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Item 1. Financial Statements

2025-05-01 compared with 2024-10-31 · 277 added, 461 removed, 261 unchanged (74% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2024 December 31,

March 31, 2025 December 31, 2024

Current assets

6 unchanged sentences

Total current assets 312,692 356,452

Property and equipment, net 1,665 1,495

Inventory, non-current 82,099 70,011

1 unchanged sentence

Right-of-use assets 3,670 2,380

Property and equipment, net 1,028 1,009

Other assets 6,822 5,416

17 unchanged sentences

500,000,000 shares authorized;

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

239,201,256 and 238,015,825 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,072,118 1,058,548

4 unchanged sentences

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

Table of Content s

ARDELYX, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

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

2024 2023 2024 2023

Three Months Ended March 31,

Product sales, net $ 67,814 $ 43,512

11 unchanged sentences

Total operating expenses 98,160 63,573

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

Loss from operations ( 36,349 ) ( 24,678 )

Interest expense ( 4,191 ) ( 2,356 )

1 unchanged sentence

Other income, net 2,326 2,339

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

Loss before provision for income taxes ( 40,285 ) ( 26,397 )

Provision for income taxes 859 121

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 )

Net loss $ ( 41,144 ) $ ( 26,518 )

Net loss per share of common stock - basic and diluted $ ( 0.17 ) $ ( 0.11 )

Shares used in computing net loss per share - basic and diluted 238,624,145 233,065,960

Comprehensive loss

Net loss $ ( 41,144 ) $ ( 26,518 )

Unrealized losses on available-for-sale securities ( 39 ) ( 244 )

Comprehensive loss $ ( 41,183 ) $ ( 26,762 )

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

Table of Content s

ARDELYX, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

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

(in thousands, except shares)

Three Months Ended September 30, 2024

Common Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders'

Shares Amount

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

Issuance of common stock upon vesting of restricted stock units 599,378 — — — — —

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

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

Net loss — — — ( 809 ) — ( 809 )

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

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders'

Three Months Ended March 31, 2025

Common Stock Additional Paid-In Capital

Accumulated Deficit

Accumulated Other Comprehensive Income

Total Stockholders’ Equity

Shares Amount

1 unchanged sentence

Issuance of common stock under employee stock purchase plan 222,734 — 1,015 — — 1,015

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

Issuance of common stock upon exercise of options 389,963 — 467 — — 467

3 unchanged sentences

Net loss — — — ( 41,144 ) — ( 41,144 )

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

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders'

Shares Amount

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

Issuance of common stock upon vesting of restricted stock units 211,277 — — — — —

Issuance of common stock in at-the-market offerings 13,760,968 1 57,162 — — 57,163

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

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

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders'

Balance as of March 31, 2025 239,201,256 $ 24 $ 1,072,118 $ ( 926,484 ) $ 18 $ 145,676

Three Months Ended March 31, 2024

Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Shares Amount

1 unchanged sentence

Issuance of common stock under employee stock purchase plan 253,312 — 1,038 — — 1,038

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

Issuance of common stock upon exercise of options 701,578 — 2,183 — — 2,183

Issuance of common stock upon vesting of restricted stock units 551,664 — — — — —

Issuance of common stock in at-the-market offerings 32,274,741 3 119,245 — — 119,248

Stock-based compensation — — 7,616 — — 7,616

1 unchanged sentence

Net loss — — — ( 26,518 ) — ( 26,518 )

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

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

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

Table of Content s

ARDELYX, INC.

1 unchanged sentence

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities

25 unchanged sentences

Proceeds from 2022 Loan Agreement, net of issuance costs — 49,750

Proceeds from issuance of common stock in at the market offering, net of issuance costs — 119,248

Proceeds from issuance of common stock under equity incentive and stock purchase plans 1,482 3,221

Net cash provided by financing activities 1,482 52,971

Net increase (decrease) in cash and cash equivalents 25,959 ( 62,373 )

Net (decrease) increase in cash and cash equivalents ( 34,124 ) 14,677

Cash and cash equivalents at beginning of period 64,932 21,470

5 unchanged sentences

Right-of-use assets obtained in exchange for lease obligations $ 2,213 $ —

Issuance of common stock for services $ 257 $ 337

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

Table of Content s

ARDELYX, INC .

NOTES TO CONDENSED FINANCIAL STATEMENTS

ORGANIZATION AND BASIS OF PRESENTATION

Ardelyx, Inc.

(Company, we, us or our) is a biopharmaceutical company founded with a mission to discover, develop and commercialize innovative first-in-class medicines that meet significant unmet medical needs.

NATURE OF OPERATIONS

We are a biopharmaceutical company founded with a mission to discover, develop and commercialize innovative, first-in-class medicines that meet significant unmet medical needs.

We developed a unique and innovative platform that enabled the discovery of new biological mechanisms and pathways to develop potent and efficacious therapies that minimize the side effects and drug-drug interactions frequently encountered with traditional, systemically absorbed medicines.

1 unchanged sentence

Tenapanor, branded as IBSRELA ® , is approved in the U.S.

for the treatment of adults with irritable bowel syndrome with constipation (IBS-C).

for the treatment of adults with IBS-C.

