What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-02 compared with 2023-10-31 · 148 added, 129 removed, 182 unchanged (60% of the section changed)

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Tenapanor, branded as XPHOZAH ® , was approved by the U.S.

Food and Drug Administration (FDA) on October 17, 2023, to reduce serum phosphorus in adults with chronic kidney disease (CKD) on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

We also have a development stage asset, RDX013 for adult patients with CKD and/or heart failure with hyperkalemia, or elevated serum potassium, and a discovery phase asset, RDX020 for adult patients with metabolic acidosis, a serious electrolyte disorder, in patients with CKD.

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

We realized our first product sales of IBSRELA (tenapanor) in March 2022.

As of September 30, 2023, we had an accumulated deficit of $817.4 million.

We expect to continue to incur substantial operating losses for the foreseeable future as we invest in the commercialization of IBSRELA and XPHOZAH (tenapanor);

and incur manufacturing and development cost for tenapanor.

To date, we have funded our operations from the sale and issuance of common stock and convertible preferred stock, funds from our collaboration partnerships, which includes license fees, milestones and product supply revenue, funds from our loan agreements with our lenders, as well as from sales of IBSRELA.

Food and Drug Administration (U.S.

FDA) on October 17, 2023, to reduce serum phosphorus in adults with chronic kidney disease (CKD) on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

We realized our first product sales of IBSRELA in March 2022 and realized our first product sales of XPHOZAH in November 2023.

As of March 31, 2024, we had an accumulated deficit of $872.7 million.

We expect to continue to incur operating losses for the foreseeable future as we invest in the commercialization of IBSRELA and XPHOZAH, incur manufacturing and development cost for tenapanor, and incur R&D costs related to potential new product candidates.

(SLR), as amended on August 1, 2022, February 9, 2023 and October 17, 2023 (collectively, the 2022 Loan Agreement), as well as from sales of IBSRELA and XPHOZAH.

Our Commercial Products

IBSRELA for IBS-C

Our unique discovery platform and deep understanding of the primary mechanism of sodium transport in the intestine resulted in our discovery and development of IBSRELA, a first-in-class, FDA approved, sodium hydrogen exchange 3 (NHE3) inhibitor for the treatment of IBS-C in adults.

Our unique discovery platform and deep understanding of the primary mechanism of sodium transport in the intestine resulted in our discovery and development of IBSRELA, a first-in-class, U.S.

FDA approved, sodium hydrogen exchange 3 (NHE3) inhibitor for the treatment of IBS-C in adults.

IBSRELA acts locally in the gut and is minimally absorbed.

IBS-C is a gastrointestinal (GI) disorder characterized by both abdominal pain and altered bowel movements, and depending on the diagnostic criteria employed, is estimated to affect up to 13 million people in the U.S.

IBS-C is a gastrointestinal (GI) disorder characterized by both abdominal pain and altered bowel habits.

IBS-C is associated with significantly impaired quality of life, reduced productivity, and substantial economic burden.

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In addition, market research indicated a favorable response to the IBSRELA product profile as a novel mechanism therapy.

These dynamics enabled a targeted promotional focus on patients currently being managed for IBS-C by the approximately 9,000 high-writing healthcare providers that account for 50% of IBS-C prescriptions.

Central to our go to market strategy for IBSRELA has been our highly experienced specialty sales force, many with existing relationships across their GI target base, full company engagement, and innovative peer-to-peer and digital initiatives.

These dynamics enabled a targeted promotional focus on patients currently being managed for IBS-C by the approximately 9,000 high-writing healthcare providers who account for approximately 50% of IBS-C prescriptions.

Central to our go to market strategy for IBSRELA has been our highly experienced specialty sales force, many with existing relationships across their GI target base, and omnichannel digital initiatives.

We expect competition for IBSRELA will come largely from the three prescription products indicated for IBS-C:

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Generic lubiprostone is also available in the U.S.

Additionally, over-the-counter products, not indicated for IBS-C are commonly used to treat the constipation component of IBS-C, alone and in combination with the IBS-C-indicated prescription therapies.

Additionally, over-the-counter products and prescription therapies, not indicated for IBS-C are commonly used to treat the constipation component of IBS-C, alone and in combination with the IBS-C-indicated prescription therapies.

We have established commercial agreements with Shanghai Fosun Pharmaceutical Industrial Development Co.

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Knight is currently marketing IBSRELA in Canada.

In October 2023, we announced that Fosun Pharma received approval from the Hong Kong Department of Health for the marketing application for tenapanor for the treatment of irritable bowel syndrome with constipation (IBS-C).

In October 2023, we announced that Fosun Pharma received approval from the Hong Kong Department of Health for the marketing application for tenapanor for the treatment of IBS-C.

XPHOZAH to Reduce Serum Phosphorus in Adults with CKD on dialysis as Add-on Therapy in Patients who have an Inadequate Response to Phosphate Binders or who are Intolerant of any Dose of Phosphate Binder Therapy

On October 17, 2023, XPHOZAH (tenapanor) is a first-in-class medicine received approval from the FDA to market XPHOZAH in the U.S.

to reduce serum phosphorus in adults with chronic kidney disease (CKD) on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy XPHOZAH has a differentiated mechanism of action and acts locally in the gut to inhibit NHE3.

On October 17, 2023, XPHOZAH, a first-in-class phosphate absorption inhibitor, received approval from the U.S.

FDA to market XPHOZAH in the U.S.

XPHOZAH has a differentiated mechanism of action and acts locally in the gut to inhibit NHE3.

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

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and approximately eighty percent of those patients are being treated with phosphate lowering therapies.

Seventy-seven percent of patients treated with phosphate binders to treat hyperphosphatemia were unable to consistently maintain phosphorous levels <=5.5 mg/dL over a six-month period.

In addition, approximately seventy percent of patients treated with phosphate binders to treat hyperphosphatemia were unable to consistently maintain phosphorous levels <=5.5 mg/dL over a six-month period.

