceptance of IBSRELA, and/or, if approved, XPHOZAH, and could result in the loss of significant revenue to us, which would materially and adversely affect our results of operations and business.

As a company, we have no prior experience in the marketing, sale and distribution of pharmaceutical products;

As a company, we have limited experience in the marketing, sale and distribution of pharmaceutical products;

and there are significant risks in building and managing a commercial organization.

As a company, we have no prior experience in building and managing a commercial organization, or in the marketing, sale and distribution of pharmaceutical products.

As a company, we have limited experience in building and managing a commercial organization, or in the marketing, sale and distribution of pharmaceutical products.

There can be no assurances that we will be successful in our efforts to retain, and incentivize qualified individuals, generate sufficient sales leads, comply with regulatory requirements applicable to the marketing and sale of drug products and effectively manage a geographically dispersed sales and marketing team.

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The loan was funded in the amount of $27.5 million on February 23, 2022 and the remaining $22.5 million may be funded upon the satisfaction of both (i) receipt from the FDA of approval of the NDA for tenapanor for the Hyperphosphatemia Indication on or prior to December 31, 2022 and (ii) our achievement of certain product revenue milestone targets described in the 2022 Loan Agreement.

On August 1, 2022, we entered into an amendment to the 2022 Loan Agreement with SLR Investment Corp.

that extends the date by which we must receive approval by the FDA for our NDA for the Hyperphosphatemia Indication in order to borrow the additional $22.5 million from December 31, 2022 to March 31, 2023.

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

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Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, these caps may not cover or provide adequate payment for our product candidates.

We expect to experience pricing pressures in connection with the sale of IBSRELA, and if approved and commercialized, XPHOZAH, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes.

The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense.

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We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture IBSRELA, 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.

The facilities used by our contract manufacturers to manufacture our drug supply are subject to

inspection by the FDA.

The facilities used by our contract manufacturers to manufacture our drug supply are subject to inspection by the FDA.

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.

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Patients may be unwilling to participate in our clinical studies because of concerns about adverse events observed with the current standard of care, competitor products and/or other investigational agents, in each case for the same indications and/or similar patient populations.

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 clinical trials may be delayed.

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We, and these third parties are required to comply with current GLPs for nonclinical studies, and good clinical practices (“GCPs”) for clinical studies.

GLPs and GCPs are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area (“EEA”) and comparable foreign regulatory authorities for all of our products in nonclinical and clinical development, respectively.

GLPs and GCPs are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area

(“EEA”) and comparable foreign regulatory authorities for all of our products in nonclinical and clinical development, respectively.

Regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.

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Sucroferric oxyhydroxide (Velphoro);

• Ferric citrate (Auryxia).

and Ferric citrate (Auryxia).

All of the phosphate binders listed above are available as generics in the U.S., with the exception of Velphoro and Auryxia.

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• loss of revenue;

• the inability to commercialize or co-promote our IBSRELA, and/or, if approved, XPHOZAH.

• the inability to commercialize or co-promote IBSRELA, and/or, if approved, XPHOZAH.

Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims could prevent or inhibit the commercialization of any products we develop.

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We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information.

Our internal information technology systems and infrastructure, and those of

our current and any future collaborators, CROs, contractors and consultants and other third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.

Our internal information technology systems and infrastructure, and those of our current and any future collaborators, CROs, contractors and consultants and other third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.

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.

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While we do not believe that we have experienced any significant system failure, accident or security breach to date.

If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs, and/or of our efforts to commercialize tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis or for another other related indication, if approved.

For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

If such an event were to occur and cause interruptions in our operations, it could result in material disruption to our business.

In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state privacy and security laws, if applicable.

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

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

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

and in Canada with Knight for commercialization of tenapanor for IBS-C and hyperphosphatemia.

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

While we are pursuing an appeal through the FDR process, and have been notified from OND in an interim response to our second level appeal that OND will direct the Division to bring our NDA to an Advisory Committee, there can be no assurances that the Advisory Committee will recommend approval of our NDA for tenapanor for the Hyperphosphatemia Indication, or that if approval is recommended, that such approval will ultimately be granted by the FDA.