Tenapanor, branded as XPHOZAH ® , is approved 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.

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.

We operate in one business segment, which is the development and commercialization of biopharmaceutical products.

Refer to Note 12.

Segment Reporting for further discussion on our segment reporting.

Basis of Presentation

These condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

GAAP) and pursuant to the requirements of the Securities and Exchange Commission (SEC) for interim reporting.

These condensed financial statements have been prepared in accordance with U.S.

GAAP and pursuant to the requirements of the SEC for interim reporting.

As permitted under those rules and regulations, certain footnotes or other financial information that are normally required by U.S.

GAAP have been condensed or omitted.

These condensed financial statements have been prepared on the same basis as our most recent annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to present fairly our financial position, results of operations, changes in stockholders’ equity, and cash flows for the interim periods presented.

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 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.

These condensed financial statements have been prepared on the same basis as our most recent annual financial statements and, in the opinion of management, reflect all normal and recurring adjustments necessary to present fairly our financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods presented.

Certain prior year amounts have been reclassified to conform to the current year presentation.

The results for the 2025 first quarter are not necessarily indicative of results to be expected for the entire year ending December 31, 2025, or for any other interim period or future year.

Refer to the Summary of Abbreviated Terms at the end of this Quarterly Report on Form 10-Q for definitions of terms used throughout the document.

Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes thereto.

On an ongoing basis, management evaluates its estimates, including those related to recognition of revenue, clinical trial accruals, contract manufacturing accruals, expected demand for inventory, fair value of assets and liabilities, income taxes and stock-based compensation.

The preparation of financial statements requires management to make estimates, judgments and assumptions.

The most significant assumptions are estimates used in our revenue gross-to-net accruals and other assumptions.

Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances.

Actual results could materially differ from those estimates.

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 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

Our significant accounting policies are described in Note 2 to our audited financial statements for the fiscal year ended December 31, 2023, included in our Annual Report on Form 10-K.

There have been no material changes in our significant accounting policies as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Recent Accounting Pronouncements

New Accounting Pronouncements - Recently Adopted

We have adopted no new accounting pronouncements subsequent to filing our most recent Annual Report on Form 10-K.

Recent Accounting Pronouncements Not Yet Adopted

In October 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

The amendments in this Update modify the disclosure or presentation requirements of a variety of Topics in the Codification.

The amendments are in response to the U.S.

Securities and Exchange Commission's (SEC) Release No.

33-10532, Disclosure Update and Simplification, in which the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles to the FASB for potential incorporation into the Codification.

For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

For all other entities, the amendments will be effective two years later.

For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

Management is currently assessing the impact of this standard on the Company’s financial statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.

This Update requires publicly traded entities to provide enhanced disclosures about significant segment expenses regularly reviewed by the chief operating decision maker, including public traded entities with a single reportable segment.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

Management is currently assessing the impact of this standard on the Company’s financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, an amendment which modifies the measurement and recognition of credit losses for most financial assets and certain other instruments.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures .

The amendments in this Update provide more transparency about income tax information through improvements to income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

1 unchanged sentence

Early adoption is permitted on a prospective basis for annual financial statements that have not yet been issued or made available for issuance.

Management is currently assessing the impact of this standard on the Company’s financial statements.

CASH, CASH EQUIVALENTS AND INVESTMENTS

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

Amortized Cost Gains Losses Fair Value

The Company is in the process of evaluating the impact of this new guidance on its disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement (Topic 220) - Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses , which requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements.

2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and is effective on either a prospective basis or retrospective basis.

The Company is in the process of evaluating the impact of this new guidance on its disclosures.

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CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The following table summarizes our cash, cash equivalents and short-term investments:

March 31, 2025 December 31, 2024

Gross Unrealized Gross Unrealized

(in thousands) Amortized Cost Gains Losses Fair Value Amortized Cost Gains Losses Fair Value

Cash and cash equivalents

3 unchanged sentences

Short-term investments

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

treasury securities $ 72,431 $ 43 $ ( 3 ) $ 72,471 $ 79,720 $ 58 $ ( 5 ) $ 79,773

government-sponsored agency bonds 41,852 4 ( 26 ) 41,830 45,960 29 ( 27 ) 45,962

Commercial paper 33,026 2 ( 3 ) 33,025 37,061 19 ( 15 ) 37,065

4 unchanged sentences

Total cash, cash equivalents and investments $ 213,934 $ 56 $ ( 38 ) $ 213,952 $ 250,043 $ 112 $ ( 55 ) $ 250,100

December 31, 2023

Gross Unrealized

Amortized Cost Gains Losses Fair Value

Cash and cash equivalents:

Cash $ 2,829 $ — $ — $ 2,829

Money market funds 18,641 — — 18,641

Total cash and cash equivalents 21,470 — — 21,470

Short-term investments:

government-sponsored agency bonds $ 101,892 $ 235 $ ( 34 ) $ 102,093

Commercial paper 49,630 41 ( 17 ) 49,654

Asset-backed securities 8,628 2 ( 5 ) 8,625

treasury securities 2,455 2 — 2,457

Total short-term investments 162,605 280 ( 56 ) 162,829

Total cash, cash equivalents and investments $ 184,075 $ 280 $ ( 56 ) $ 184,299

Cash equivalents consist of money market funds with original maturities of three months or less at the time of purchase, and the carrying amount is a reasonable approximation of fair value.

