What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 198 added, 140 removed, 524 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2024 December 31,

30 unchanged sentences

500,000,000 shares authorized;

235,401,398 and 232,453,190 shares issued and outstanding as of June 30, 2024 and December 31, 2023

236,890,431 and 232,453,190 shares issued and outstanding as of September 30, 2024 and December 31, 2023

Additional paid-in capital 1,048,073 1,012,773

Accumulated deficit ( 889,985 ) ( 846,204 )

Accumulated other comprehensive (loss) income ( 101 ) 224

Accumulated other comprehensive income 185 224

Total stockholders’ equity 158,297 166,816

2 unchanged sentences

ARDELYX, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

12 unchanged sentences

Total operating expenses 80,280 41,301 221,269 112,665

Loss from operations ( 13,630 ) ( 16,624 ) ( 38,308 ) ( 42,688 )

Income (loss) from operations 2,233 7,398 ( 36,075 ) ( 35,290 )

Interest expense ( 3,357 ) ( 1,107 ) ( 9,039 ) ( 3,210 )

1 unchanged sentence

Other income, net 2,282 1,460 6,766 4,308

Loss before provision for income taxes ( 16,387 ) ( 17,121 ) ( 42,784 ) ( 43,880 )

Income (loss) before provision for income taxes ( 766 ) 6,829 ( 43,550 ) ( 37,051 )

Provision for income taxes 43 200 231 214

Net loss $ ( 16,454 ) $ ( 17,121 ) $ ( 42,972 ) $ ( 43,894 )

Net loss per share of common stock - basic and diluted $ ( 0.07 ) $ ( 0.08 ) $ ( 0.18 ) $ ( 0.21 )

Shares used in computing net loss per share - basic and diluted 234,571,192 214,951,127 233,818,576 211,009,029

Comprehensive loss:

Net loss $ ( 16,454 ) $ ( 17,121 ) $ ( 42,972 ) $ ( 43,894 )

Unrealized losses on available-for-sale securities ( 81 ) ( 190 ) ( 325 ) ( 156 )

Comprehensive loss $ ( 16,535 ) $ ( 17,311 ) $ ( 43,297 ) $ ( 44,050 )

Net income (loss) $ ( 809 ) $ 6,629 $ ( 43,781 ) $ ( 37,265 )

Net income (loss) per share of common stock - basic and diluted $ ( 0.00 ) $ 0.03 $ ( 0.19 ) $ ( 0.17 )

Shares used in computing net income (loss) per share - basic 235,911,399 222,782,229 234,516,305 214,976,555

Shares used in computing net income (loss) per share - diluted 235,911,399 227,894,335 234,516,305 214,976,555

Comprehensive income (loss):

Net income (loss) $ ( 809 ) $ 6,629 $ ( 43,781 ) $ ( 37,265 )

Unrealized gains (losses) on available-for-sale securities 286 9 ( 39 ) ( 147 )

Comprehensive income (loss) $ ( 523 ) $ 6,638 $ ( 43,820 ) $ ( 37,412 )

The accompanying notes are an integral part of these condensed financial statements.

1 unchanged sentence

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three and Six Months ended June 30, 2024 and 2023

For the Three and Nine Months ended September 30, 2024 and 2023

(in thousands, except shares)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance as of March 31, 2024 233,959,744 $ 23 $ 1,023,610 $ ( 872,722 ) $ ( 20 ) $ 150,891

Issuance of common stock for services 40,549 — 257 — — 257

Balance as of June 30, 2024 235,401,398 $ 23 $ 1,036,244 $ ( 889,176 ) $ ( 101 ) $ 146,990

Issuance of common stock under employee stock purchase plan 226,297 — 1,189 — — 1,189

Issuance of common stock upon exercise of options 663,358 1 1,507 — — 1,508

1 unchanged sentence

Stock-based compensation — — 9,133 — — 9,133

Unrealized losses on available-for-sale securities — — — — ( 81 ) ( 81 )

Unrealized gains on available-for-sale securities — — — — 286 286

Net loss — — — ( 809 ) — ( 809 )

Balance as of June 30, 2024 235,401,398 $ 23 $ 1,036,244 $ ( 889,176 ) $ ( 101 ) $ 146,990

Six Months Ended June 30, 2024

Balance as of September 30, 2024 236,890,431 $ 24 $ 1,048,073 $ ( 889,985 ) $ 185 $ 158,297

Nine Months Ended September 30, 2024

Common Stock Additional

12 unchanged sentences

Net loss — — — ( 43,781 ) — ( 43,781 )

Balance as of June 30, 2024 235,401,398 $ 23 $ 1,036,244 $ ( 889,176 ) $ ( 101 ) $ 146,990

Three Months Ended June 30, 2023

Balance as of September 30, 2024 236,890,431 $ 24 $ 1,048,073 $ ( 889,985 ) $ 185 $ 158,297

Three Months Ended September 30, 2023

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance as of March 31, 2023 214,462,050 $ 21 $ 932,330 $ ( 806,910 ) $ ( 20 ) $ 125,421

Issuance of common stock for services 86,095 — 337 — — 337

Balance as of June 30, 2023 217,862,921 $ 22 $ 947,380 $ ( 824,031 ) $ ( 210 ) $ 123,161

Issuance of common stock under employee stock purchase plan 269,739 — 670 — — 670

Issuance of common stock upon exercise of options 28,227 — 40 — — 40

2 unchanged sentences

Stock-based compensation — — 3,489 — — 3,489

Unrealized losses on available-for-sale securities — — — — ( 190 ) ( 190 )

Net loss — — — ( 17,121 ) — ( 17,121 )

Balance as of June 30, 2023 217,862,921 $ 22 $ 947,380 $ ( 824,031 ) $ ( 210 ) $ 123,161

Six Months Ended June 30, 2023

Unrealized gains on available-for-sale securities — — — — 9 9

Net income — — — 6,629 — 6,629

Balance as of September 30, 2023 232,133,132 $ 23 $ 1,008,741 $ ( 817,402 ) $ ( 201 ) $ 191,161

Nine Months Ended September 30, 2023

Common Stock Additional

13 unchanged sentences

Net loss — — — ( 37,265 ) — ( 37,265 )

Balance as of June 30, 2023 217,862,921 $ 22 $ 947,380 $ ( 824,031 ) $ ( 210 ) $ 123,161

Balance as of September 30, 2023 232,133,132 $ 23 $ 1,008,741 $ ( 817,402 ) $ ( 201 ) $ 191,161

The accompanying notes are an integral part of these condensed financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

57 unchanged sentences

The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for the entire year ending December 31, 2024, or for any other interim period or future year.