While we are pursuing an appeal through the FDR process, and an Advisory Committee has been tentatively scheduled for November 16, 2022, there can be no assurances that the outcome of the Advisory Committee will be positive, or that approval of the NDA for the Hyperphosphatemia Indication will ultimately be granted by the FDA.

Even if we are successful in obtaining approval for the NDA, the delay in obtaining such approval may 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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Outbreaks of epidemic, pandemic, or contagious diseases, such as the current novel coronavirus (“COVID-19”) pandemic or, historically, the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome or the H1N1 virus, could disrupt our business.

Business disruptions could include disruptions or restrictions on our ability to conduct our clinical trials, as planned, travel, as well as temporary closures of the facilities of our collaboration partners, suppliers or contract manufacturers.

Any disruption of our clinical trial operations, collaboration partners, suppliers or contract manufacturers could adversely impact our operating results.

Economic and health conditions related to the COVID-19 pandemic in the United States and across most of the globe remain uncertain and continue to evolve.

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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 commercialization of IBSRELA, our continued efforts to seek approval for our NDA for tenapanor for the Hyperphosphatemia Indication 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.

Any such transaction may require us to incur non-recurring or other charges, may increase our near- and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations and financial results.

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Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks and could have a material adverse effect on our business, results of operations, financial condition and prospects.

If we seek and obtain approval to commercialize our product candidates outside of the United States, manufacture our product candidates outside of the United States, or otherwise engage in business outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.

We or our collaboration partners may decide to seek marketing approval for certain of our product candidates outside the United States or otherwise engage in business outside the United States, including entering into contractual agreements with third-parties.

We currently utilize contract manufacturing organizations located outside of the United States to manufacture our active drug substance for tenapanor.

Our CMOs manufacture tenapanor API outside of the United States, and we may seek and obtain approval to commercialize IBSRELA or XPHOZAH outside of the United States, and as a result, a variety of risks associated with international operations could materially adversely affect our business.

We or our collaboration partners may decide to seek marketing approval for IBSRELA or XPHOZAH outside the United States.

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

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

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Our business involves the use of hazardous materials and we and third-parties with whom we contract must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

Our development activities involve the controlled storage, use and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds.

We and manufacturers and suppliers with whom we may contract are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials.

In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal.

We and manufacturers and suppliers with whom we may contract are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous materials, including the components of our tenapanor and our product candidates.

In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our

manufacturers’ facilities pending their use and disposal.

We cannot eliminate the risk of contamination, which could cause an interruption of our commercialization efforts, and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products.

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Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

• warning or untitled letters, fines or holds on clinical trials;

• warning or untitled letters, or fines;

• restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls;

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Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

For example, over the last several years, the U.S.

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.

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.

Additionally, on April 15, 2021, the FDA issued a guidance document in which the FDA described its plans to conduct voluntary remote interactive evaluations of certain drug manufacturing facilities and clinical research sites, among other facilities.

According to the guidance, the FDA may request such remote interactive evaluations where the FDA determines that remote evaluation would be appropriate based on mission needs and travel limitations.

In May 2021, the FDA outlined a detailed plan to move toward a more consistent state of inspectional operations, and in July 2021, the FDA resumed standard inspectional operations of domestic facilities.

More recently, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to the evolving COVID-19 pandemic.

Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could

significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We and our contract manufacturers are subject to significant regulation with respect to manufacturing of IBSRELA and XPHOZAH.

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These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale.

Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing.

Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our products or product candidates that may not be detectable in final product testing.

We or our contract manufacturers must supply all necessary documentation in support of an NDA or comparable regulatory filing on a timely basis and must adhere to cGMP regulations enforced by the FDA and other regulatory agencies through their facilities inspection programs.

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However, physicians may nevertheless prescribe an approved product to their patients in a manner that is inconsistent with the approved label, which is an off-label use.

In preparation for the commercial launch of IBSRELA, we have

implemented compliance and training programs designed to ensure that our sales and marketing practices comply with applicable regulations regarding off-label promotion.