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 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 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.

We consider a debt security to be impaired when its fair value is less than its carrying cost, in which case we would further review the investment to determine whether it is other-than-temporarily impaired.

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 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.

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

Unrealized losses as of March 31, 2025 and December 31, 2024 were not material.

We determined that none of our available-for-sale securities were other-than-temporarily impaired as of March 31, 2025 and December 31, 2024, and no investment was in a continuous unrealized loss position for more than one year.

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

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 not recorded an allowance for credit losses for these securities as of March 31, 2025 and December 31, 2024.

See “Cash and Cash Equivalents” and “Short-Term Investments” captions of Note 2.

Summary of Significant Accounting Policies of our 2024 Form 10-K for more information on our accounting policies for cash, cash equivalents and short-term investments.

FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:

Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by us at the reporting date.

Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

Level 1 – Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by us at the reporting date.

Level 2 – Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Valuations based on unobservable inputs for which there is little or no market data, which require us to develop our own assumptions.

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):

September 30, 2024

Fair Value Level 1 Level 2 Level 3

Level 3 – Valuations based on unobservable inputs for which there is little or no market data, which require us to develop our own assumptions.

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

March 31, 2025 December 31, 2024

(in thousands) Total Fair Value

Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3

Money market funds $ 22,490 $ 22,490 $ — $ — $ 48,650 $ 48,650 $ — $ —

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

treasury securities 72,471 — 72,471 — 79,773 — 79,773 —

36,743 — 36,743 —

government-sponsored agency bonds 41,830 — 41,830 — 45,962 — 45,962 —

Commercial paper 33,025 — 33,025 — 37,065 — 37,065 —

Corporate bonds 28,082 — 28,082 — 17,413 — 17,413 —

17,408 — 17,408 —

Asset-backed securities 5,749 — 5,749 — 2,985 — 2,985 —

1 unchanged sentence

Total $ 205,634 $ 22,490 $ 183,144 $ — $ 233,818 $ 48,650 $ 185,168 $ —

December 31, 2023

Fair Value Level 1 Level 2 Level 3

Money market funds $ 18,641 $ 18,641 $ — $ —

government-sponsored agency bonds 102,093 — 102,093 —

Commercial paper 49,654 — 49,654 —

Asset-backed securities 8,625 — 8,625 —

treasury securities 2,457 — 2,457 —

Total $ 181,470 $ 18,641 $ 162,829 $ —

Derivative liability for exit fees $ 675 $ — $ — $ 675

Total $ 675 $ — $ — $ 675

Where quoted prices are available in an active market, securities are classified as Level 1.

We classify money market funds as Level 1.

When quoted market prices are not available for the specific security, we estimate fair value by using benchmark yields, reported trades, broker/dealer quotes and issuer spreads.

We classify U.S.

government-sponsored agency bonds, U.S.

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.

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.

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 September 30, 2024 and December 31, 2023.

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 September 30, 2024 and December 31, 2023.

The principal outstanding under our term loans is subject to a variable interest rate and therefore, we believe the carrying amount of the term loan approximates fair value as of March 31, 2025 and December 31, 2024.

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 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.

The carrying value of the deferred royalty obligation related to the sale of future royalties approximates its fair value as of March 31, 2025 and December 31, 2024 and is based on our current estimates of future royalties and commercialization milestones expected to be paid to us by 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 September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

September 30, 2024 December 31, 2023

Inventory consisted of the following:

(in thousands) March 31, 2025 December 31, 2024

Raw materials $ 40,612 $ 30,792

5 unchanged sentences

Total $ 105,875 $ 91,184

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,

Prepaid commercial manufacturing with third-party CMOs not included in inventory was $ 17.1 million and $ 16.4 million as of March 31, 2025 and December 31, 2024, respectively.

There was $ 3.2 million of prepayments expected to be converted into inventory after 12 months as of March 31, 2025, as compared to zero as of December 31, 2024.

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Disaggregation of total revenues by nature is as follows:

Three Months Ended March 31,

(in thousands)

Product sales, net

$ 67,814 $ 43,512

Licensing revenue 5,020 17

Non-cash royalty revenue related to the sale of future royalties 1,026 368

Product supply revenue 254 2,126

Total revenues $ 74,114 $ 46,023

Product Sales, Net

Total product sales, net was as follows:

Three Months Ended March 31,

(in thousands)

Product sales, net

IBSRELA $ 44,403 $ 28,361

1 unchanged sentence

Total product sales, net $ 67,814 $ 43,512

Product supply revenue 5,322 2,092 7,461 5,354

Licensing revenue 20 32,014 56 32,790

Non-cash royalty revenue related to the sale of future royalties 809 — 1,776 —

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 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

Product sales, net approximated 91.5 % and 94.5 % of total revenues in the 2025 and 2024 first quarters, respectively.