XPHOZAH is the first therapy for phosphate management that blocks phosphate absorption at the primary site of uptake.

We currently expect XPHOZAH to be available to patients in November 2023.

We recognized our first sales of XPHOZAH in the U.S.

in November 2023.

For our commercial launch of XPHOZAH, we designed a market-responsive commercial strategy and built a commercial organization highly experienced and knowledgeable of the nephrology market.

The dynamics of the hyperphosphatemia market reflect an established patient base, limited number of competitors all confined to a single mechanism of action, concentrated number of prescribers, and recognized unmet need.

In addition, market research indicated a high level of awareness, interest and intent to adopt XPHOZAH upon approval and favorable response to the XPHOZAH product profile as a novel mechanism therapy.

These dynamics enabled a targeted promotional focus on patients currently being managed for hyperphosphatemia by the approximately 8,000 nephrology healthcare providers who write approximately 80% of phosphate lowering therapy prescriptions.

Central to our go to market strategy for XPHOZAH is our highly experienced specialty sales force, many with existing relationships across their nephrology target base, and innovative omnichannel digital initiatives.

XPHOZAH is indicated to reduce serum phosphorus in adults with chronic kidney disease (CKD) on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

The various types of phosphate binders commercialized in the U.S.

include the following:

Calcium acetate (several prescription brands including PhosLo and Phoslyra);

Lanthanum carbonate (Fosrenol);

Sevelamer hydrochloride (Renagel);

Sevelamer carbonate (Renvela);

Sucroferric oxyhydroxide (Velphoro);

and Ferric citrate (Auryxia).

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

Additionally, over-the-counter calcium carbonate, such as Tums and Caltrate, is also used to bind phosphorus.

In addition to the currently available phosphate binders, we are aware of at least four other binders in development, including fermagate (Alpharen), an iron-based binder in Phase 3 being developed by Opko Health, Inc.;

PT20, an iron-based binder in Phase 3 being developed by Shield Therapeutics, AP-301 in Phase 2 being developed by Alebund Pharmaceutical (Hong Kong) Limited;

and Oxylanthanum Carbonate (OLC), which has demonstrated pharmacodynamic bioequivalence to Fosrenol.

OLC is being developed by Unicycive Therapeutics, which has announced its plans to seek U.S.

FDA approval via the 505(b)(2) pathway.

Additionally, Chugai and Alebund are developing EOS789, an inhibitor of phosphate transporters NaPi-2b, PiT-1, and PiT-2, thus far studied in a phase 1 clinical trial.

In November 2023, XPHOZAH was granted orphan drug designation by the U.S.

FDA for the treatment of pediatric hyperphosphatemia.

We have established commercial agreements with Kyowa Kirin, Co.

(Kyowa Kirin) in Japan, Fosun Pharma in China and Knight in Canada for tenapanor for hyperphosphatemia.

In July 2023, we announced that an NDA for tenapanor had been accepted for review by China’s Center for Drug Evaluation of the National Medical Products Administration (NMPA) for the control of serum phosphorus in adult patients with CKD on hemodialysis.

In September 2023, we announced that Kyowa Kirin received approval from the Japanese Ministry of Health, Labour and Welfare (MHLW) for the new drug application (NDA) for tenapanor for the improvement of hyperphosphatemia in adult patients with CKD on dialysis.

In July 2023, we announced that a New Drug Application (NDA) for tenapanor had been accepted for review by China’s Center for Drug Evaluation of the National Medical Products Administration (NMPA) for the control of serum phosphorus in adult patients with CKD on hemodialysis.

In September 2023, we announced that Kyowa Kirin received approval from the Japanese Ministry of Health, Labour and Welfare (MHLW) for the NDA for tenapanor for the improvement of hyperphosphatemia in adult patients with CKD on dialysis.

In February 2024, Kyowa Kirin announced the launch of tenapanor, marketed as PHOZEVEL ® , for patients in Japan.

Discovery and Developmental Assets

We have a small molecule potassium secretagogue program, RDX013, for the potential treatment of hyperkalemia, or elevated serum potassium.

Hyperkalemia is a common problem in patients with heart and kidney disease, particularly in patients taking customary blood pressure medications known as renin-angiotensin-aldosterone system (RAAS) inhibitors.

RDX013 is a novel mechanism agent designed to target the underlying biological mechanisms of potassium secretion to lower elevated potassium.

We have completed a Phase 2 dose ranging clinical trial evaluating the safety and efficacy of RDX013 for the treatment of hyperkalemia in CKD patients who are not on dialysis.

While the results of the study demonstrated an acceptable safety and tolerability profile for RDX013 and supported proof of concept in its ability to lower serum potassium levels, with statistically significant reductions compared to placebo after eight days of treatment, the study did not meet its primary endpoint of significantly reducing serum potassium levels compared to placebo after four weeks of treatment.

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

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

We do not currently expect to meaningfully advance either of these two assets until such time as we have determined our available resources can support additional activities after prioritization of the commercialization of IBSRELA and XPHOZAH.

We have suspended further investment in RDX013, our small molecule potassium secretagogue program, and in RDX020, our discovery program targeting the inhibition of the chloride bicarbonate exchanger for the treatment of metabolic acidosis.

We are continuing to actively develop our strategy related to our pipeline.

Collaboration Partners

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Under the terms of the Knight Agreement, Knight paid us a $2.3 million non-refundable, one-time payment in March 2018.

We may also be eligible to receive approximately CAD 22.2 million for development and commercialization milestones, or approximately $16.4 million at the currency exchange rate on September 30, 2023, of which $0.7 million has been received and recognized as revenue as of September 30, 2023.

We may also be eligible to receive approximately CAD 22.2 million for development and commercialization milestones, or approximately $16.3 million at the currency exchange rate on March 31, 2024, of which $0.7 million has been received and recognized as revenue as of March 31, 2024.

