What changed in this filing

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Item 1A. Risk Factors

2022-11-03 compared with 2022-08-04 · 65 added, 65 removed, 839 unchanged (13% of the section changed)

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Risks Related to our Financial Condition and Capital Requirements

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;

We have incurred significant losses since our inception and will incur losses in the future, which makes it difficult for us 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.

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

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

As of September 30, 2022, we had an accumulated deficit of $790.8 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 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.

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 scheduled for November 16, 2022, 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.

The inability to access necessary capital when needed on acceptable terms, or at all, could force us to reduce our efforts to commercialize IBSRELA or delay, limit, reduce or terminate our efforts to seek and obtain approval for tenapanor for the Hyperphosphatemia Indication or, if approved, the commercialization of XPHOZAH.

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.

Notwithstanding the restructurings, we believe that we will continue to expend substantial resources for the foreseeable future, including, costs associated with our efforts to commercialize IBSRELA, which we began selling in the U.S.

We believe that we will continue to expend substantial resources for the foreseeable future, including, costs associated with our efforts to commercialize IBSRELA, which we began selling in the U.S.

in March 2022, cost associated with our efforts to pursue approval for our NDA for tenapanor for the Hyperphosphatemia Indication through the FDR process, and Advisory Committee meeting;

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

• whether we are successful in our efforts under the FDR process, including the Advisory Committee meeting to be convened as part of 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 ADL, and the time and cost associated with such path;

• whether we are successful in our efforts under the FDR process, including the Advisory Committee meeting scheduled for November 16, 2022, and whether we are ultimately able 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;

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

• the manufacturing costs of IBSRELA and XPHOZAH;

• the selling and marketing costs associated with IBSRELA and, if approved, XPHOZAH;

• the manufacturing, selling and marketing costs associated with IBSRELA and, if approved, XPHOZAH;

• 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 timing, receipt and amount of revenue, if any, that may be received from KKC in connection with the 2022 KKC Amendment;

• the timing, receipt, and amount of sales of, or royalties on, tenapanor, if any;

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

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

• the timing, receipt, and amount of royalties we may receive as a result of sales of tenapanor by our collaboration partners in China and Canada, if any;

• the cash requirements for the development of product candidates, including RDX013 and RDX020;

• 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 limit, reduce or terminate our commercialization of IBSRELA, delay, limit, reduce or terminate our efforts to secure approval for XPHOZAH for the Hyperphosphatemia Indication, or clinical trials for tenapanor.

If adequate funds are not available to us on a timely basis, we may be required to limit or reduce our commercialization of IBSRELA, or delay, limit, reduce or terminate our efforts to secure approval for XPHOZAH for the Hyperphosphatemia Indication or, if approved, the commercialization of XPOZAH, or delay or limit additional clinical trials for tenapanor.

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 commercialization of IBSRELA or the development and commercialization of XPHOZAH, if approved, through the use of alternative structures.

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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 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.

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.

On each of March 31, 2022 and September 19, 2022, we received a letter from Nasdaq, 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.

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 comply 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.

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.

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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 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.

We can provide no assurance that in the event of a delisting any 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.

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

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in March 2022, and have generated limited revenue from product sales to date.

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 (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.

We have no other products approved for sale and have received a CRL from the FDA for our NDA for tenapanor 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”).

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

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

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

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• our ability to obtain and sustain an adequate level of coverage and reimbursement for IBSRELA by third-party payors;

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

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

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The overall commercial success of IBSRELA will depend on a number of factors, including the following:

• the ability of the third-party manufacturers we contract with to provide an adequate (in amount and quality) supply of product to support the launch and market demand for IBSRELA;

• the ability of the third-party manufacturers we contract with to provide an adequate (in amount and quality) supply of product to support the market demand for IBSRELA;

• our ability to obtain and sustain an adequate level of coverage and reimbursement for IBSRELA by third-party payors;

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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.

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 Hyperphosphatemia Indication.

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.

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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 of unclear of clinical significance.

Following an End-of-Review Type A meeting (“End of Review Meeting”) in October 2021, with the Division, we submitted a Formal Dispute Resolution Request (“FDRR”) in December 2021.

In December 2021, we submitted a Formal Dispute Resolution Request (“FDRR”) in.

The FDRR was focused on demonstrating that the data submitted in the NDA supported the clinical significance of the treatment effect of tenapanor.

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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 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 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.

Even if we are successful in obtaining regulatory approval for tenapanor for the Hyperphosphatemia Indication, the expense and time required to do so could adversely impact our ability to successfully commercialize XPHOZAH for the Hyperphosphatemia Indication.

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

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• acceptance of XPHOZAH as safe, effective and well-tolerated by patients and the medical community, and, the extent to which the issuance of a CRL by the FDA has impacted the potential acceptance of XPHOZAH as safe, effective and well-tolerated;

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

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

• the availability, perceived advantages, relative cost, relative safety and relative efficacy of XPHOZAH compared to alternative and competing treatments;

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If we fail or are delayed in the development of our internal sales, marketing and distribution capabilities, the commercialization of IBSRELA could be adversely impacted.