Concentrations

Gross product sales from Customers accounting for more than 10% of total revenues were as follows:

Three Months Ended March 31,

Customers (1)

BioRidge Pharma, LLC 63.8 % 64.6 %

AmerisourceBergen Drug Corporation 14.0 % 21.2 % 15.1 % 21.3 %

Cardinal Health 22.2 % 19.2 %

Cencora (formerly AmerisourceBergen Drug Corporation)

18.2 % 21.6 %

McKesson Corporation 16.9 % 16.0 %

The activities and ending reserve balances for each significant category of discounts and allowances, which constitute variable consideration, were as follows (in thousands):

Discounts and Chargebacks Rebates, Wholesaler and GPO Fees Copay and Returns Total

(1) The total of the above percentages exceeds 100% as the numerators used in the calculations represent gross product sales for each Customer, as opposed to product sales, net as presented in our condensed statements of operations and comprehensive loss.

GTN Adjustments

The activities and ending reserve balances for each significant category of GTN adjustments on product sales, net, which constitute variable consideration, were as follows:

(in thousands)

Discounts and Chargebacks

Rebates, Wholesaler and GPO Fees

Copay Assistance and Returns

Balance as of December 31, 2024 $ 1,643 $ 14,475 $ 11,170 $ 27,288

Provisions (1)

4,143 18,835 5,940 28,918

Credits/payments ( 4,681 ) ( 18,405 ) ( 8,334 ) ( 31,420 )

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.

Balance as of March 31, 2025 $ 1,105 $ 14,905 $ 8,776 $ 24,786

(1) Provisions included approximately $ 3.8 million of favorable adjustment resulting from changes in prior periods’ estimated product returns for XPHOZAH.

Table of Content s

COLLABORATION AND LICENSING AGREEMENTS

Kyowa Kirin Co., Ltd.

(Kyowa Kirin)

In November 2017, we entered into an exclusive license agreement with Kyowa Kirin (2017 Kyowa Kirin Agreement), under which we granted Kyowa Kirin an exclusive license to develop and commercialize certain NHE3 inhibitors including tenapanor in Japan for the treatment of cardiorenal diseases and conditions, excluding cancer.

We retained the rights to tenapanor outside of Japan, and also retained the rights to tenapanor in Japan for indications other than those stated above.

Pursuant to the 2017 Kyowa Kirin Agreement, Kyowa Kirin is responsible for all costs and expenses incurred in the development and commercialization of tenapanor for all licensed indications in Japan.

We are responsible for supplying the tenapanor drug substance for Kyowa Kirin’s use in development and commercialization throughout the term of the 2017 Kyowa Kirin Agreement, provided that Kyowa Kirin may exercise an option to manufacture the tenapanor drug substance under certain conditions.

In October 2022, we entered into a Commercial Supply Agreement with Kyowa Kirin to further define the obligations of the parties with respect to the commercial supply of tenapanor drug substance (2022 Kyowa Kirin Supply Agreement).

As detailed below under the heading Deferred Revenue we have received advanced payments from Kyowa Kirin for the manufacturing of tenapanor drug substance that will be used to satisfy Kyowa Kirin needs.

We assessed these arrangements in accordance with Accounting Standards Update (ASU) No.

2014-09, Revenue from Contracts with Customers (Topic 606) and related amendments (ASC 606) and concluded that the contract counterparty, Kyowa Kirin, is a customer.

Under the terms of the 2017 Kyowa Kirin Agreement, we received $ 30.0 million in upfront license fees, which was recognized as revenue when the agreement was executed.

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 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.

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

(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 September 30, 2024.

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

Under the terms of the 2022 Amendment, we and Kyowa Kirin agreed to a reduction in the royalty rate payable to us by Kyowa Kirin upon net sales of tenapanor for hyperphosphatemia in Japan.

The royalty rate will be reduced from the high teens to low double digits for a two-year period of time following the first commercial sale in Japan, and then to mid-single digits for the remainder of the royalty term.

As discussed in Note 7.

Deferred Royalty Obligation Related to the Sale of Future Royalties , the future commercial milestones and royalties we may receive under the 2017 Kyowa Kirin Agreement will be remitted to HCR pursuant to the HCR 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 due following Kyowa Kirin's filing with the Japanese Ministry of Health, Labour and Welfare (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, both of which occurred as of September 30, 2023.

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 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 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 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.

(Fosun Pharma)

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

We assessed these arrangements in accordance with ASC 606 and concluded that the contract counterparty, Fosun Pharma, is a customer.

Under the terms of the Fosun Agreement, we received $ 12.0 million in upfront license fees which was recognized as revenue when the agreement was executed.

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 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 income (loss) when earned during the three months ended September 30, 2023.

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

FDA had 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 was 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).

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.

In March 2018, we entered into an exclusive license agreement with Knight Therapeutics, Inc., (Knight Agreement) for the development, commercialization and distribution of tenapanor in Canada for hyperphosphatemia and IBS-C.

We assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Knight, is a customer.

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 $ 16.4 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 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 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

The following tables present changes in our current and non-current deferred revenue balances during the reporting period, which are all attributable to the 2017 Kyowa Kirin Agreement (in thousands):

Current Non-Current Current Non-Current

Balance at January 1, $ 7,182 $ 8,644 $ 4,211 $ 9,025

Amounts invoiced as prepayments for product supply 2,654 8,212 1,182 4,530

Decrease for revenue recognized for product supply ( 6,650 ) — ( 4,586 ) —

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

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

We out-license to external partners for the development of tenapanor and commercialization of tenapanor outside of the U.S.