We are also eligible to receive royalties throughout the term of the agreement, and a transfer price for manufacturing services.

The variable consideration related to the remaining development milestone payments has not been included in the transaction price as they were fully constrained at September 30, 2023.

In November 2017, we entered into an exclusive license agreement with Kyowa Kirin (2017 Kyowa Kirin Agreement) for the development, commercialization and distribution of tenapanor in Japan for cardiorenal indications.

Under the terms of the 2017 Kyowa Kirin Agreement, we received a $30.0 million upfront payment from Kyowa Kirin, and we may be entitled to receive up to $55.0 million in total development and regulatory milestones, of which $35.0 million has been recognized as revenue and $20.0 million has been received as of September 30, 2023.

We may also be eligible to receive approximately ¥8.5 billion for commercialization milestones, or approximately $57.0 million at the currency exchange rate on September 30, 2023, as well as reimbursement of costs plus a reasonable overhead for the supply of product and royalties on net sales throughout the term of the agreement.

Under the terms of the 2017 Kyowa Kirin Agreement, we received a $30.0 million upfront payment from Kyowa Kirin, and we may be entitled to receive up to $55.0 million in total development and regulatory milestones, of which $35.0 million has been received and recognized as revenue as of March 31, 2024.

We may also be eligible to receive approximately ¥8.5 billion for commercialization milestones, or approximately $56.2 million at the currency exchange rate on March 31, 2024, as well as reimbursement of costs plus a reasonable overhead for the supply of product and royalties on net sales throughout the term of the agreement.

As discussed in Note 7.

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Deferred Royalty Obligation Related to the Sale of Future Royalties , the future royalties we may receive under the 2017 Kyowa Kirin Agreement will be remitted to HealthCare Royalty Partners IV, L.P.

pursuant to a Royalty and Sales Milestone Interest Acquisition Agreement.

As consideration for the reduction in the royalty rate, Kyowa Kirin agreed to pay us up to an additional $40.0 million payable in two tranches, with the first payment received in the fourth quarter of 2022 following Kyowa Kirin’s October 2022 filing with the Japanese MHLW of its application for marketing approval for tenapanor and the second payment due following Kyowa Kirin’s receipt of regulatory approval to market tenapanor for hyperphosphatemia in Japan.

(HCR) pursuant to a Royalty and Sales Milestone Interest Acquisition Agreement (HCR Agreement).

As consideration for the reduction in the royalty rate, Kyowa Kirin agreed to pay us up to an additional $40.0 million, which was received and recognized as revenue as of September 2023 as described below.

In October 2022, we announced that Kyowa Kirin submitted an NDA to the Japanese MHLW for tenapanor for the improvement of hyperphosphatemia in adult patients with CKD on dialysis, which resulted in payment to us from Kyowa Kirin for an aggregate of $35.0 million for milestone payments and payments under the 2022 Amendment.

In September 2023, we announced that Kyowa Kirin received approval from the Japanese MHLW for the NDA for tenapanor for the improvement of hyperphosphatemia in adult patients with chronic kidney disease on dialysis, which results in payment to us from Kyowa Kirin for an aggregate of $30.0 million for milestone payments and payments under the 2022 Amendment.

In September 2023, we announced that Kyowa Kirin received approval from the Japanese MHLW for the NDA for tenapanor for the improvement of hyperphosphatemia in adult patients with chronic kidney disease on dialysis, which resulted in payment to us from Kyowa Kirin for an aggregate of $30.0 million for milestone payments and payments under the 2022 Amendment.

In February 2024, Kyowa Kirin announced the launch of tenapanor, marketed as PHOZEVEL ® , for patients in Japan and during the first quarter of 2024, we began to recognize non-cash royalty revenue related to the sale of future royalties, which will be remitted to HCR in accordance with the HCR Agreement.

In December 2017, we entered into an exclusive license agreement with Fosun Pharma (Fosun Agreement) for the development and commercialization of tenapanor in China for both hyperphosphatemia and IBS-C.

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This acceptance triggered a $2.0 million milestone payment to us under the terms of the Fosun Agreement, which we received in the third quarter of 2023.

We may be entitled to receive development and commercialization milestones of up to $113.0 million, of which $5.0 million has been received and recognized as revenue as of September 30, 2023, as well as reimbursement of cost plus a reasonable overhead for the supply of product and tiered royalties on net sales ranging from the mid-teens to 20%.

In October 2023, we announced that the FDA has approved XPHOZAH to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

This triggered an additional $3.0 million milestone payment to us under the terms of the Fosun Agreement, which we expect to receive during the fourth quarter of 2023.

In October 2023, we announced that the U.S.

FDA has approved XPHOZAH to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

This triggered an additional $3.0 million milestone payment to us under the terms of the Fosun Agreement, which we received during the first quarter of 2024.

Also, in October 2023, we announced that Fosun Pharma received approval from the Hong Kong Department of Health for the marketing application for tenapanor for the treatment of irritable bowel syndrome with constipation (IBS-C).

We may be entitled to receive development and commercialization milestones of up to $113.0 million, of which $8.0 million has been received and recognized as revenue as of March 31, 2024, as well as reimbursement of cost plus a reasonable overhead for the supply of product and tiered royalties on net sales ranging from the mid-teens to 20%.

Critical Accounting Policies and Significant Judgments and Estimates

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Actual results could differ materially from these estimates.

The critical accounting policies that we believe impact significant judgments and estimates used in the preparation of our condensed financial statements presented in this report are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K filed with the SEC on March 2, 2023.

During the nine months ended September 30, 2023, we did not adopt any new critical accounting policies and significant judgements and estimates.

During the three months ended March 31, 2024, we did not adopt any new critical accounting policies and significant judgements and estimates.

Recent Accounting Pronouncements

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Financial Operations Overview

Our revenue to date has been generated primarily through license, research and development collaborative agreements with various collaboration partners.