The results for the three and nine months ended September 30, 2024 are not necessarily indicative of results to be expected for the entire year ending December 31, 2024, or for any other interim period or future year.

Use of Estimates

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Actual results could materially differ from those estimates.

As of June 30, 2024, we had cash, cash equivalents and short-term investments of approximately $ 186.0 million.

We have incurred operating losses since inception in 2007 and our accumulated deficit as of June 30, 2024 is $ 889.2 million.

As of September 30, 2024, we had cash, cash equivalents and short-term investments of approximately $ 190.4 million.

We have incurred operating losses since inception in 2007 and our accumulated deficit as of September 30, 2024 is $ 890.0 million.

We have 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, the receipt of milestone payments from our collaboration partners and payments from our Japanese collaboration partner under the second amendment to our License Agreement, and funds from our loan agreements with SLR Investment Corp.

(SLR), as amended.

We believe our available cash, cash equivalents and short-term investments as of June 30, 2024 will be sufficient to fund our planned operations for at least a period of one year from the issuance of these condensed financial statements.

We believe our available cash, cash equivalents and short-term investments as of September 30, 2024 will be sufficient to fund our planned operations for at least a period of one year from the issuance of these condensed financial statements.

Summary of Significant Accounting Policies

28 unchanged sentences

CASH, CASH EQUIVALENTS AND INVESTMENTS

Securities classified as cash, cash equivalents and short-term investments as of June 30, 2024 and December 31, 2023 are summarized below (in thousands):

June 30, 2024

Securities classified as cash, cash equivalents and short-term investments as of September 30, 2024 and December 31, 2023 are summarized below (in thousands):

September 30, 2024

Gross Unrealized

6 unchanged sentences

government-sponsored agency bonds $ 53,052 $ 52 $ ( 6 ) $ 53,098

treasury securities 36,697 47 ( 1 ) 36,743

Commercial paper 30,738 54 — 30,792

Corporate bonds 17,371 37 — 17,408

Asset-backed securities 2,975 3 — 2,978

Yankee bonds 1,955 — ( 1 ) 1,954

Total short-term investments 142,788 193 ( 8 ) 142,973

16 unchanged sentences

We invest our cash in high quality securities of financial and commercial institutions.

These securities are carried at fair value, which is based on readily available market information, with unrealized gains and losses included in accumulated other comprehensive loss within stockholders’ equity on our balance sheets.

These securities are carried at fair value, which is based on readily available market information, with unrealized gains and losses included in accumulated other comprehensive income (loss) within stockholders’ equity on our balance sheets.

We use the specific identification method to determine the amount of realized gains or losses on sales of marketable securities.

Realized gains or losses have not been significant and are included in other income, net, in the statement of operations and comprehensive loss.

All of the short-term available-for sale securities held as of June 30, 2024 and December 31, 2023 had contractual maturities of less than one year .

Realized gains or losses have not been significant and are included in other income, net, in the statement of operations and comprehensive income (loss).

All of our available-for sale securities held as of September 30, 2024 and December 31, 2023 had contractual maturities of less than one year .

Our available-for-sale securities are subject to a periodic impairment review.

1 unchanged sentence

When we evaluate an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, intent to sell, and whether it is more likely than not we will be required to sell the investment before the recovery of its cost basis.

If an investment is other-than-temporarily impaired or subject to credit losses, we write it down through the statement of operations and comprehensive loss to its fair value and establish that value as a new cost basis for the investment.

Our unrealized losses as of June 30, 2024 and December 31, 2023 were not material.

We determined that none of our available-for-sale securities were other-than-temporarily impaired as of June 30, 2024 and December 31, 2023, and no investment was in a continuous unrealized loss position for more than one year.

If an investment is other-than-temporarily impaired or subject to credit losses, we write it down through the statement of operations and comprehensive income (loss) to its fair value and establish that value as a new cost basis for the investment.

Our unrealized losses as of September 30, 2024 and December 31, 2023 were not material.

We determined that none of our available-for-sale securities were other-than-temporarily impaired as of September 30, 2024 and December 31, 2023, and no investment was in a continuous unrealized loss position for more than one year.

As such, we believe that it is more likely than not that the investments will be held until maturity or a forecasted recovery of fair value.

9 unchanged sentences

The following table sets forth the fair value of our financial assets and liabilities that are measured or disclosed on a recurring basis by level within the fair value hierarchy (in thousands):

June 30, 2024

September 30, 2024

Fair Value Level 1 Level 2 Level 3

1 unchanged sentence

government-sponsored agency bonds 53,098 — 53,098 —

treasury securities

36,743 — 36,743 —

Commercial paper 30,792 — 30,792 —

Corporate bonds

17,408 — 17,408 —

Asset-backed securities 2,978 — 2,978 —

Yankee bonds 1,954 — 1,954 —

Total $ 182,842 $ 39,869 $ 142,973 $ —

14 unchanged sentences

government-sponsored agency bonds, U.S.

treasury securities, commercial paper, and asset-backed securities as Level 2.

treasury securities, commercial paper, corporate bonds, asset-backed securities, and Yankee bonds as Level 2.

In certain cases, where there is limited activity or less transparency around inputs to valuation, securities or derivative liabilities, such as the 2022 Exit Fee valuation as of December 31, 2023, as defined and discussed in Note 9.

Derivative Liabilities , are classified as Level 3.

As of June 30, 2024, the conditions for payment of the 2022 Exit Fee were met and it was therefore valued at its full contractual amount as there were no unobservable inputs.

The carrying amounts reflected in the condensed balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at both June 30, 2024 and December 31, 2023 due to their short-term nature.

Based on our procedures under the expected credit loss model, including an assessment of unrealized losses in our portfolio, we concluded that any unrealized losses on our marketable securities were not attributable to credit and, therefore, we have no t recorded an allowance for credit losses for these securities as of June 30, 2024 and December 31, 2023.

The conditions for payment of the 2022 Exit Fee were met at the measurement date of June 30, 2024 and it was therefore valued at its full contractual amount of $ 1.0 million as of that date.

The 2022 Exit Fee was included in accounts payable and accrued liabilities on the accompanying condensed balance sheets at $ 1.0 million and $ 0.7 million as of September 30, 2024 and December 31, 2023, respectively.

The carrying amounts reflected in the condensed balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at both September 30, 2024 and December 31, 2023 due to their short-term nature.

Fair Value of Debt

The principal amount outstanding under our term loan facilities is subject to a variable interest rate.

Therefore, we believe the carrying amount of the term loan facility approximates fair value as of June 30, 2024 and December 31, 2023.