We have implemented compliance and training programs designed to ensure that our sales and marketing practices comply with applicable regulations regarding off-label promotion.

Notwithstanding these programs, the FDA or other government agencies may allege or find that our practices constitute prohibited promotion of our product candidates for unapproved uses.

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Some participants in clinical studies of tenapanor have reported adverse effects after being treated with tenapanor, including diarrhea, abdominal distension, flatulence and dizziness.

If we are successful in commercializing any products, FDA and foreign regulatory agency regulations require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse events.

The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature of the event.

We are required to report certain information about adverse medical events if our products may have caused or contributed to those adverse events.

The timing of our obligation to report is triggered by the date we become aware of the adverse event as well as the nature of the event.

We may fail to report adverse events we become aware of within the prescribed timeframe.

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It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations.

Additionally, we are subject to the risk that a person

or government could allege such fraud or other misconduct, even if none occurred.

Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

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our failure or the failure of any such collaboration partners to comply with these laws could have a material adverse effect on our results of operations and financial conditions.

Following our commercial introduction of IBSRELA, and the regulatory approval by a foreign government and the commercial introduction of any either IBSRELA or XPHOZAH by our collaboration partner in such jurisdiction, we and our collaboration partners may be subject to additional healthcare statutory and regulatory requirements and enforcement by the federal government and the states and foreign governments in which we conduct our business.

We and our collaboration partners may be subject to additional healthcare statutory and regulatory requirements and enforcement by the federal government and the states and foreign governments in which we conduct our business.

The laws that may affect our ability to operate as a commercial organization include:

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In the United States, the ACA was enacted in 2010 with a goal of reducing the cost of healthcare and substantially changing the way healthcare is financed by both government and private insurers.

The ACA, among other things, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program, in which manufacturers must now agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.

On June 17, 2021, the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Thus, the ACA will remain in effect in its current form.

Further, prior to the U.S.

Supreme Court ruling, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace from February 15, 2021 through

August 15, 2021.

The executive order instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

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If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the United States, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, results of operations and financial condition.

With the commercial launch of IBSRELA, we will participate in the Medicaid Drug Rebate Program ("MDRP") and other federal and state government pricing programs in the United States, and we may participate in additional government pricing programs in the future.

With the commercial launch of IBSRELA, we participate in the Medicaid Drug Rebate Program ("MDRP") and other federal and state government pricing programs in the United States, and we may participate in additional government pricing programs in the future.

These programs generally require manufacturers to pay rebates or otherwise provide discounts to government payors in connection with drugs that are dispensed to beneficiaries of these programs.

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Federal law requires that a manufacturer that participates in the MDRP also participate in the Public Health Service’s 340B drug pricing program (the “340B program”) in order for federal funds to be available for the manufacturer’s drugs under Medicaid.

We participate in the 340B program, which is administered by the Health Resources and Services Administration (“HRSA”), and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for the our covered drugs.

These 340B covered entities include a variety of community health clinics and other entities that receive health

services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients.

These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients.

The 340B ceiling price is calculated using a statutory formula, which is based on the AMP and rebate amount for the covered drug as calculated under the MDRP.

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In addition, legislation may be introduced that, if passed, would further expand the 340B program, such as adding further covered entities or requiring participating manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting.

In order to be eligible to have drug products paid for with federal funds under Medicaid and purchased by certain federal agencies and grantees, we also must participate in the U.S.

In order to be eligible to have drug products paid for with federal funds under Medicaid and purchased by certain federal agencies and grantees, we also participate in the U.S.

Department of Veterans Affairs (“VA”) Federal Supply Schedule (“FSS”) pricing program.

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Public Health Service (including the Indian Health Service).

We are also be required to pay rebates on products purchased by military personnel and dependents through the TRICARE retail pharmacy program.

We are also required to pay rebates on products purchased by military personnel and dependents through the TRICARE retail pharmacy program.

If we fail to provide timely information or are found to have knowingly submitted false information, we may be subject to civil monetary penalties.

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Thus, any patents that we may own may not provide the anticipated level of, or any, protection against competitors.