We realized our first commercial product sales of IBSRELA beginning in March 2022.

Our revenue to date has been generated primarily through a combination of product sales and payments in connection with license, research and development collaborative agreements with our various collaboration partners.

We realized our first commercial product sales of IBSRELA beginning in March 2022 and our first commercial product sales of XPHOZAH in November 2023.

In the future, we may generate revenue from a combination of our own product sales and payments in connection with our current or future collaborative partnerships, including license fees, other upfront payments, milestone payments, royalties and payments for drug product and/or drug substance.

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

the extent to which we are successful in our commercialization of IBSRELA;

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

the extent to which we are successful in our commercialization of IBSRELA and XPHOZAH;

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

whether and the extent to which we are successful in our commercialization of XPHOZAH;

whether or when XPHOZAH, along with other oral ESRD-related drugs without an injectable or intravenous equivalent, are bundled into the end stage renal disease (ESRD) prospective payment system, and the manner in which such introduction into the ESRD prospective payment system may occur, including the length of any applicable Transitional Drug Add-on Payment Adjustment (TDAPA) period, the amount of the add-on payment available during the TDAPA period and whether, and the extent to which, the ESRD PPS base rate is adjusted following any applicable TDAPA period;

whether or when XPHOZAH, along with other oral End Stage Renal Disease-related drugs without an injectable or intravenous equivalent, are bundled into the end stage renal disease prospective payment system (ESRD PPS), and the manner in which such introduction into the ESRD PPS may occur, including the length of any applicable Transitional Drug Add-on Payment Adjustment (TDAPA) period, the amount of the add-on payment available during the TDAPA period and whether, and the extent to which, the ESRD PPS base rate is adjusted following any applicable TDAPA period;

the timing and progress of goods and services provided pursuant to our current or future collaborative partnerships;

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

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

the timing and amount of any payments to us relating to the aforementioned milestones;

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Cost of Goods Sold

Cost of sales consists of the cost of commercial goods sold to our Customers.

Cost of product sales consists of the cost of commercial goods sold to our Customers.

Other cost of revenue consists of the cost of materials sold to our international partners under product supply agreements, as well as payments due to AstraZeneca AB (AstraZeneca) based on sales of tenapanor.

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Otherwise, such costs are expensed as research and development.

A portion of the costs of IBSRELA units recognized as revenue during the three and nine months ended September 30, 2023 were expensed prior to the fourth quarter of 2021, at which time our intent to commercialize IBSRELA was established and we commenced preparation for the commercial launch of IBSRELA.

We believe our cost of goods sold for the three and nine months ended September 30, 2023 would have been $1.0 million and $3.4 million higher, respectively, if we had not previously expensed certain material and production costs with respect to the units sold.

We believe our cost of goods sold for the three and nine months ended September 30, 2022 would have been $0.2 million and $1.2 million higher, respectively, if we had not previously expensed certain material and production costs with respect to the units sold.

As of September 30, 2023 and December 31, 2022, we had approximately $25.0 million and $28.0 million, respectively, of inventory on hand that was previously expensed as research and development expense and will not be reported as cost of goods sold in future periods when sales of IBSRELA are recognized as revenue.

A portion of the costs of IBSRELA and XPHOZAH units recognized as revenue during the three months ended March 31, 2024 were expensed in periods prior to the commencement of capitalization of inventory costs for each respective product.

We believe our cost of goods sold for the three months ended March 31, 2024 would have been $1.2 million higher if we had not previously expensed certain material and production costs with respect to the units sold.

We believe our cost of goods sold for the three months ended March 31, 2023 would have been $0.4 million higher if we had not previously expensed certain material and production costs with respect to the units sold.

As of March 31, 2024 and December 31, 2023, we had approximately $21.3 million and $21.8 million, respectively, of inventory on hand that was previously expensed as research and development expense and will not be reported as cost of goods sold in future periods when sales of IBSRELA are recognized as revenue.

Other cost of revenue includes payments due to AstraZeneca, which under the terms of a termination agreement entered into in 2015 (AstraZeneca Termination Agreement) is entitled to (i) future royalties at a rate of 10% of net sales of tenapanor or other NHE3 products by us or our licensees, and (ii) 20% of non-royalty revenue received from our collaboration partners in connection with the development and commercialization of tenapanor or other NHE3 products.

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To date, we have recognized an aggregate of $32.4 million as other cost of revenue under the AstraZeneca Termination Agreement.

See details in Note 6, Collaboration and Licensing Agreements , under AstraZeneca, in the notes to our financial statement of this Quarterly Report on Form 10-Q.

See details in Note 6, Collaboration and Licensing Agreements , under AstraZeneca, in the notes to our financial statements of this Quarterly Report on Form 10-Q.

Research and Development

Pursuant to the October 2021 restructuring plan, we eliminated our internal research organization and we do not currently expect to meaningfully advance our efforts with respect to our discovery and developmental assets until such time as we have determined our available resources can support additional activities after prioritization of the commercialization of IBSRELA and XPHOZAH.

We recognize all research and development expenses as they are incurred to support the discovery, research, development and manufacturing of our product candidates.

Research and development expenses include, but are not limited to, the following:

R&D expenses include, but are not limited to, the following:

• external research and development expenses incurred under agreements with consultants, third-party contract research organizations (CROs) and investigative sites where a substantial portion of our clinical studies are conducted, and with contract manufacturing organizations where our clinical supplies are produced;

• expenses associated with supplies and materials consumed in connection with our research operations;

• expenses associated with producing XPHOZAH prior to FDA approval;

• expenses associated with producing discovery and developmental assets prior to FDA approval;

• expenses associated with producing XPHOZAH prior to U.S.

FDA approval;

• expenses associated with producing discovery and developmental assets prior to U.S.