We recognize revenue from our agreements with Kyowa Kirin, Fosun Pharma and Knight as licensing revenue, product supply revenue or non-cash royalty revenue related to the sale of future royalties.

Collaboration and Licensing Agreements and “Licensing Revenue Recognition” caption of Note 2.

Summary of Significant Accounting Policies of our 2024 Form 10-K for more information on the nature, purpose, significant rights and obligations of the parties, as well as our accounting policies for such revenue streams.

The following table summarizes total revenues by collaboration partner:

Three Months Ended March 31,

(in thousands) 2025 2024

Licensing revenue

Total licensing revenue

Product supply revenue

Total supply revenue

$ 254 $ 2,126

Non-cash royalty revenue related to the sale of future royalties

$ 1,026 $ 368

The following table presents changes in our current and non-current deferred revenue balances, which are all attributable to Kyowa Kirin:

(in thousands) Current Non-Current Current Non-Current

Deferred revenue balance as of January 1,

$ 10,686 $ 7,232 $ 7,182 $ 8,644

Prepaid product supply 227 1,118 732 3,459

Product supply delivered — — ( 1,328 ) —

Deferred revenue balance as of March 31, $ 10,913 $ 8,350 $ 6,586 $ 12,103

Significant developments and updates related to our collaboration and licensing agreements in the 2025 and 2024 first quarters are discussed below.

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

In the 2024 first quarter, we began to recognize non-cash royalty revenue related to the sale of future royalties, which was remitted to HCR in accordance with the HCR Agreement.

In February 2025, we announced the approval of an NDA for tenapanor for the control of hyperphosphatemia in adult patients with CKD undergoing hemodialysis by China’s Center for Drug Evaluation of the NMPA.

This approval triggered a $ 5.0 million milestone to us under the terms of the Fosun Agreement, which was recorded as licensing revenue on our condensed statement of operations and comprehensive loss when earned during the 2025 first quarter and was received in April 2025.

In connection with the AstraZeneca Termination Agreement, we recognized royalty expense as other cost of revenue in our condensed statements of operations and comprehensive loss of $ 8.8 million and $ 4.7 million in the 2025 and 2024 first quarters, respectively.

As of March 31, 2025, we have recognized $ 71.2 million of the total $ 75.0 million outstanding royalty obligation.

Table of Content s

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).

Under the terms of the HCR Agreement, HCR has 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 consideration for the sale of the Royalty Interest Payments, HCR paid to us a $ 10.0 million upfront payment in June 2022 and a $ 5.0 million payment, which we received in October 2023, as a result of Kyowa Kirin's receipt of regulatory approval to market tenapanor for hyperphosphatemia in Japan.

We are eligible to receive another $ 5.0 million payment in the event net sales by Kyowa Kirin in Japan exceed a certain annual target level by the end of 2025.

The HCR Agreement is effective until terminated by the mutual agreement of the parties and contains customary representations and warranties and customary affirmative and negative covenants, including, among others, requirements as to prosecution, maintenance, defense and enforcement of certain patent rights in Japan, restrictions regarding our ability to forgive, release or reduce any Royalty Interest Payments due to us under the 2017 Kyowa Kirin Agreement, to create or incur any liens with respect to the Royalty Interest Payments, the 2017 Kyowa Kirin Agreement or certain patents, or to sell, license or transfer certain patents in the field and territory described in the 2017 Kyowa Kirin Agreement.

In addition, the HCR Agreement contains customary events of default with respect to which we may incur indemnification obligations to HCR for any losses incurred by HCR and related parties as a result of the event of default, subject to a specified limitation of liability cap.

Under the HCR Agreement, an event of default will occur if, among other things, any of the representations and warranties included in the HCR Agreement proves not to have been true and correct in all material respects, at the time it was made, we breach any of our covenants under the HCR Agreement, subject to specified cure periods with respect to certain breaches, we are in breach or default under the 2017 Kyowa Kirin Agreement in any manner which is likely to cause a material adverse effect on the Royalty Interest Payments, the occurrence of a termination of the 2017 Kyowa Kirin Agreement under certain circumstances or we or our assets become subject to certain legal proceedings, such as bankruptcy proceedings, or we are unable to pay our debts as they become due.

The $ 10.0 million upfront payment from HCR received in June 2022 and the $ 5.0 million payment received in October 2023 have been recorded as a deferred royalty obligation related to the sale of future royalties (deferred royalty obligation) on our balance sheets.

Due to our ongoing manufacturing obligations under the 2017 Kyowa Kirin Agreement, we account for the proceeds as imputed debt and therefore will recognize royalties earned under the arrangement as non-cash royalty revenue.

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 sale, we incurred approximately $ 0.4 million in transaction costs, which, along with the deferred royalty obligation, are being amortized to non-cash interest expense over the estimated life of the HCR Agreement using the effective interest method.

As future royalties are remitted to us by Kyowa Kirin, and subsequently from us to HCR, the balance of the deferred royalty obligation will be effectively repaid over the life of the HCR Agreement.

There are a number of factors that could materially affect the fair value of the deferred royalty obligation.