Furthermore, an

adverse decision may result in a third party receiving a patent right sought by us, which in turn could affect our ability to develop, manufacture or commercialize our products or technologies.

Furthermore, an adverse decision may result in a third party receiving a patent right sought by us, which in turn could affect our ability to develop, manufacture or commercialize our products or technologies.

Some of our patents and patent applications may in the future be co-owned with third parties.

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Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations, and prospects.

If our intellectual property related to IBSRELA, XPHOZAH, RDX013 or any future product candidates is not adequate or if we are not able to successfully enforce our intellectual property right, the commercial value of IBSRELA, or our product candidates may be adversely affected and we may not be able to compete effectively in our market.

If our intellectual property related to IBSRELA, XPHOZAH, RDX013 or any future product candidates is not adequate or if we are not able to successfully enforce our intellectual property rights, the commercial value of IBSRELA, or our product candidates may be adversely affected and we may not be able to compete effectively in our market.

The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain.

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Further, we have reported that we have completed the data analysis from our Phase 2 clinical trial evaluating the safety and efficacy of RDX013 for the treatment of hyperkalemia, and that we currently expect that the next steps for the RDX013 program will be to evaluate a new formulation that potentially enhances subject compliance and the efficacy of RDX013 in an additional Phase 2 clinical study.

We currently expect to delay further development of RDX013 until such time as we have determined that our available resources support conducting such additional formulation work and an additional

clinical study.

We currently expect to delay further development of RDX013 until such time as we have determined that our available resources support conducting such additional formulation work and an additional clinical study.

As a result of this delay in our development program for RDX013, the period of time during which we or our collaboration partners could market RDX013 under patent protection would be reduced.

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• the success or lack of success with regards to our commercialization of IBSRELA;

• the success or lack of success with regards to the Advisory Committee meeting to consider our NDA seeking marketing approval for tenapanor for the Hyperphosphatemia Indication, and announcements of regulatory decisions regarding our NDA;

• the success or lack of success with regards to the Advisory Committee meeting convened as a part of our FDR related to our NDA seeking marketing approval for tenapanor for the Hyperphosphatemia Indication, and announcements of regulatory decisions regarding our NDA;

• announcements regarding any potential receipt from Nasdaq of notice regarding lack of compliance with the listing requirements of Nasdaq or a de-listing of our common stock;

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Any adverse determination in litigation could also subject us to significant liabilities.

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 March 31, 2022, our officers, directors and stockholders who hold at least 5% of our stock together beneficially own approximately 9.3% 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.

The interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders.

For instance, officers, directors and principal stockholders, acting together, could cause us to enter into transactions or agreements that we would not otherwise consider.

Similarly, this concentration of ownership may have the effect of delaying or preventing a change in control of our company otherwise favored by our other stockholders.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

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 March 31, 2022, we had approximately 136.3 million shares of common stock outstanding.

Of those shares, approximately 9.0 million were held by current directors, executive officers and stockholders owning 5% or more of our outstanding common stock.

As of March 31, 2022, 4.4 million shares of common stock issuable upon vesting of outstanding restricted stock units and approximately 12.9 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.

If we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline.

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Our ability to attract and retain collaboration partners or customers, invest in and grow our business and meet our financial obligations depends on our operating and financial performance, which, in turn, is subject to numerous factors, including the prevailing economic conditions and financial, business and other factors beyond our control, such as the rate of unemployment, the number of uninsured persons in the United States, presidential elections, other political influences and inflationary pressures.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.

The 2008 global financial crisis caused extreme volatility and disruptions in the capital and credit markets.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including the current inflationary environment and rising interest rates.

For example, the 2008 global financial crisis caused extreme volatility and disruptions in the capital and credit markets.

We cannot anticipate all the ways in which the global economic climate and global financial market conditions could adversely impact our business in the future.

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We currently intend to invest our future earnings, if any, to fund our growth.

Additionally, the terms of our loan and security agreements could

restrict our ability to pay dividends.

Additionally, the terms of our loan and security agreements could restrict our ability to pay dividends.

Therefore, our stockholders are not likely to receive any dividends on our common stock for the foreseeable future.

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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