FDA approval;

• other costs associated with research, clinical development and regulatory activities;

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Interest Expense

Interest expense represents the interest paid on our loan payable.

Interest expense represents the interest associated with our 2022 Loan Agreement.

Non-cash interest expense related to the sale of future royalties

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As further described in Note 7.

Deferred Royalty Obligation Related to the Sale of Future Royalties , in June 2022, we and HealthCare Royalty Partners IV, L.P.

(HCR) entered into a Royalty and Sales Milestone Interest Acquisition Agreement (HCR Agreement).

Deferred Royalty Obligation Related to the Sale of Future Royalties , in June 2022, we and HCR entered into the HCR Agreement.

Under the terms of the HCR Agreement, HCR agreed to pay us up to $20.0 million in exchange for the royalty payments and commercial milestone payments (collectively the Royalty Interest Payments) that we may receive under our 2017 License Agreement with Kyowa Kirin based upon Kyowa Kirin's net sales of tenapanor in Japan for hyperphosphatemia.

As part of the HCR Agreement, we received a $10.0 million upfront payment from HCR in June 2022 and recorded it as a deferred royalty obligation on our balance sheet.

Non-cash interest expense will be recognized over the life of the HCR Agreement using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of future royalty payments to be received from Kyowa Kirin.

As part of the HCR Agreement, we have received a $10.0 million upfront payment and a $5.0 million milestone payment from HCR, which we recorded as a deferred royalty obligation on our balance sheet.

Non-cash interest expense is recognized over the life of the HCR Agreement using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of future royalty payments to be received from Kyowa Kirin.

Other Income, net

Other income, net consists of interest income earned on our cash and cash equivalents and available-for-sale investments, the periodic revaluation of the exit fee related to our loan, gains on sales of property and equipment, and currency exchange gains and losses.

Other income, net consists of interest income earned on our cash, cash equivalents and available-for-sale investments, the periodic revaluation of the exit fee related to our 2022 Loan Agreement and currency exchange gains and losses.

RESULTS OF OPERATIONS

The results of operations as of September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, for any other interim period, or for any other future year.

Comparison of the three and nine months ended September 30, 2023 and 2022

The results of operations as of March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, for any other interim period, or for any other future year.

Comparison of the three months ended March 31, 2024 and 2023

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

Three Months Ended September 30, Change

2022 Nine Months Ended September 30, Change

Three Months Ended March 31, Change

2024 2023 $ %

Product sales, net $ 43,512 $ 11,355 $ 32,157 283 %

Product supply revenue 2,092 92 2,000 2174 % 5,354 1,058 4,296 406 %

Product supply revenue 2,126 2 2,124 (a)

Licensing revenue 17 12 5 42 %

Non-cash royalty revenue related to the sale of future royalties 368 — 368 (a)

Total revenues $ 46,023 $ 11,369 $ 34,654 305 %

The increase in product sales, net during the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is attributable to increased net product sales for IBSRELA.

The increase in product supply revenue during the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is attributable to increased product supply revenue to Kyowa Kirin.

The increase in licensing revenue during the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is attributable to earning an aggregate of $30.0 million for milestones under the 2017 Kyowa Kirin Agreement and payments under the 2022 Kyowa Kirin Amendment upon approval from the Japanese MHLW for the NDA for tenapanor for the improvement of hyperphosphatemia in adult patients with CKD on dialysis.

We also earned a $2.0 million milestone under the terms of the Fosun Agreement upon acceptance of the NDA for tenapanor by China’s Center for Drug Evaluation of the NMPA for the control of serum phosphorus in adult patients with CKD on hemodialysis.

(a) Percent change is not meaningful.

Below is a summary of our net product sales by product (dollars in thousands):

Three Months Ended March 31,

Product sales, net:

IBSRELA $ 28,361 $ 11,355

XPHOZAH 15,151 —

Total product sales, net $ 43,512 $ 11,355

The increase in product sales, net during the three months ended March 31, 2024 as compared to the same periods in 2023 is attributable to increased net product sales for IBSRELA, which is primarily driven by increased demand, as well as sales from XPHOZAH following the launch of the product in the fourth quarter of 2023.

The increase in product supply revenue during the three months ended March 31, 2024 as compared to the same periods in 2023 is attributable to increased product supply revenue to Kyowa Kirin.

The increase in licensing revenue during the three months ended March 31, 2024 as compared to the same periods in 2023 is attributable to royalties earned under the Knight Agreement.

Non-cash royalty revenue during the three months ended March 31, 2024 is attributable to royalties from Kyowa Kirin for sales of PHOZEVEL in Japan, which will be remitted to HCR in accordance with the HCR Agreement.

Cost of Goods Sold

Below is a summary of our cost of goods sold (dollars in thousands):

Three Months Ended September 30, Change

2022 Nine Months Ended September 30, Change

Three Months Ended March 31, Change

2024 2023 $ %

Cost of sales $ 644 $ 230 $ 414 180 % $ 1,508 $ 287 $ 1,221 425 %

Cost of product sales $ 1,013 $ 372 $ 641 172 %

Other cost of revenue 6,115 1,165 4,950 425 %

Total cost of goods sold $ 7,128 $ 1,537 $ 5,591 364 %

The increase to cost of sales for the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is attributable to cost of goods sold for increased net product sales of IBSRELA.

The increase to other cost of revenue for the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is primarily attributable to payments due to AstraZeneca under the AstraZeneca Termination Agreement as well as cost of goods sold for product supply sold to our international partners.

The increase to cost of product sales during the three months ended March 31, 2024 as compared to the same period in 2023 is primarily attributable to cost of goods sold for increased net product sales of IBSRELA and XPHOZAH.

The increase to other cost of revenue during the three months ended March 31, 2024 as compared to the same period in 2023 is primarily attributable to the growth in payments due to AstraZeneca under the AstraZeneca Termination Agreement, driven by increases in our product sales, as well as cost of goods sold for increased product supply sold to our collaboration partners.