Our operating activities may be restricted as a result of covenants related to the indebtedness under our loan and security agreement and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our business.

On February 23, 2022, we entered into a loan and security agreement with SLR Investment Corp.

(the “Lender”) pursuant to which the Lender agreed to provide us a $50.0 million term loan facility with a maturity date of March 1, 2027.

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.

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 March 2024, with principal repayments commencing on April 1, 2024, 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.

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

we breach any of our covenants under the loan and security agreement, subject to specified cure periods with respect to certain breaches;

the Lender determines that a material adverse change has occurred;

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

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

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

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 activities necessary to commercialize IBSRELA, and/or if approved, XPHOZAH, or clinical trials for tenapanor.

The Lender could also exercise its 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).

Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events.

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

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As a result, absent further legislation or regulation on this matter, beginning in 2025, oral ESRD-related drugs without injectable or intravenous equivalents may be included in the ESRD bundle and separate Medicare payment for these drugs will no longer be available, as is the case today under Medicare Part D.

While it is too early to project the full impact that bundling may have on sales of XPHOZAH, if approved and commercialized, and on our business should XPHOZAH be brought into the bundle in 2025, or at any time, we may be unable to sell XPHOZAH for the Hyperphosphatemia Indication, if approved, to dialysis providers on a profitable basis if third-party payors reduce their current levels of payment, or if our costs of production are higher than levels necessary for an appropriate gross margin after payment of all discounts, rebates and chargebacks.

Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, Japan, China and other countries has and will continue to put pressure on the pricing and usage of IBSRELA and XPHOZAH, even if regulatory approval is received in such countries.

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As a result, or if maximum or available manufacturing capacities are insufficient to meet demand, our development or our commercialization efforts for IBSRELA, and/or, if approved, XPHOZAH, may be materially harmed.

On February 23, 2022, we entered into a loan and security agreement with SLR Investment Corp.

(the “Lender”) pursuant to which the Lender agreed to provide us with a loan facility for up to $50.0 million with a maturity date of March 1, 2027, and on August 1, 2022, we entered into an amendment to the loan and security agreement (collectively, the “2022 Loan Agreement.”).

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 March 31, 2023 and (ii) our achievement of certain product revenue milestone targets described in the 2022 Loan Agreement.

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

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

we breach any of our covenants under the loan and security agreement, subject to specified cure periods with respect to certain breaches;

the Lender determines that a material adverse change has occurred;

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

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

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

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 limit or reduce our commercialization activities for IBSRELA, or delay, limit, reduce or terminate our efforts to secure approval for XPHOZAH for the Hyperphosphatemia Indication or, if approved, the commercialization of XPOZAH.

Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events.

Additional Risks Related to Our Business and Industry

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There can be no assurances that any additional clinical study that we determine to conduct with RDX013 will be successful.

Additionally, if we conduct additional clinical trials with RDX013, we could encounter delays in our future development if any 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.

Additionally, if we conduct additional clinical trials with RDX013 or any other product candidates, we could encounter delays in our future development if any 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.

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.

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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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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.

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.

Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

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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.

The continuing effects of the coronavirus outbreak may result in delays in the manufacture of tenapanor, or in the delivery of key intermediates or raw materials required to manufacture tenapanor or delays in clinical development activities by us, or our collaboration partners.

The continuing effects of the coronavirus pandemic may result in delays in the manufacture of tenapanor, or in the delivery of key intermediates or raw materials required to manufacture tenapanor or delays in clinical development activities by us, or our collaboration partners.

Such effects could also materially and negatively impact our ability to successfully commercialize IBSRELA, and/or, if approved, XPHOZAH, or the ability of our collaboration partners to successfully commercialize such products, if approved for marketing and sale by the foreign regulatory authorities, including our ability, and that of our collaboration partners to educate physicians and patients about the benefits, administration and use of the product.

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The full effects of the COVID-19 remain unknown.

The extent to which the outbreak may continue to impact our business, including, our commercialization and manufacturing will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as access to physician offices for our commercial and medical teams, business closures or business disruptions.

We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.

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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.

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.

Our CMOs manufacture tenapanor API outside of the United States, and we may seek and obtain approval to commercialize IBSRELA and 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.

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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.

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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• federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent.

In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes;

addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes;

• the federal Civil Monetary Penalties law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

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Following a national referendum and enactment of legislation by the government of the United Kingdom, the United Kingdom formally withdrew from the European Union and ratified a trade and cooperation agreement governing its future relationship with the European Union.

The agreement, which is being applied provisionally from January 1, 2021, until it is ratified by the European Parliament and the Council of the European Union, addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework including procedures for dispute resolution, among other things.

The agreement, which entered into force on May 1, 2021, addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework including procedures for dispute resolution, among other things.

Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the United Kingdom and the European Union as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal.

These developments, or the perception that any related developments could occur, have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital.

liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital.

Any of these factors could have a material adverse effect on our business, financial condition and results of operations and reduce the price of our common stock.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

Use of Proceeds

Not applicable.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

DEFAULTS UPON SENIOR SECURITIES

Not applicable.

MINE SAFETY DISCLOSURES

Not applicable.

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