Such factors include, but are not limited to, the amount and timing of potential future royalty payments to be received from Kyowa Kirin under the 2017 Kyowa Kirin agreement, changing standards of care, the introduction of competing products, manufacturing or other delays, intellectual property matters, adverse events that result in governmental health authority imposed restrictions on the use of the drug products, significant changes in foreign exchange rates as the royalties remitted to HCR are made in U.S.

dollars while the underlying sales of the products by Kyowa Kirin are made in Japanese yen, and other events or circumstances that could result in reduced royalty payments from Kyowa Kirin, which are not within our control, and all of which would result in a reduction of non-cash royalty revenues and the non-cash interest expense over the life of the deferred royalty obligation.

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 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

In May 2018, we entered into a loan and security agreement (as amended on October 9, 2020, March 1, 2021, May 5, 2021, and July 29, 2021) (2018 Loan Agreement) with Solar Capital Ltd.

and Western Alliance Bank (collectively, the 2018 Lenders).

The 2018 Loan Agreement provided for a loan facility for up to $ 50.0 million with a maturity date of November 1, 2022 (2018 Loan).

As of the Closing Date for the 2022 Loan, as discussed below, we owed $ 25.0 million in principal payments from the 2018 Loan, which we repaid in full at that time.

As discussed in Note 9.

Derivative Liabilities , in connection with entering into the 2018 Loan Agreement, we entered into an agreement pursuant to which we agreed to pay $ 1.5 million in cash upon the occurrence of certain conditions (2018 Exit Fee).

Our obligations for the 2018 Exit Fee remained outstanding following the full repayment of the 2018 Loan in February 2022 until October 2023 when we received approval from the U.S.

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 and we subsequently paid the 2018 Exit Fee in October 2023.

SLR Investment Corp.

Loan Agreement

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 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.

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) 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.

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 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).

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 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.

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 Five 2022 Term Loans, including our cash.

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 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 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

We and HCR have an agreement in which HCR agreed to pay up to $ 20.0 million in exchange for royalty payments and commercial milestone payments that we may receive under our Kyowa Kirin Agreement.

Deferred Royalty Obligation Related to the Sale of Future Royalties of our 2024 Form 10-K for further discussion on the nature, purpose, significant rights and obligations of the parties, as well as our accounting policies regarding the HCR Agreement.

A summary of financial information related to the HCR Agreement is as follows:

Three Months Ended March 31,

($ in thousands)

Non-cash interest expense related to the sale of future royalties $ ( 2,071 ) $ ( 1,702 )

Effective interest rate 32.5 % 33.7 %

(in thousands) 2025 2024

Deferred royalty obligation balance as of January 1,

$ 25,527 $ 20,179

Non-cash interest expense related to sale of future royalties

Royalty distributed to HCR

Deferred royalty obligation balance as of March 31, $ 26,522 $ 21,881

The following table presents our long-term borrowing under the 2022 Loan Agreement:

(in thousands) March 31, 2025 December 31, 2024 Interest rate

Term A Loan $ 27,500 $ 27,500 7.95 % + 0.022 % + SOFR (subject to a floor of 1.0 %)

Term B Loan 22,500 22,500 7.95 % + 0.022 % + SOFR (subject to a floor of 1.0 %)

Term C Loan 50,000 50,000 4.25 % + 0.022 % + SOFR (subject to a floor of 4.7 %)

Term D Loan 50,000 50,000 4.00 % + 0.022 % + SOFR (subject to a floor of 4.7 %)

Total principal 150,000 150,000

Adjustments to principal value

Unamortized discount and debt issuance costs ( 1,070 ) ( 1,136 )

Unaccreted value of final fee ( 3,299 )

Long-term debt 100,707

Accreted value of final fee 2,371 1,989

Total long-term debt

151,301 150,853

Current portion of long-term debt — —

Long-term debt, net of current portion $ 151,301 $ 150,853

DERIVATIVE LIABILITIES

2018 Exit Fee

In May 2018, in connection with entering into the 2018 Loan Agreement, we entered into an agreement pursuant to which we agreed to pay $ 1.5 million in cash (2018 Exit Fee) upon any change of control transaction in respect of the Company or if we obtain both (i) U.S.

FDA approval of XPHOZAH and (ii) U.S.

FDA approval of IBSRELA, which was obtained on September 12, 2019 (2018 Exit Fee Agreement).

Notwithstanding the February 2022 prepayment of the 2018 Loan, our obligation to pay the 2018 Exit Fee would have expired on May 16, 2028.

We concluded that the 2018 Exit Fee was a freestanding derivative which was recorded at fair value as a derivative liability included in accrued expense and other current liabilities on the condensed balance sheets.

In October 2023, we received approval from the U.S.

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

2022 Exit Fee

In February 2022, in connection with entering into 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 Loan funded (2022 Exit Fee) upon (i) any change of control transaction or (ii) our achievement of net revenue from the sale of any products equal to or greater than $ 100.0 million, measured on a six (6) months basis (Revenue Milestone), tested monthly at the end of each month.

The Term C and Term D Loans do not result in payment of an additional exit fee.

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

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 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.