Therefore, we believe the carrying amount of the term loan facility approximates fair value as of September 30, 2024 and December 31, 2023.

Borrowing for a description of the Level 2 inputs used to estimate the fair value of the liability.

The carrying value of the deferred royalty obligation related to the sale of future royalties approximates its fair value as of June 30, 2024 and December 31, 2023 and is based on our current estimates of future royalties and commercialization milestones expected to be paid to us by Kyowa Kirin Co., Ltd.

The carrying value of the deferred royalty obligation related to the sale of future royalties approximates its fair value as of September 30, 2024 and December 31, 2023 and is based on our current estimates of future royalties and commercialization milestones expected to be paid to us by Kyowa Kirin Co., Ltd.

(Kyowa Kirin) over the life of the agreement.

Deferred Royalty Obligation Related to the Sale of Future Royalties for a description of the Level 3 inputs used to estimate the fair value of the liability.

Inventory as of June 30, 2024 and December 31, 2023 consisted of the following (in thousands):

June 30, 2024 December 31, 2023

Inventory as of September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

September 30, 2024 December 31, 2023

Raw materials $ 25,992 $ 22,920

5 unchanged sentences

Total $ 85,158 $ 49,487

In addition to inventory, we had prepaid commercial manufacturing of $ 14.8 million and $ 23.2 million as of June 30, 2024 and December 31, 2023, respectively, which consisted of prepayments to third party contract manufacturing organizations, including prepayments of zero and $ 4.2 million as of June 30, 2024 and December 31, 2023 that are expected to be converted into inventory after 12 months.

Total revenues during the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

In addition to inventory, we had prepaid commercial manufacturing of $ 16.7 million and $ 23.2 million as of September 30, 2024 and December 31, 2023, respectively, which consisted of prepayments to third party contract manufacturing organizations, including prepayments of zero and $ 4.2 million as of September 30, 2024 and December 31, 2023 that are expected to be converted into inventory after 12 months.

Total revenues during the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

7 unchanged sentences

Total revenues $ 98,241 $ 56,391 $ 217,486 $ 90,093

Revenue from Customers who contributed greater than 10% of our total gross product revenue during the three and six months ended June 30, 2024 and 2023 was as follows (as a percentage of total gross product revenue):

Three Months Ended June 30, Six Months Ended June 30,

Revenue from customers who contributed greater than 10% of our total gross product revenue during the three and nine months ended September 30, 2024 and 2023 was as follows (as a percentage of total gross product revenue):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

8 unchanged sentences

Credits/payments ( 8,974 ) ( 33,925 ) ( 16,271 ) ( 59,170 )

Balance as of June 30, 2024 $ 933 $ 9,838 $ 6,909 $ 17,680

Balance as of September 30, 2024 $ 1,578 $ 13,707 $ 8,035 $ 23,320

Adjustments to prior period provisions recorded in the current period were not material.

12 unchanged sentences

Based on our assessment, management determined that the license and the manufacturing supply services were its material performance obligations at the inception of the 2017 Kyowa Kirin Agreement, and as such, each of the performance obligations is distinct.

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 June 30, 2024.

We may also be eligible to receive approximately ¥ 8.5 billion for commercialization milestones, or approximately $ 52.8 million at the currency exchange rate on June 30, 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.

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 September 30, 2024.

We may also be eligible to receive approximately ¥ 8.5 billion for commercialization milestones, or approximately $ 59.8 million at the currency exchange rate on September 30, 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.

1 unchanged sentence

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

The variable consideration related to the remaining milestone payments was fully constrained at June 30, 2024.

The variable consideration related to the remaining milestone payments was fully constrained at September 30, 2024.

In April 2022, we entered into a second amendment to the 2017 Kyowa Kirin Agreement (2022 Amendment).

5 unchanged sentences

In October 2022, we announced that Kyowa Kirin submitted a New Drug Application (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.

We received these payments during the fourth quarter of 2022 and recorded them as licensing revenue on our condensed statement of operations and comprehensive loss.

We received these payments during the fourth quarter of 2022 and recorded them as licensing revenue on our condensed statement of operations and comprehensive income (loss).

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 CKD 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.

We received these payments in October 2023 and recorded them as licensing revenue on our condensed statement of operations and comprehensive loss when earned during the three months ended September 30, 2023.

We received these payments in October 2023 and recorded them as licensing revenue on our condensed statement of operations and comprehensive income (loss) when earned during the three months ended September 30, 2023.

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

During the three and six months ended June 30, 2024, we recognized $ 0.6 million and $ 1.0 million, respectively, of non-cash royalty revenue related to the sale of future royalties which we remit to HCR upon receipt in accordance with the HCR Agreement.

During the three and six months ended June 30, 2024, we recognized $ 13 thousand and $ 2.1 million, respectively, of product supply revenue pursuant to the 2017 Kyowa Kirin Agreement.

During the three and six months ended June 30, 2023, we recognized $ 3.3 million of product supply revenue pursuant to the 2017 Kyowa Kirin Agreement.

During the three and nine months ended September 30, 2024, we recognized $ 0.8 million and $ 1.8 million, respectively, of non-cash royalty revenue related to the sale of future royalties which we remit to HCR upon receipt in accordance with the HCR Agreement.

During the three and nine months ended September 30, 2024, we recognized $ 5.3 million and $ 7.5 million, respectively, of product supply revenue pursuant to the 2017 Kyowa Kirin Agreement.

During the three and nine months ended September 30, 2023, we recognized $ 2.1 million and $ 5.4 million, respectively, of product supply revenue pursuant to the 2017 Kyowa Kirin Agreement.

Shanghai Fosun Pharmaceutical Industrial Development Co.

4 unchanged sentences

Based on our assessment, we determined that the license and the manufacturing supply services represented the material performance obligations at the inception of the agreement and, as such, each of the performance obligations are distinct.

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 June 30, 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 %.

The variable consideration related to the remaining development milestone payments was fully constrained at June 30, 2024.

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 September 30, 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 %.

The variable consideration related to the remaining development milestone payments was fully constrained at September 30, 2024.

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.

This acceptance triggered a $ 2.0 million milestone payment to us under the terms of the Fosun Agreement.

We received this payment during the third quarter of 2023 and recorded it as licensing revenue on our condensed statement of operations and comprehensive loss when earned during the three months ended September 30, 2023.

We received this payment during the third quarter of 2023 and recorded it as licensing revenue on our condensed statement of operations and comprehensive income (loss) when earned during the three months ended September 30, 2023.

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

2 unchanged sentences

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).

During the three and six months ended June 30, 2024 and 2023, we did not recognize a material amount of revenue pursuant to the Fosun Agreement.