Operating Expenses

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

Three Months Ended September 30, Change

2022 Nine Months Ended September 30, Change

Three Months Ended March 31, Change

2024 2023 $ %

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

Three Months Ended September 30, Change

2022 Nine Months Ended September 30, Change

Three Months Ended March 31, Change

2024 2023 $ %

4 unchanged sentences

Total research and development expenses $ 10,579 $ 9,093 $ 1,486 16 %

The change in our external R&D expenses for the three months ended September 30, 2023 as compared to the same period in 2022 is primarily the result of tenapanor manufacturing expenses as well as regulatory consulting expenses related to the FDA appeal of XPHOZAH.

The change in our external R&D expenses for the nine months ended September 30, 2023 as compared to the same period in 2022 is primarily the result of clinical trial and pharmacovigilance activities related to IBSRELA.

The change in our R&D expenses during the three months ended March 31, 2024 as compared to the same period in 2023 is primarily the result of clinical trial and pharmacovigilance activities related to IBSRELA.

Selling, General and Administrative

The increase in selling, general and administrative expenses for the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is primarily due to increased costs associated with the commercial launch of IBSRELA as well as preparation for the commercial launch of XPHOZAH and increases in expenses associated with administrative support functions as our company has grown in headcount and activity level.

The increase in selling, general and administrative expenses during the three months ended March 31, 2024 as compared to the same period in 2023 is primarily due to increased costs associated with the commercialization of IBSRELA and XPHOZAH and increases in expenses associated with administrative support functions as our company has grown in headcount and activity level.

The increases consisted of headcount and related personnel costs and external spending for disease awareness initiatives, commercial infrastructure, and strategy.

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Below is a summary of our interest expense (dollars in thousands):

Three Months Ended September 30, Change

2022 Nine Months Ended September 30, Change

Three Months Ended March 31, Change

2024 2023 $ %

Interest expense $ (2,356) $ (1,028) $ (1,328) 129 %

The increase in interest expense for the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is due to a higher variable interest rate applied to our loan balance primarily resulting from market fluctuations.

The increase in interest expense during the three months ended March 31, 2024 as compared to the same period in 2023 is due to a higher variable interest rate applied to our loan balance primarily resulting from market fluctuations, as well as a larger loan balance outstanding following the draw of an additional $22.5 million for the Term B Loan in October 2023 and $50.0 million for the Term C Loan in March 2024.

Non-Cash Interest Expense Related to the Sale of Future Royalties

Below is a summary of our non-cash interest expense (dollars in thousands):

Three Months Ended September 30, Change

2022 Nine Months Ended September 30, Change

Three Months Ended March 31, Change

2024 2023 $ %

Non-cash interest expense related to the sale of future royalties $ (1,702) $ (969) $ (733) 76 %

Non-cash interest expense related to the sales of future royalties for the three and nine months ended September 30, 2023 is accrued on the deferred royalty obligation that we recorded following the receipt of the $10.0 million upfront payment from HCR during June 2022.

We recognized nine months of expense during the nine months ended September 30, 2023 compared to approximately three months of expense during the nine months ended September 30, 2022.

The increase in non-cash interest expense related to the sales of future royalties during the three months ended March 31, 2024 as compared to the same period in 2023 is due to a higher liability balance following the receipt a $5.0 million payment in October 2023 as a result of Kyowa Kirin's receipt of regulatory approval to market tenapanor for hyperphosphatemia in Japan, as well as prospective adjustments to the imputed interest rate and the related amortization of the deferred royalty obligation.

Other Income, net

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

Three Months Ended September 30, Change

2022 Nine Months Ended September 30, Change

Three Months Ended March 31, Change

2024 2023 $ %

Other income, net $ 2,339 $ 1,302 $ 1,037 80 %

The increase in other income, net for the three and nine months ended September 30, 2023 as compared to the same periods in 2022 is primarily due to increased income on our investments resulting from both higher interest rates and larger investment balances throughout the period.

The increase in other income, net during the three months ended March 31, 2024 as compared to the same period in 2023 is primarily due to increased income on our investments resulting from both higher interest rates and larger investment balances throughout the period.

Liquidity and Capital Resources

Below is a summary of our cash, cash equivalents and short-term investments (dollars in thousands):

September 30, 2023 December 31, 2022 Change $ Change %

March 31, 2024 December 31, 2023 Change $ Change %

Cash and cash equivalents $ 36,147 $ 21,470 $ 14,677 68 %

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Total liquid funds $ 202,578 $ 184,299 $ 18,279 10 %

As of September 30, 2023, we had cash, cash equivalents and short-term investments of approximately $165.1 million.

In August 2021, we filed a prospectus supplement under a Registration Statement which was filed in July 2020 for the offering, issuance and sale by us of up to a maximum aggregate offering price of $150.0 million of our common stock that was authorized for issuance and sale, from time to time, under a sales agreement (2021 Open Market Sales Agreement) we entered into with Jefferies LLC (Jefferies), pursuant to which we, from time to time, sold up to $150.0 million in shares of our common stock through Jefferies.

Pursuant to the 2021 Open Market Sales Agreement, Jefferies, as our sales agent, received a commission of up to 3% of the gross sales price for shares of common stock sold under the 2021 Open Market Sales Agreement.

As of March 2023, we had received the maximum gross proceeds of $150.0 million under the 2021 Open Market Sales Agreement, which included 15.5 million shares of our common stock for which we received gross proceeds of $51.9 million during the quarter ended March 31, 2023.

As of March 31, 2024, we had cash, cash equivalents and short-term investments of approximately $202.6 million.

In January 2023, we filed a Form S-3 registration statement, which became effective in January 2023 (2023 Registration Statement), containing (i) a base prospectus for the offering, issuance and sale by us of up to a maximum aggregate offering price of $250.0 million of our common stock, preferred stock, debt securities, warrants and/or units, from time to time in one or more offerings;

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Pursuant to the 2023 Open Market Sales Agreement, Jefferies, as sales agent, may receive a commission of up to 3.0% of the gross sales price for shares of common stock sold under the 2023 Open Market Sales Agreement.