Specifically, the key assumptions included in the calculation of the estimated fair value of the 2022 Exit Fee derivative liability included:

(i) our estimates of both the probability and timing of achieving the Revenue Milestone and (ii) the probability and timing of funding the Term B Loan, which was dependent upon (a) approval by the U.S.

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 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 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

Changes in estimated fair value:

2018 Exit Fee — 273

2022 Exit Fee 325 126

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.

Certain of the leases have both lease and non-lease components.

We have elected to account for each separate lease component and the non-lease components associated with that lease component as a single lease component for all classes of underlying assets.

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

Facilities September 30, 2024 December 31, 2023

The total unaccreted final fee was $ 5.1 million and $ 5.4 million as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, our total future payment obligation related to the outstanding balance of the term loans, excluding interest payments, was $ 151.3 million, which is due on July 1, 2028.

There have been no changes to the principal, maturity, interest rates, interest payment terms and debt covenants since December 31, 2024.

Borrowing of our 2024 Form 10-K for additional information regarding our 2022 Loan Agreement.

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

($ in thousands)

Facilities March 31, 2025 December 31, 2024

Right-of-use assets $ 3,670 $ 2,380

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Total lease liabilities $ 3,807 $ 2,585

Weighted-average remaining life (years) 1.7 1.6

Weighted-average remaining term (in years) 2.8 1.8

Weighted-average discount rate 6.0 % 6.5 %

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

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

Three Months Ended March 31,

(in thousands)

Operating lease expense $ 977 $ 1,046

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 September 30, 2024 (in thousands):

Cash paid for operating leases $ 1,047 $ 1,166

The following table summarizes our undiscounted cash payment obligations for our operating lease liabilities as of March 31, 2025:

(in thousands)

Operating Leases

Remainder of 2025 $ 1,145

Thereafter 21

Total undiscounted operating lease payments 4,158

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STOCKHOLDERS’ EQUITY

At-the-Market Offering Agreements

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.

Pursuant to the 2021 Open Market Sales Agreement, Jefferies, as our sales agent, receives a commission of up to 3.0 % 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 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 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;

In January 2023, we filed a registration statement on Form S-3, which became effective in January 2023, 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 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.

In the 2025 first quarter, we completed no sales pursuant to the 2023 Open Market Sales Agreement.

As of March 31, 2025, we have 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 .

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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 income (loss), as follows (in thousands):

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

2024 2023 2024 2023

Stock-based Compensation Expense

Stock-based compensation expense recognized for stock options, RSUs and our ESPP is recorded as operating expenses in our condensed statements of operations and comprehensive loss, as follows:

Three Months Ended March 31,

(in thousands)

Selling, general and administrative $ 8,484 $ 5,646

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Total $ 12,088 $ 7,616

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)

A summary of our total unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 31, 2025 is as follows:

Unrecognized Compensation Expense

(in thousands)

Average Remaining Vesting Period

Stock option grants $ 64,626 2.88

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Stock Options

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

Exercise Price per

Balance at December 31, 2023 22,168 $ 4.20

A summary of our stock option activity and related information for the 2025 first quarter is as follows:

Number of Shares

(in thousands) Weighted-Average Exercise Price per Share

Balance as of December 31, 2024 28,085 $ 5.63

Options granted 4,113 $ 5.21

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Options forfeited or canceled ( 821 ) $ 7.91

Balance at September 30, 2024 28,168 $ 5.57

Exercisable at September 30, 2024 14,030 $ 5.49

Balance as of March 31, 2025 30,987 $ 5.57

Exercisable as of March 31, 2025 15,715 $ 5.45

Restricted Stock Units

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

Grant Date Fair

Value Per Share

Non-vested restricted stock units at December 31, 2023 3,646 $ 3.09

A summary of our RSUs activity and related information for the 2025 first quarter is as follows:

Number of RSUs

(in thousands) Weighted-Average Grant Date Fair Value Per Share

Non-vested restricted stock units as of December 31, 2024 8,013 $ 6.59

Granted 7,093 $ 5.21

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Forfeited ( 425 ) $ 5.79

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

Non-vested restricted stock units as of March 31, 2025 14,108 $ 5.94

Employee Stock Purchase Plan

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

During the 2025 first quarter, we issued approximately 0.2 million shares of our common stock under the ESPP.

The shares were purchased by employees at an average purchase price of $ 4.56 per share, resulting in proceeds to us of approximately $ 1.0 million.

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Issuance of Common Stock for Services

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 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,

During the 2025 first quarter, we issued no shares of our common stock to members of the board of directors who elected to receive stock in lieu of their cash fees under our Non-Employee Director Compensation Program.

SEGMENT REPORTING

We operate in a single reportable segment.

The CODM primarily uses aggregated net loss as reported on the condensed statements of operations and comprehensive loss to measure segment loss, supplemented by certain additional significant expense details reflected in the table below.

There have been no changes in the determination of segmentation or the measurements used to determine reported segment loss discussed in our 2024 Form 10-K.

Segment Reporting of our 2024 Form 10-K for more discussion on our segment reporting.