During the three and nine months ended September 30, 2024, we did not recognize a material amount of revenue pursuant to the Fosun Agreement.

During the three and nine months ended September 30, 2023, we recognized $ 2.0 million of licensing revenue pursuant to the Fosun Agreement.

Knight Therapeutics, Inc.

2 unchanged sentences

Based on our assessment, we determined that the license and the manufacturing supply services were the material performance obligations at the inception of the agreement and, as such, each of the performance obligations are distinct.

Under the terms of the Knight Agreement, we received a $ 2.3 million non-refundable, one-time upfront payment in March 2018 and may be eligible to receive additional development and commercialization milestone payments worth up to CAD 22.2 million, or approximately $ 16.2 million at the currency exchange rate on June 30, 2024, of which $ 0.7 million has been received and recognized as revenue as of June 30, 2024.

Under the terms of the Knight Agreement, we received a $ 2.3 million non-refundable, one-time upfront payment in March 2018 and may be eligible to receive additional development and commercialization milestone payments worth up to CAD 22.2 million, or approximately $ 16.4 million at the currency exchange rate on September 30, 2024, of which $ 0.7 million has been received and recognized as revenue as of September 30, 2024.

We are also eligible to receive royalties ranging from the mid-single digits to the low twenties throughout the term of the agreement, and a transfer price for manufacturing services.

The variable consideration related to the remaining development milestone payments was fully constrained at June 30, 2024.

During the three and six months ended June 30, 2024 and 2023, we did not recognize a material amount of revenue pursuant to the Knight Agreement.

The variable consideration related to the remaining development milestone payments was fully constrained at September 30, 2024.

During the three and nine months ended September 30, 2024 and 2023, we did not recognize a material amount of revenue pursuant to the Knight Agreement.

AstraZeneca AB (AstraZeneca)

In June 2015, we entered into a termination agreement with AstraZeneca (AstraZeneca Termination Agreement) pursuant to which we have agreed to pay AstraZeneca (i) future royalties at a royalty 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 a new collaboration partner should we elect to license, or otherwise provide rights to develop and commercialize tenapanor or other NHE3 products, up to a maximum of $ 75.0 million in aggregate for (i) and (ii).

As of June 30, 2024, to date in aggregate, we have recognized $ 40.2 million of the $ 75.0 million, which has been recorded as other cost of revenue on our condensed statements of operations and comprehensive loss.

During the three and six months ended June 30, 2024, we recognized $ 7.9 million and $ 12.6 million, respectively, as other cost of revenue related to the AstraZeneca Termination Agreement.

During the three and six months ended June 30, 2023 we recognized $ 1.9 million and $ 3.0 million, respectively, as other cost of revenue related to the AstraZeneca Termination Agreement.

As of September 30, 2024, to date in aggregate, we have recognized $ 50.3 million of the $ 75.0 million, which has been recorded as other cost of revenue on our condensed statements of operations and comprehensive income (loss).

During the three and nine months ended September 30, 2024, we recognized $ 10.0 million and $ 22.7 million, respectively, as other cost of revenue related to the AstraZeneca Termination Agreement.

During the three and nine months ended September 30, 2023 we recognized $ 5.7 million and $ 8.7 million, respectively, as other cost of revenue related to the AstraZeneca Termination Agreement.

Deferred Revenue

5 unchanged sentences

Reclassify amounts to be recognized in the next twelve months 4,086 ( 4,086 ) 3,265 ( 3,265 )

Balance at June 30, $ 10,829 $ 9,613 $ 5,959 $ 9,238

Balance at September 30, $ 7,272 $ 12,770 $ 4,072 $ 10,290

DEFERRED ROYALTY OBLIGATION RELATED TO THE SALE OF FUTURE ROYALTIES

16 unchanged sentences

We periodically assess the estimated royalty payments from Kyowa Kirin and, to the extent that the amount or timing of such payments is materially different than our original estimates, we prospectively adjust the imputed interest rate and the related amortization of the deferred royalty obligation.

As of June 30, 2024, our effective interest rate used to amortize the liability is 28.8 %.

During the three and six months ended June 30, 2024, we recognized $ 1.6 million and $ 3.3 million, respectively, of non-cash interest expense related to the deferred royalty obligation.

During the three and six months ended June 30, 2023, we recognized $ 1.0 million and $ 1.9 million, respectively, of non-cash interest expense related to the deferred royalty obligation.

As of June 30, 2024, we have received $ 0.4 million royalty payments from Kyowa Kirin and the deferred royalty obligation has been reduced accordingly.

As of September 30, 2024, our effective interest rate used to amortize the liability is 33.3 %.

During the three and nine months ended September 30, 2024, we recognized $ 1.9 million and $ 5.2 million, respectively, of non-cash interest expense related to the deferred royalty obligation.

During the three and nine months ended September 30, 2023, we recognized $ 0.9 million and $ 2.9 million, respectively, of non-cash interest expense related to the deferred royalty obligation.

As of September 30, 2024, we have received $ 1.0 million royalty payments from Kyowa Kirin and the deferred royalty obligation has been reduced accordingly.

Solar Capital and Western Alliance Bank Loan Agreement

11 unchanged sentences

On February 23, 2022 (Closing Date), we entered into a loan and security agreement (2022 Loan Agreement) with SLR Investment Corp.

as collateral agent (Agent), and the lenders listed in the 2022 Loan Agreement (collectively, the 2022 Lenders).

The 2022 Loan Agreement was subsequently amended in August 2022 (the First Amendment) and February 2023 (the Second Amendment).

We concluded that the First Amendment and the Second Amendment were modifications to the 2022 Loan Agreement.

as collateral agent (Agent or SLR), and the lenders listed in the 2022 Loan Agreement (collectively, the 2022 Lenders).

The 2022 Loan Agreement was subsequently amended in August 2022 (the First Amendment), February 2023 (the Second Amendment) and October 2023 (the Third Amendment).

We concluded that the First Amendment, the Second Amendment and the Third Amendment were each modifications to the 2022 Loan Agreement.

The 2022 Loan Agreement, as amended by the First Amendment and the Second Amendment, provided for a senior secured loan facility, with $ 27.5 million (Term A Loan) funded on the Closing Date and an additional $ 22.5 million which was funded upon our election in October 2023 (Term B Loan, and together with the Term A Loan, the 2022 Original Loans).

The 2022 Term A Loan funds were used to repay the 2018 Loan with the 2018 Lenders.

On October 17, 2023, we entered into a Third Amendment (the Third Amendment) to the 2022 Loan Agreement by and between us and the 2022 Lenders.

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) provided we have drawn the Term B Loan;

and (2) provides us with the option to draw up to an additional $ 50.0 million of uncommitted capital by December 31, 2026, subject to approval by the Agent’s investment committee (the Term D Loan and together with the Term A, B, and C Loans, the Four 2022 Loans).

and (2) provided us with the option to draw up to an additional $ 50.0 million of uncommitted capital by December 31, 2026, subject to approval by the Agent’s investment committee (the Term D 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.

We concluded that the Third Amendment was a modification to the 2022 Original Loan Agreement.

Under the Third Amendment, the maturity date for the Four 2022 Loans is March 1, 2027.

As discussed in Note 15.

Subsequent Events , on October 29, 2024, we entered into a Fourth Amendment (the Fourth Amendment) to the 2022 Loan Agreement by and between us and the 2022 Lenders.

The Fourth Amendment, among other things, (1) provided for the immediate draw of the Term D Loan in a principal amount of $ 50.0 million on the closing date of the Fourth Amendment and (2) provides us with the option to draw an additional $ 50.0 million of committed capital by June 30, 2025 (the Term E Loan and together with the Term A, B, C and D Loans, the Five 2022 Loans).

Under the Fourth Amendment, the maturity date for the Five 2022 Loans is extended from March 1, 2027 to July 1, 2028 (the Maturity Date).

The interest rate for each of the Term A Loan and the Term B Loan is 7.95 % plus a SOFR value equal to 0.022 % plus the 1-month CME Term SOFR reference rate as published by the CME Term SOFR Administrator on the CME Term SOFR Administrator’s Website, subject to a SOFR floor of one percent.

The interest rate for each of the Term C Loan and the Term D Loan is 4.25 % plus a SOFR value equal to 0.022 % plus the 1-month CME Term SOFR reference rate as published by the CME Term SOFR Administrator on the CME Term SOFR Administrator’s Website, subject to a SOFR floor of 4.7 %.

In addition, pursuant to the Third Amendment, the period under which we are permitted to make interest-only payments on the Four 2022 Loans was extended to December 31, 2026, effective upon our decision to draw the Term B Loan in the amount of $ 22.5 million.

We were obligated to pay $ 0.2 million, upon the closing of the Term A Loan, $ 0.1 million on the funding date of the Term B Loan, and $ 0.3 million on the funding date of the Term C Loan.

In addition, we will be obligated to pay 0.5 % of the aggregate original principal amount of the Term D Loan commitment, if requested by us and approved by the Agent’s investment committee, which shall be due on the earliest of (1) the funding of the Term D Loan, (2) if we request and the 2022 Lenders provide the Term D Loan commitment, the day immediately preceding the amortization date, and (3) if we request and the 2022 Lenders provide the Term D Loan commitment, the prepayment, refinancing, substitution or replacement of the Term C Loan on or prior to the date immediately preceding the amortization date.

We are obligated to pay a final fee equal to 4.95 % of the aggregate original principal amount of the Four 2022 Loans, to the extent such loans are funded, upon the earliest to occur of the maturity date, the acceleration of the Four 2022 Loans, and the prepayment, refinancing, substitution, or replacement of the Four 2022 Loans.

We may voluntarily prepay all amounts outstanding under the Four 2022 Loans, subject to a prepayment premium of (i) 3 % of the outstanding principal amount of the Four 2022 Loans if prepaid prior to or on October 17, 2024, (ii) 2 % of the outstanding principal amount of the Four 2022 Loans if prepaid after October 17, 2024 through and including October 17, 2025, or (iii) 1 % of the outstanding principal amount of the Four 2022 Loans if prepaid after October 17, 2025 and prior to the maturity date.

The Four 2022 Loans are secured by substantially all of our assets, except for our intellectual property and certain other customary exclusions.

The interest rate for the Term C Loan is 4.25 % plus a SOFR value equal to 0.022 % plus the 1-month CME Term SOFR reference rate as published by the CME Term SOFR Administrator on the CME Term SOFR Administrator’s Website, subject to a SOFR floor of 4.7 %.

The interest rate for each of the Term D Loan and the Term E Loan is 4.00 % plus a SOFR value equal to 0.022 % plus the 1-month CME Term SOFR reference rate as published by the CME Term SOFR Administrator on the CME Term SOFR Administrator's Website, subject to a SOFR floor of 4.7 %.

In addition, pursuant to the Fourth Amendment, the period under which we are permitted to make interest-only payments on the Five 2022 Loans was extended to the Maturity Date.

We paid fees of $ 0.2 million, upon the closing of the Term A Loan, $ 0.1 million on the funding date of the Term B Loan, $ 0.3 million on the funding date of the Term C Loan and $ 0.3 million on the funding date of the Term D Loan in October 2024.

In addition, we will be obligated to pay 0.5 % of the aggregate original principal amount of the Term E Loan commitment, which shall be due on the earliest of (1) the funding of the Term E Loan, (2) June 30, 2025, and (3) the prepayment, refinancing, substitution or replacement of any of the Five 2022 Loans on or prior to the date immediately preceding June 30, 2025.

We are obligated to pay a final fee equal to 4.95 % of the aggregate original principal amount of the Five 2022 Loans, to the extent such loans are funded, upon the earliest to occur of the maturity date, the acceleration of the Five 2022 Loans, and the prepayment, refinancing, substitution, or replacement of the Five 2022 Loans.

We may voluntarily prepay all amounts outstanding under the Five 2022 Loans, subject to a prepayment premium of (i) 3 % of the outstanding principal amount of the Five 2022 Loans if prepaid prior to or on October 17, 2024, (ii) 2 % of the outstanding principal amount of the Five 2022 Loans if prepaid after October 17, 2024 through and including October 17, 2025, or (iii) 1 % of the outstanding principal amount of the Five 2022 Loans if prepaid after October 17, 2025 and prior to the maturity date.

The Five 2022 Loans are secured by substantially all of our assets, except for our intellectual property and certain other customary exclusions.

Additionally, as discussed in Note 9.

Derivative Liabilities , in connection with the 2022 Original Loans, we entered into an agreement whereby we agreed to pay an exit fee in the amount of 2 % of the 2022 Original Loans funded (2022 Exit Fee).

Notwithstanding the prepayment or termination of the 2022 Loan, the 2022 Exit Fee will expire 10 years from the Closing Date.

We paid the 2022 Exit Fee to the Lender in October 2024.

The 2022 Loan Agreement, as amended, contains customary representations and warranties and customary affirmative and negative covenants, including, among others, 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 or to redeem capital stock.

We have agreed to not allow our cash, cash equivalents and available-for-sale investments to be less than the eighty percent ( 80 %) of the outstanding Four 2022 Term Loan balance for any period in which our net revenue from the sale of any products, calculated on a trailing six ( 6 ) month basis and tested monthly, is less than sixty percent ( 60 %) of the outstanding Four 2022 Loan balance.

In addition, the 2022 Loan Agreement, as amended, contains customary events of default that entitle the Agent to cause our indebtedness under the 2022 Loan Agreement to become immediately due and payable, and to exercise remedies against us and the collateral securing the Four 2022 Term Loans, including our cash.

We have agreed to not allow our cash, cash equivalents and available-for-sale investments to be less than the eighty percent ( 80 %) of the outstanding balance of the Five 2022 Term Loans for any period in which our net revenue from the sale of any products, calculated on a trailing six ( 6 ) month basis and tested monthly, is less than sixty percent ( 60 %) of the outstanding balance of the Five 2022 Loans.

Under the 2022 Loan Agreement, an event of default will occur if, among other things, we fail to make payments under the 2022 Loan Agreement, we breach any of our covenants under the 2022 Loan Agreement, subject to specified cure periods with respect to certain breaches, certain Lenders determine 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 holder of indebtedness to accelerate the maturity of such indebtedness or that could have a material adverse change on us.

Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to 4 % per annum will apply to all obligations owed under the 2022 Loan Agreement.

We have classified the 2022 Original Loan balance as a non-current liability as of June 30, 2024 due to principal repayments beginning in January 2027.

We have classified the 2022 Original Loan balance as a non-current liability as of September 30, 2024 due to principal repayment on July 1, 2028.

We have concluded that the provisions that could cause acceleration of the principal repayments are remote.

As of June 30, 2024, our future payment obligations related to the 2022 Loan, excluding interest payments and the 2022 final fee, were as follows (in thousands):

As of September 30, 2024, our future payment obligations related to the 2022 Loan, excluding interest payments and the 2022 final fee, were as follows (in thousands):

Total repayment obligations $ 104,950

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In October 2023, we received 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.

FDA for 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 our obligation to pay the 2018 Exit Fee to the 2018 Lenders, which we paid in October 2023.

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We concluded that the 2022 Exit Fee is a freestanding derivative which should be accounted for at fair value on a recurring basis.

The estimated fair value of the 2022 Exit Fee is recorded as a derivative liability and included in accrued expenses and other current liabilities on the accompanying condensed balance sheets.

During the three months ended June 30, 2024, we achieved the Revenue Milestone and therefore expect to pay the $ 1.0 million 2022 Exit Fee to the Agent.

As of June 30, 2024 and December 31, 2023, the estimated fair value of the 2022 Exit Fee was $ 1.0 million and $ 0.7 million, respectively.

The estimated fair value of the 2022 Exit Fee was recorded as a derivative liability and included in accounts payable and accrued expenses and other current liabilities on the accompanying condensed balance sheets as of September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024 and December 31, 2023, the estimated fair value of the 2022 Exit Fee was $ 1.0 million and $ 0.7 million, respectively.

During the three months ended June 30, 2024, we achieved the Revenue Milestone and we paid the $ 1.0 million 2022 Exit Fee to the Agent in October 2024.

The fair value of the derivative liability was determined using a discounted cash flow analysis and was classified as a Level 3 measurement within the fair value hierarchy since our valuation utilized significant unobservable inputs prior to June 30, 2024.

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FDA for our NDA for the control of serum phosphorus in adult patients with CKD on dialysis by November 30, 2023, and (b) achievement of certain product revenue milestone targets.

As of June 30, 2024, uncertainty around all of the noted valuation estimates had been removed, as the Term B Loan had been funded, the U.S.

As of September 30, 2024, uncertainty around all of the noted valuation estimates had been removed, as the Term B Loan had been funded, the U.S.

FDA had approved our NDA for the control of serum phosphorus in adult patients with CKD on dialysis prior to November 30, 2023, and we had achieved the Revenue Milestone.

Changes in the fair value of recurring measurements are presented as other income, net in our condensed statements of operations and comprehensive loss and were as follows for the six months ended June 30, 2024 and 2023 (in thousands):

Changes in the fair value of recurring measurements are presented as other income, net in our condensed statements of operations and comprehensive income (loss) and were as follows for the nine months ended September 30, 2024 and 2023 (in thousands):

Fair value of exit fee derivative liabilities at January 1, $ 675 $ 1,656

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2022 Exit Fee 325 126

Fair value of exit fee derivative liabilities at June 30, $ 1,000 $ 1,737

Fair value of exit fee derivative liabilities at September 30, $ 1,000 $ 2,055

All of our leases are operating leases and each contain customary rent escalation clauses.

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The following table provides additional details of our facility leases presented in our condensed balance sheets (dollars in thousands):

Facilities June 30, 2024 December 31, 2023

Facilities September 30, 2024 December 31, 2023

Right-of-use assets $ 3,625 $ 5,589

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Weighted-average discount rate 6.6 % 6.8 %

The lease costs, which are included in operating expenses in our condensed statements of operations and comprehensive loss, were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The lease costs, which are included in operating expenses in our condensed statements of operations and comprehensive income (loss), were as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Cash paid for operating lease $ 1,229 $ 1,119 $ 3,594 $ 3,316

The following table summarizes our undiscounted cash payment obligations for our operating lease liabilities as of June 30, 2024 (in thousands):

The following table summarizes our undiscounted cash payment obligations for our operating lease liabilities as of September 30, 2024 (in thousands):

Remainder of 2024 $ 1,255

Thereafter 21

Total undiscounted operating lease payments 4,000

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At-the-Market Offering Agreements

In July 2020, we filed a Form S-3 registration statement, which became effective in August 2020 (2020 Registration Statement).

In July 2020, we filed a registration statement on Form S-3, which became effective in August 2020 (2020 Registration Statement).

In August 2021, we filed a prospectus supplement under the 2020 Registration Statement 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 may be issued and sold, from time to time, under a sales agreement (2021 Open Market Sales Agreement) we entered into with Jefferies LLC (Jefferies), pursuant to which we may, from time to time, sell up to $ 150.0 million in shares of our common stock through Jefferies.

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As of March 2023, we had received the maximum gross proceeds of $ 150.0 million under the 2021 Open Market Sales Agreement at a weighted average share price of approximately $ 1.57 per share, which included 15.5 million shares of our common stock for which we received gross proceeds of $ 51.9 million at a weighted average share price of approximately $ 3.35 during the quarter ended March 31, 2023.

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;

In January 2023, we filed a registration statement on Form S-3, 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;

and (ii) a prospectus supplement 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 may be issued and sold, from time to time, under a sales agreement with Jefferies, deemed to be “at-the-market offerings” (2023 Open Market Sales Agreement).

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 six months ended June 30, 2024 we completed no sales pursuant to the 2023 Open Market Sales Agreement.

As of June 30, 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.

During the nine months ended September 30, 2024, we completed no sales pursuant to the 2023 Open Market Sales Agreement.

As of September 30, 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.

EQUITY INCENTIVE PLANS

Stock-based compensation expense recognized for stock options, restricted stock units (RSUs), and our employee stock purchase program (ESPP) are recorded as operating expenses in our condensed statements of operations and comprehensive loss, as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Total $ 9,133 $ 3,489 $ 27,518 $ 9,600

As of June 30, 2024, our total unrecognized stock-based compensation expense, net of estimated forfeitures, and average remaining vesting period, included the following (dollars in thousands):

As of September 30, 2024, our total unrecognized stock-based compensation expense, net of estimated forfeitures, and average remaining vesting period, included the following (dollars in thousands):

Unrecognized Compensation Expense Average Remaining Vesting Period (Years)

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Stock Options

A summary of our stock option activity and related information for the six months ended June 30, 2024 is as follows (in thousands, except dollar amounts):

A summary of our stock option activity and related information for the nine months ended September 30, 2024 is as follows (in thousands, except dollar amounts):

Number of Shares Weighted-Average

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Options forfeited or canceled ( 510 ) $ 5.46

Balance at June 30, 2024 27,767 $ 5.42

Exercisable at June 30, 2024 13,276 $ 5.43

Balance at September 30, 2024 28,168 $ 5.57

Exercisable at September 30, 2024 14,030 $ 5.49

Restricted Stock Units

A summary of our RSUs activity and related information for the six months ended June 30, 2024 is as follows (in thousands, except dollar amounts):

A summary of our RSUs activity and related information for the nine months ended September 30, 2024 is as follows (in thousands, except dollar amounts):

RSUs Weighted-Average

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Forfeited ( 285 ) $ 5.35

Non-vested restricted stock units at June 30, 2024 7,966 $ 6.58

Non-vested restricted stock units at September 30, 2024 8,283 $ 6.55

Employee Stock Purchase Plan

During the six months ended June 30, 2024, we sold approximately 0.3 million shares of our common stock under the ESPP.

During the nine months ended September 30, 2024, we sold approximately 0.5 million shares of our common stock under the ESPP.

The shares were purchased by employees at an average purchase price of $ 4.64 per share resulting in proceeds to us of approximately $ 2.2 million.

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Under Our Amended and Restated Non-Employee Director Compensation Program, members of our board of directors may elect to receive shares of our stock in lieu of their cash fees.

During the six months ended June 30, 2024, we issued 41 thousand shares of our common stock to members of the board of directors in accordance with the program.

NET LOSS PER SHARE

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period and excludes any dilutive effects of stock-based awards and warrants.

Diluted net loss per common share is computed giving effect to all potential dilutive common shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units.

As we had net losses for the six months ended June 30, 2024 and 2023, all potential common shares were determined to be anti-dilutive.

The following table sets forth the computation of net loss per common share (in thousands, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

During the nine months ended September 30, 2024, we issued 41 thousand shares of our common stock to members of the board of directors in accordance with the program.

NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period and excludes any dilutive effects of stock-based awards and warrants.

Diluted net income (loss) per common share is computed giving effect to all potential dilutive common shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units.

As we had net losses for the nine months ended September 30, 2024 and 2023, all potential common shares were determined to be anti-dilutive during those periods.

The following table sets forth the computation of net income (loss) per common share (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net loss $ ( 16,454 ) $ ( 17,121 ) $ ( 42,972 ) $ ( 43,894 )

Shares used in computing net loss per share - basic and diluted 234,571 214,951 233,819 211,009

Net loss per share of common stock - basic and diluted $ ( 0.07 ) $ ( 0.08 ) $ ( 0.18 ) $ ( 0.21 )

Net income (loss) $ ( 809 ) $ 6,629 $ ( 43,781 ) $ ( 37,265 )

Weighted average common shares outstanding - basic 235,911 222,782 234,516 214,977

Weighted average common shares outstanding - diluted 235,911 227,894 234,516 214,977

Net income (loss) per share of common stock - basic and diluted $ ( 0.00 ) $ 0.03 $ ( 0.19 ) $ ( 0.17 )

For the periods presented, the total numbers of securities that could potentially dilute net income per share in the future that were not considered in the diluted net loss per share calculations because the effect would have been anti-dilutive were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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5:21-cv-06228-HSG (together, the "Securities Class Actions").

The complaints allege that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact related to tenapanor.

The complaints allege that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact related to tenapanor.

The plaintiffs seek damages and interest, and an award of costs, including attorneys’ fees.

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Defendants filed a motion to dismiss the third amended complaint on June 3, 2024.

A hearing on the motion to dismiss is currently set for October 3, 2024.

We believe the plaintiff’s claims are without merit and we have not recorded any accrual for a contingent liability associated with these legal proceedings.

The case was dismissed with prejudice on September 12, 2024.

On October 9, 2024, plaintiff appealed the District Court's dismissal of the case to the Ninth Circuit.

We believe the plaintiffs' claims are without merit and we have not recorded any accrual for a contingent liability associated with these legal proceedings.

On December 7, 2021 and March 29, 2022, two verified shareholders derivative lawsuits were filed in the U.S.

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On October 25, 2022, the parties filed a stipulation to consolidate and stay the Go and Morris actions, and on October 27, 2022, the court consolidated the Go and Morris action and stayed the consolidated action pending resolution of the anticipated motion(s) to dismiss in the Securities Class Action.

We believe the plaintiff’s claims are without merit and we have not recorded any accrual for a contingent liability associated with these legal proceedings.

On July 17, 2024, the Company, in partnership with the American Association of Kidney Patients (AAKP) and the National Minority Quality Forum (NMQF), filed a lawsuit in the United States District Court for the District of Columbia against the Centers for Medicare & Medicaid Services (CMS), claiming that CMS has violated its statutory and regulatory authority under the Medicare Improvements for Patients and Providers Act (MIPPA), which established the ESRD PPS bundled payment system for dialysis services in 2008.

The consolidated case remains stayed pending resolution of the appeal in the Securities Class Action.

We believe the plaintiffs' claims are without merit and we have not recorded any accrual for a contingent liability associated with these legal proceedings.

On July 17, 2024, the Company, in partnership with the American Association of Kidney Patients (AAKP) and the National Minority Quality Forum (NMQF), filed a lawsuit in the U.S.

District Court for the District of Columbia against the Centers for Medicare & Medicaid Services (CMS), claiming that CMS has violated its statutory and regulatory authority under the Medicare Improvements for Patients and Providers Act (MIPPA), which established the ESRD PPS bundled payment system for dialysis services in 2008.

Specifically, the lawsuit claims that CMS’s plan to move XPHOZAH, along with all oral-only drugs, into the ESRD PPS is inconsistent with MIPPA’s statutory provision, and contradicts CMS’s own regulations.

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The Company, AAKP and NMQF are seeking relief under the Administrative Procedure Act to enjoin CMS from proceeding with its plan to include XPHOZAH in the ESRD PPS and eliminate coverage under Medicare Part D beginning on January 1, 2025.

On September 17, 2024, defendants filed a Motion to Dismiss, the case, and on September 19, 2024, plaintiffs filed a Motion for Preliminary Injunction or, in the Alternative, for Expedited Summary Judgment.

On August 16, 2024, a complaint was filed against the Company in the U.S.

District Court of Massachusetts, captioned Yarborough v.

Ardelyx, Inc .

, et al., No.

24-cv-12119 (D.

The complaint names the Company, Mike Raab, and Justin Renz as defendants and alleges violations of Sections 10(b) and 20(a) the Exchange Act and Rule 10b-5 promulgated thereunder, related to the Company’s announcement on July 2, 2024 that it had chosen not to file an application for Transitional Drug Add-on Payment Adjustment (TDAPA) for XPHOZAH (the "Yarborough Action").

The plaintiffs seek damages and interest, and an award of costs, including attorneys' fees.

Two shareholders filed motions to be appointed lead plaintiff in the Yarborough Action on October 15, 2024.

The court has not yet appointed a lead plaintiff.

We believe the plaintiff's claims are without merit and we have not recorded any accrual for a contingent liability associated with these legal proceedings.

On September 6 and 13, 2024, certain Ardelyx shareholders filed two verified derivative complaints purportedly on behalf of the Company in the United States District Court for the District of Massachusetts alleging violations of Sections 10(b) and/or 14(a) of the Exchange Act, breaches of fiduciary duty, unjust enrichment, waste, and aiding and abetting breaches of fiduciary duty against certain members of our board of directors and management based on substantially the same factual allegations in the Yarborough Action.

The complaints seek unspecified damages and corporate governance reforms, as well as costs and attorneys' fees.

On September 25, 2024, the Court consolidated the two derivative actions into the case In re Ardelyx, Inc.

Stockholder Derivative Litigation , Case No.

1:24-cv-12302-LTS (D.

We believe the plaintiffs' claims are without merit and we have not recorded any accrual for a contingent liability associated with these legal proceedings.

From time to time, we may be involved in legal proceedings arising in the ordinary course of business.

As of June 30, 2024, there is no litigation pending that would reasonably be expected to have a material adverse effect on our results of operations and financial condition, and no contingent liabilities were accrued as of June 30, 2024.

As of September 30, 2024, there is no litigation pending that would reasonably be expected to have a material adverse effect on our results of operations and financial condition, and no contingent liabilities were accrued as of September 30, 2024.

SUBSEQUENT EVENTS

On October 3, 2024, we and BMR-Pacific Research Center LP (Landlord) entered into a Lease Agreement (New Fremont Lease) whereby we agreed to lease approximately 15,000 square feet on the first floor of the building located at 7999 Gateway Boulevard, Newark, California (New Fremont Premises).

The initial term of the New Fremont Lease will be thirty-nine ( 39 ) months and we will have one ( 1 ) option to extend the term by sixty ( 60 ) months.

The Landlord has agreed to conduct certain tenant improvements at Landlord’s expense.

The initial term of the New Fremont Lease commences once the tenant improvements are completed, which is estimated to be February 10, 2025.

The initial monthly base rent will equal three and 15/100 dollars ($ 3.15 ) per square foot of rentable area of the New Fremont Premises and will be subject to an annual upward adjustment of three and a half percent ( 3.5 %) of the then-current base rent.

In connection with entering into the New Fremont Lease, we and the Landlord entered into a sixth amendment (the Sixth Amendment) to our existing lease (the Existing Fremont Lease) whereby we lease certain premises at 34175 Ardenwood Boulevard in Fremont, California, which amends the expiration date of the Existing Fremont Lease to be the date that is the later of (a) March 10, 2025, and (b) the date that is the actual “Term Commencement Date” under the New Fremont Lease.

On October 25, 2024, we entered into a Commercial Supply Agreement (the CSA) with Hovione Farmaciência, S.A.

(Hovione Portugal) and Hovione, LLC (Hovione NJ and, together with Hovione Portugal, Hovione).

The CSA contemplates that Hovione will perform spray-drying services for the Company at commercial scale, in the manner developed and validated under the existing Master Services Agreement between the parties.

The CSA provides that Hovione will manufacture, and the Company will purchase, certain minimum quantities of tenapanor API beginning in 2024 from its Portugal facility and continuing through the end of the term of the CSA.

The parties have agreed that Hovione will purchase, install, validate and qualify equipment at its New Jersey site so that, beginning in 2027, additional product can be supplied by Hovione NJ.

The initial term of the CSA is until December 31, 2030, unless terminated earlier by one of the parties by its terms.

Thereafter, the CSA will automatically renew for successive terms of two years until terminated by one of the parties.

On October 29, 2024, we entered into a Fourth Amendment to Loan and Security Agreement (the Fourth Amendment), by and among Ardelyx, as borrower, SLR, as collateral agent and the lenders party thereto, which amends the SLR Loan Agreement.

The Fourth Amendment, among other things, (1) provided for the immediate draw of the Term D loan in a principal amount of $ 50.0 million on the closing date of the Fourth Amendment and (2) provides us with the option to draw an additional $ 50.0 million of committed senior secured term loans by June 30, 2025 (the Term E Loan);

(3) extends the Maturity Date for all term loans under the SLR Loan Agreement from March 1, 2027 to July 1, 2028;

and (4) extends the interest-only period for all term loans under the SLR Agreement until the Maturity Date.

The interest rate for the Term D Loan and the Term E Loan is 4.00 % plus a rate equal to 0.022 % plus the 1-month SOFR reference rate, subject to a SOFR floor of 4.70 %.

We paid a fee of $ 0.3 million in connection with the funding of the Term D Loan.

We are also obligated to pay an additional $ 0.3 million on the earliest of (1) the funding date of the Term E Loan, (2) June 30, 2025, and (3) the prepayment, refinancing, substitution, or replacement of any term loan under the SLR Loan Agreement on or prior to the date immediately preceding June 30, 2025.

Borrowing for additional information related to borrowing).

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 1. Financial Statements