During the three months ended September 30, 2023, we initiated sales pursuant to the 2023 Open Market Sales Agreement resulting in the issuance of 13.8 million shares of our common stock and receipt of gross proceeds of $58.4 million at a weighted average sales price of approximately $4.24 per share.

During the nine months ended September 30, 2023, we completed sales pursuant to the 2023 Open Market Sales Agreement resulting in the issuance of 16.8 million shares of our common stock and receipt of gross proceeds of $70.0 million at a weighted average sales price of approximately $4.17 per share.

During the three months ended March 31, 2024 and 2023, we completed no sales pursuant to the 2023 Open Market Sales Agreement.

As of March 31, 2024, we have sold 16.8 million shares of our common stock and received gross proceeds of $70.0 million at a weighted average sales price of approximately $4.17 per share under the 2023 Open Market Sales Agreement.

In February 2022, we entered into a loan and security agreement (2022 Loan Agreement) with SLR Investment Corp (SLR).

The 2022 Loan Agreement was subsequently amended on August 1, 2022 and February 9, 2023.

The 2022 Loan Agreement as amended provides for a senior secured term loan facility, with $27.5 million funded at closing and an additional $22.5 million that we may borrow on or prior to December 20, 2023;

provided that (i) we have received approval by the FDA for our NDA for XPHOZAH by November 30, 2023 and (ii) we have achieved certain product revenue milestone targets described in the 2022 Loan Agreement.

The 2022 Loan Agreement as amended through February 9, 2023 provides for a senior secured term loan facility, with $27.5 million funded at closing (the Term A Loan) and an additional $22.5 million that we could borrow on or prior to December 20, 2023;

provided that (i) we received approval by the U.S.

FDA for our NDA for XPHOZAH by November 30, 2023 and (ii) we achieved certain product revenue milestone targets described in the 2022 Loan Agreement (the Term B Loan).

The initial funding of $27.5 million was used to repay the 2018 Loan and is funding our ongoing operations.

We had $25.0 million principal from the 2018 Loan outstanding as of the closing date, as well as the 2018 Exit Fee in the amount of $1.5 million.

We paid the 2018 Exit Fee in October 2023 following approval from the FDA for XPHOZAH to reduce serum phosphorus in adults with chronic kidney disease (CKD) on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

We paid the 2018 Exit Fee in October 2023 following approval from the U.S.

FDA for XPHOZAH to reduce serum phosphorus in adults with chronic kidney disease (CKD) on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

As discussed in Note 9.

Derivative Liabilities , in connection with entering into the 2022 Loan Agreement, we entered into the 2022 Exit Fee agreement, whereby we agreed to pay an exit fee in the amount of 2% of the 2022 Loan funded if certain conditions are met.

Derivative Liabilities , in connection with entering into the 2022 Loan Agreement, we entered into the 2022 Exit Fee agreement, as amended, whereby we agreed to pay an exit fee in the amount of 2% of the Term A Loan and Term B Loan by SLR if certain conditions are met.

Notwithstanding the prepayment or termination of the 2022 Loan, the 2022 Exit Fee will expire on February 23, 2032.

In October 2022, we announced that our collaboration partner, Kyowa Kirin, submitted an NDA to the Japanese MHLW for tenapanor for the improvement of hyperphosphatemia in adult patients with CKD on dialysis.

In accordance with the terms of the 2022 Amendment, Kyowa Kirin paid an aggregate of $35.0 million to us in milestone payments and payments associated with the 2022 Amendment during the quarter ended December 31, 2022.

We received these payments in October 2023.

In October 2023, we entered into a Third Amendment (the Third Amendment) to the 2022 Loan Agreement by and between us and the 2022 Lenders.

As discussed in Note 9.

Borrowing , the Third Amendment, among other things, (1) provides us with the option to draw an additional $50.0 million of committed capital by March 15, 2024 (the Term C Loan);

Borrowing , the Third Amendment, among other things, (1) provided us with the option to draw an additional $50.0 million of committed capital by March 15, 2024 (the Term C Loan);

(2) provides us with the option to draw up to an additional $50.0 million of uncommitted capital, subject to approval by the Agent's investment committee (the Term D Loan);

and (3) extends the interest-only period for the Four Loans to December 31, 2026, effective upon our decision to draw the Term B Loan in the amount of $22.5 million.

We provided the Agent with notice of our decision to draw the Term B Loan in October 2023 to support the commercial launch of XPHOZAH.

We have incurred operating losses since inception in 2007 and our accumulated deficit as of September 30, 2023 is $817.4 million.

Our primary sources of cash have been from the sale and issuance of common stock (in both public offerings and private placements), private placements of convertible preferred stock, funds from our collaboration partnerships, funds from our 2018 Loan Agreement, as amended, and 2022 Loan Agreement, as amended, as well as from sales of IBSRELA.

and (3) extended the interest-only period for the Four Loans to December 31, 2026, effective upon our decision to draw the Term B Loan in the amount of $22.5 million.

In October 2023, we provided the Agent with notice of our decision to draw the Term B Loan to support the commercial launch of XPHOZAH and received the proceeds of the Term B Loan.

In February 2024, we provided the Agent with notice of our decision to draw the Term C Loan to support the commercial launch of XPHOZAH and received the proceeds of the Term C Loan in March 2024.

In September 2023, we announced that Kyowa Kirin received approval from the Japanese MHLW for the NDA for tenapanor for the improvement of hyperphosphatemia in adult patients with chronic kidney disease on dialysis, which resulted in payment to us from Kyowa Kirin for an aggregate of $30.0 million for milestone payments and payments under the 2022 Amendment and entitled us to a $5.0 million payment under the terms of the HCR Agreement.