Detailed information regarding our single operating segment’s significant revenues, expenses and operating loss is as follows:

Three Months Ended March 31,

(in thousands) 2025 2024

Product sales, net $ 67,814 $ 43,512

Other revenues (1)

Total revenues 74,114 46,023

Cost of product sales 2,340 1,013

Other cost of revenue 9,963 6,115

Total cost of goods sold 12,303 7,128

Research and development (2)

Selling expenses (2)

56,800 34,852

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 September 30, Nine Months Ended September 30,

General and administrative expenses (2)

Stock-based compensation 12,088 7,616

Other segment expenses (3)

Total operating expenses 98,160 63,573

Consolidated loss from operations ( 36,349 ) ( 24,678 )

Other reconciliation items (4)

( 4,795 ) ( 1,840 )

Consolidated net loss $ ( 41,144 ) $ ( 26,518 )

(1) “Other revenues” includes revenues from our collaboration partnerships, including licensing revenue, product supply revenue and non-cash royalty revenue related to the sale of future royalties.

(2) Research and development, selling and general administrative expenses herein do not include certain allocated items, such as stock-based compensation expenses.

(3) “Other segment expenses” primarily consists of allocated facilities, information technology and employee costs of approximately $ 4.7 million and $ 3.7 million for the 2025 and 2024 first quarters, respectively.

(4) “Other reconciliation items” includes interest expense, non-cash interest expense related to the sale of future royalties, provision for income taxes and other income, net.

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 effect of stock-based awards.

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, unvested restricted stock units and ESPP shares issuable pursuant to the current purchase period.

As we had net losses for the 2025 and 2024 first quarters, all potential common shares were determined to be anti-dilutive during those periods.

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The following table sets forth the computation of net loss per common share:

(in thousands, except per share amounts)

Three Months Ended March 31,

Net loss $ ( 41,144 ) $ ( 26,518 )

Weighted average common shares outstanding - basic and diluted

238,624 233,066

Net loss per share of common stock - basic and diluted $ ( 0.17 ) $ ( 0.11 )

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:

Three Months Ended March 31,

(in thousands) 2025 2024

Options to purchase common stock 29,129 26,681

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Total 39,712 33,932

CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

On July 30 and August 12, 2021, two putative securities class action lawsuits were commenced in the U.S.

District Court for the Northern District of California naming as defendants Ardelyx and two current officers captioned Strezsak v.

Ardelyx, Inc., et al.

Ardelyx, Inc., et al., Case No.

4:21-cv-05868-HSG, and Siegel v.

Ardelyx, Inc., et al.

Ardelyx, Inc., et al., Case No.

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

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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.

While we believe the plaintiffs’ claims are without merit, we reached a settlement in the case on February 21, 2025 for an immaterial amount and the case was voluntarily dismissed on March 5, 2025.

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.

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.

XPHOZAH and other oral-only drugs, which are currently available to patients under Medicare Part D, are not administered by dialysis providers and cannot be taken during the delivery of maintenance dialysis.

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.

The Securities Class Action was voluntarily dismissed on March 5, 2025.

We believe the plaintiffs’ claims are without merit.

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On July 17, 2024, in partnership with the AAKP and the NMQF, we filed a lawsuit in the U.S.

District Court for the District of Columbia against CMS, claiming that CMS has violated its statutory and regulatory authority under MIPPA, which established the ESRD PPS bundled payment system for dialysis services in 2008.

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

XPHOZAH and other oral-only drugs, are not administered by dialysis providers and cannot be taken during the delivery of maintenance dialysis.

On November 8, 2024, the U.S.

District Court for the District of Columbia granted defendants’ Motion to Dismiss and denied plaintiffs Motion for Preliminary Injunction, or in the Alternative, for Expedited Summary Judgment.

Following the District Court’s denial of plaintiffs’ Motion to Alter or Amend the Judgment, or in the Alternative, for an Injunction Pending Appeal, plaintiffs filed an Emergency Motion for an Administrative Stay and Injunction Pending Appeal, which was denied by the United States Court of Appeals for the District of Columbia Circuit.

Appellants filed an initial brief in the appeal on February 4, 2025;

Appellees filed an initial brief on March 6, 2025;

and Appellants filed a reply brief March 27, 2025.

Both Appellees and Appellants filed a final brief on April 10, 2025.

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

District Court of Massachusetts, captioned Yarborough v.

Ardelyx, Inc .

, et al., No.

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 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 our announcement on July 2, 2024 that it had chosen not to file an application for Transitional Drug Add-on Payment Adjustment 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.

The Court appointed Tate Wood as lead plaintiff on October 30, 2024.

Lead Plaintiff filed an amended complaint on January 13, 2025, in which he added Susan Rodriguez, Laura Williams and Elizabeth Grammer as additional defendants and removed Justin Renz as a defendant.

Lead Plaintiff purports to bring claims on behalf of all those who acquired Ardelyx common stock between February 22, 2024 and July 1, 2024.

Defendants filed a motion to dismiss the amended complaint on March 14, 2025.

We believe the plaintiff’s claims are without merit.

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.

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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.

On November 7, 2024, the Court stayed the consolidated derivative action pending resolution of any and all motion(s) to dismiss in the Yarborough Action.

We believe the plaintiffs’ claims are without merit.

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

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).

As of March 31, 2025, there is no litigation pending that would reasonably be expected to have a material adverse effect on our results of operations and financial condition.

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