We received these payments in October 2023.

We have incurred operating losses since inception in 2007 and our accumulated deficit as of March 31, 2024 is $872.7 million.

Our primary uses of cash have been to fund operating expenses, primarily research and development expenditures, as well as pre-commercial and commercial expenses.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Since December 31, 2021 and prior to September 30, 2023, our liquidity position raised substantial doubt about our ability to continue as a going concern.

We have addressed our operating cash flow requirements through cash generated from product sales of IBSRELA, proceeds from the sale of shares of our common stock under our at-the-market offering, and from the receipt of milestones payments from our collaboration partners and payments from our Japanese collaboration partner under the second amendment to our License Agreement, which were received in October 2023.

We believe our available cash, cash equivalents and short-term investments as of September 30, 2023 will be sufficient to fund our operations for at least a period of one year from the issuance of these condensed financial statements.

We addressed our operating cash flow requirements through cash generated from product sales of IBSRELA and XPHOZAH, proceeds from the sale of shares of our common stock under our at-the-market offering, from the receipt of milestones payments from our collaboration partners and payments from Kyowa Kirin under the 2022 Amendment to our License Agreement, which were received in October 2023, and from proceeds of the Term B and Term C Loans.

We believe our available cash, cash equivalents and short-term investments as of March 31, 2024 will be sufficient to fund our planned operations for at least a period of one year from the issuance of these financial statements.

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

1 unchanged sentence

There are no assurances that our efforts to meet our operating cash flow requirements will be successful.

If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations for at least the next twelve months following the issuance of these condensed financial statements, our liquidity, financial condition and business prospects will be materially affected.

If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations following the issuance of these financial statements, our liquidity, financial condition and business prospects will be materially affected.

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

2 unchanged sentences

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

• whether or when XPHOZAH, along with other oral ESRD-related drugs without an injectable or intravenous equivalent, are bundled into the ESRD prospective payment system (ESRD PPS), the manner in which such introduction into the ESRD PPS may occur, including the length of any applicable TDAPA period and the amount of the add-on payment available during the TDAPA period and whether, and the extent to which, the ESRD PPS base rate is adjusted following any applicable TDAPA period;

• whether or when XPHOZAH, along with other oral ESRD-related drugs without an injectable or intravenous equivalent, are bundled into the ESRD PPS, the manner in which such introduction into the ESRD PPS may occur, including the length of any applicable TDAPA period and the amount of the add-on payment available during the TDAPA period and whether, and the extent to which, the ESRD PPS base rate is adjusted following any applicable TDAPA period;

• 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;

1 unchanged sentence

• 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 discovery and/or development of other potential product candidates, including RDX013 and RDX020;

• the cash requirements for the discovery and/or development of other potential product candidates;

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

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

• the payment of interest and principal related to our loan and security agreement entered into with SLR Investment Corp.

in February 2022, as amended to date.

• the payment of interest and principal related to the 2022 Loan Agreement, as amended to date.

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

1 unchanged sentence

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

Nine Months Ended September 30, Change 2023 vs.

Three Months Ended March 31, Change

2024 2023 $ %

Net cash used in operating activities $ (35,722) $ (44,795) $ 9,073 (20) %

Net cash (used in) provided by investing activities (101,681) 16,974 (118,655) (699) %

Net cash used in investing activities (2,572) (9,777) 7,205 (74) %

Net cash provided by financing activities 52,971 50,919 2,052 4 %

Net decrease in cash and cash equivalents $ (62,373) $ (10,800) $ (51,573) 478 %

Net increase (decrease) in cash and cash equivalents $ 14,677 $ (3,653) $ 18,330 (502) %

Cash Flows from Operating Activities

Net cash used in operating activities during the nine months ended September 30, 2023 decreased by $3.3 million as compared to the same period in 2022 primarily as a result of our lower net loss, partially offset by changes in our working capital, including a $30.8 million increase in accounts receivable.

Accounts receivable was elevated at September 30, 2023 due to $30.0 million receivable from Kyowa Kirin for milestone payments and payments under the 2022 Amendment that were earned in September 2023 and received in October 2023.

Net cash used in operating activities during the three months ended March 31, 2024 decreased by $9.1 million as compared to the same period in 2023 primarily due to changes in our operating assets and liabilities, as well as an improvement in net loss after adjustments to reconcile net loss to net cash used in operating activities such as stock-based compensation and non-cash interest expense.

Cash Flows from Investing Activities

Net cash (used in) provided by investing activities during the nine months ended September 30, 2023 decreased by $118.7 million as compared to the same periods in 2022 due to increased investment purchases during 2023, as we invested higher levels of cash as compared to the same period in 2022.

Net cash used in investing activities during the three months ended March 31, 2024 decreased by $7.2 million as compared to the same period in 2023 primarily due to the timing of our investment maturities and purchases.

Cash Flows from Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2023 increased by $63.8 million as compared to the same periods in 2022 primarily due to net proceeds from issuance of our common stock pursuant to the at the market offerings of $119.2 million during the nine months ended September 30, 2023 compared to $52.8 million during the nine months ended September 30, 2022.

In addition, during the nine months ended September 30, 2022 we expended net $6.1 million in conjunction with entering into the 2022 Loan and repaying the principal outstanding under the 2018 Loan and received net proceeds of $9.6 million from the sale of future royalties to HCR.

Net cash provided by financing activities during the three months ended March 31, 2024 increased by $2.1 million as compared to the same period in 2023 primarily due to $49.8 million net proceeds from the Term C Loan received in March 2024, as well as from the issuance of common stock under our equity incentive and stock purchase plans.

Largely offsetting these amounts, were proceeds from the issuance of common stock under the 2021 Open Market Sales Agreement which were received in 2023.

We did not receive any proceeds under the 2021 Open Market Sales Agreement in 2024.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis