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Item 1A. Risk Factors

2021-03-31 compared with 2020-03-17 · 375 added, 295 removed, 277 unchanged (71% of the section changed)

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In that case, the trading price of our common stock could fall, and you may lose all or part of the money you paid to buy our common stock.

RISK FACTOR SUMMARY

Investing in our common stock involves significant risks.

You should carefully consider the risks described below before making a decision to invest in our common stock.

If we are unable to successfully address these risks and challenges, our business, financial condition, results of operations, or prospects could be materially adversely affected.

In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment.

Below is a summary of some of the risks we face.

• The long-term success of our business depends on our ability to leverage the FPC platform to develop new therapies in disease states that currently have an unmet need for management of iron deficiency.

If we are unable to develop, obtain regulatory approval for or successfully commercialize these new therapies, or if we experience significant delays in doing so, our business will be materially harmed.

• The near-term success of our business depends substantially on the successful commercialization of Triferic (dialysate) and Triferic AVNU.

If these Triferic products fail to gain broader market acceptance, our business may be harmed.

• The ongoing COVID-19 pandemic has resulted in significant disruptions to our business operations, including the commercial launch of our Triferic products and our clinical trials, which could have a material adverse effect on our business.

• Our ability to market Triferic (dialysate) and Triferic AVNU is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated.

• Clinical drug development involves a lengthy and expensive process with uncertain timelines and uncertain outcomes, and the results of prior preclinical or clinical trials are not necessarily predictive of our future results.

• Our FPC pipeline product candidates have not received regulatory approval in the disease state we are investigating.

If we are unable to obtain regulatory approvals to market such product candidates, our business will be adversely affected.

• The ongoing COVID-19 pandemic has resulted in, and may continue to result in significant disruptions to our concentrates business operations, which could have a material adverse effect on our business.

• We have limited capital resources and will likely need additional funding before we are able to achieve profitability.

If we are unable to raise additional capital on attractive terms, or at all, we may be unable to sustain our operations.

RISKS RELATED TO OUR DRUG BUSINESS

We may not be successful in commercializing Dialysate Triferic, which will impede our development and growth and may limit our long-term prospects.

In June 2018, we announced plans to commence initial steps to prepare for the commercial launch of Dialysate Triferic without waiting to receive separate reimbursement status.

While we have commenced commercialization of Dialysate Triferic as of the date of the report, we will need to add to our sales and marketing infrastructure in order to successfully commercialize Dialysate Triferic.

We do not know whether we will be able to successfully implement our commercialization strategy for Dialysate Triferic or whether our new business strategy will ultimately be successful.

We may not be able to convince potential customers

that the safety, efficacy, clinical utility of Dialysate Triferic are compelling enough to effectuate a change in their clinical practice, including potential operational changes required to adopt Dialysate Triferic.

Additionally, the initial demand for the product will impact our ability to utilize existing product inventory prior to expiration.

If we commercialize Dialysate Triferic slower than currently anticipated, we may need to write off additional inventory reserves, which could result in material accounting charges in future periods.

Additionally, the expiration of existing product inventory could limit the total inventory available for commercial sales while we ramp-up commercial production and attempt to manage production in light of anticipated demand.

In assessing our ability to meet these challenges, a potential investor should take into account our recent management turnover, limited cash position, limited sales and marketing personnel and their limited commercialization experience, the competitive conditions existing in our industry and general economic conditions.

Our future success is largely dependent on our ability to successfully implement our Dialysate Triferic commercialization business strategy.

Our revenues may be adversely affected if we fail to implement our Dialysate Triferic commercialization business strategy.

Our near-term success depends substantially on the commercialization of Dialysate Triferic and, if approved, I.V.

Although Dialysate Triferic has been approved by the FDA, and the FDA may approve I.V.

Triferic, we may not be able to commercialize either product successfully.

Dialysate Triferic launched commercially in the United States in May 2019 and I.V.

Triferic has a PDUFA date of March 28, 2020;

however, it is possible that either version of Triferic will not gain market acceptance and that we will not be successful in the commercialization of these products.

We do not know whether we will be able to successfully implement our commercialization strategy for Dialysate Triferic and I.V.

Triferic, if approved, or whether our new business strategy will ultimately be successful.

Both formulations of Triferic will be reimbursed “within the bundle,” which means that dialysis providers will not receive any additional amount of reimbursement from Medicare or Medicaid to compensate them for the cost of purchasing and administering Triferic.

This reimbursement status may result in a slower rate of commercial adoption, as we must work to show dialysis providers that improved patient outcomes, the reduction of utilization in other therapies and the resulting savings offset the costs associated with Triferic.

Additionally, Triferic competes against current anemia therapies (including intravenous iron and the ESA class of drugs) and possibly other future products.

Additionally, it may be difficult to gain market acceptance from dialysis chains, anemia managers and nephrologists and such acceptance may be slower than expected, if at all.

Market acceptance will depend on a number of factors, such as demonstration of Dialysate Triferic’s safety and efficacy, cost-effectiveness, and advantages over existing products.

Other factors that may impact the commercial success and ultimate profitability of Triferic include:

the rate of adoption of Dialysate Triferic and I.V.

Triferic relative to the shelf life of the existing inventory that we have on hand and whether we can sell our existing inventory before it expires;

The long-term success of our business depends on our ability to leverage the FPC platform to develop new therapies in disease states that currently have an unmet need for management of iron deficiency.

Successful development and ultimate regulatory approval of new therapies based on our FPC platform in disease states outside of ESRD where iron replacement is required is critical to the future success of our business.

We conducted an evaluation of the potential utility of FPC in certain disease states and believe that, based on the results of this analysis, FPC would be viable.

However, there is no assurance that our findings regarding the clinical and commercial viability of FPC are accurate or provide a complete portrayal of the medical and commercial challenges FPC will face.

Furthermore, new legislation, reimbursement guidance, regulatory requirements or medical developments may negatively impact our conclusion that FPC is economically and clinically viable.

The development of new therapies is lengthy, time-consuming and expensive.

We expect to incur substantial expense for both preclinical studies and clinical trials with no guarantee that these efforts would either be completed in a timely manner or that they would result in a positive outcome.

Completion of clinical trials may take several years or more.

The length of time can vary substantially with the type, complexity, novelty and intended use of the product.

Factors that can influence and affect the rate of completion of clinical trials include the potential delay by a partner in beginning a clinical trial, the failure of third-party contract research organizations (“CROs”) and other third-party service providers and independent clinical investigators to manage and conduct the trials properly, to perform their oversight of the trials or to meet expected deadlines, the inability to recruit clinical trial participants at the expected rate, the inability to follow patients adequately after treatment, unforeseen safety issues and unforeseen governmental or regulatory issues or concerns, including those of the FDA, DEA and other regulatory agencies.

We expect that we will need to raise additional funds to develop new therapies based on our FPC platform.

We may not be able to obtain or secure the funding necessary to complete such development or initiate or complete the necessary clinical trials.

In addition, there is no assurance that such funding will be available to us or that it will be obtained on terms favorable to us or will provide us with sufficient funds to meet our objectives.

Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.

The near-term success of our business depends substantially on the successful commercialization of Triferic (dialysate) and Triferic AVNU.

If these Triferic products fail to gain broader market acceptance, our business may be harmed.

Triferic (dialysate) launched commercially in the United States in May 2019 and recorded sales of $1.2 million through December 31, 2020.

Triferic AVNU was approved by the FDA in March 2020 and made commercially available in February 2021.

There are many challenges associated with the commercialization of Triferic (dialysate) and Triferic AVNU (collectively referred to as "Triferic"), including challenges associated with reimbursement, market penetration and acceptance, competition and implementation.

There is no assurance that Triferic will gain broad market acceptance or that we will be successful in the ongoing commercialization of these products.

The commercial success and ultimate profitability of Triferic depends in part on reimbursement of Triferic by government and commercial payors.

Both formulations of Triferic are reimbursed “within the bundle,” which means that dialysis providers will not receive any additional amount of reimbursement from Medicare or Medicaid to compensate them for the cost of purchasing and administering Triferic.

This reimbursement constraint has resulted and may continue to result in a slower rate of commercial adoption than initially anticipated.

In order to address this constraint, we are working with dialysis providers to demonstrate with healthcare economic data the improved patient outcomes and reduction in utilization of other anemia therapies associated with Triferic, as well as the resulting savings that offset the costs associated with Triferic.

The commercial success of the Triferic portfolio would be significantly impacted if we are unable to generate additional positive healthcare economic data used in these conversations.

In order to gain broad market acceptance, we expect that we will need to penetrate the dialysis market, which is highly concentrated in the United States.

DaVita and Fresenius own or manage a large number of the outpatient dialysis facilities in the United States, which account for approximately 73% of the total number of hemodialysis patients in the United States.

This represents a substantial majority of Triferic’s addressable market opportunity in the free-standing dialysis clinic setting.

Due to this concentration, these entities have substantial purchasing leverage, which may put pressure on our pricing by their potential ability to extract price discounts on our products, correspondingly negatively impacting our bargaining position and profit margins.

To date, neither Fresenius nor DaVita have adopted Triferic in their dialysis facilities.

We do not expect to be able to successfully penetrate a large portion of the total addressable market in the United States without Fresenius or DaVita.

Increased market acceptance will depend on a number of factors, such as demonstration of Triferic's safety and efficacy, cost-effectiveness, and advantages over existing products.

Other factors that have impacted and may continue to impact the commercial success and ultimate profitability of Triferic include:

• the rate of adoption of the Triferic portfolio relative to the shelf life of the existing inventory that we have on hand and whether we can sell our existing inventory before it expires;

• our ability to manage inventory available for commercial sale;

the effectiveness of our marketing, sales and distribution strategies and operations for development and commercialization;

the impact of Dialysate Triferic and I.V.

Triferic on established customer protocols, formularies and operational practices;

reimbursement of either formulation of Triferic by government and commercial payors;

our ability to execute our marketing strategy without significant additional expenditures;

• our competitors’ activities, including aggressive marketing and pricing practices and other tactics to retain their market share;

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• our ability to comply with ongoing regulatory requirements applicable to either formulation of Triferic and the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping applicable to Triferic;

the impact of certain royalties related to our sale of either formulation of Triferic paid by us based on the profitability of either formulation of Triferic;

• the impact of certain royalties related to our sale of Triferic paid by us based on the profitability of Triferic;

• our ability to avoid third party patent interference or patent infringement claims;

our ability to maintain a continued acceptable safety profile of either formulation of Triferic;

• our ability to maintain a continued acceptable safety profile of Triferic;

• the discovery of previously unknown problems with either formulation of Triferic or with any third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements.

the ability to successfully manufacture commercial product to enable a launch of I.V.

Triferic in 2020;

the ability to successfully complete our I.V.

Triferic commercialization planning thereby enabling a launch of Triferic I.V.

An adverse development with respect to any of the foregoing may have a material adverse effect on our ability to manufacture and market either formulation of Triferic.

Additionally, Triferic competes against current anemia therapies (including macromolecular intravenous iron and the ESA class of drugs) and may in the future compete with products such as HIF-PHIs, if approved.

It has been difficult to gain market acceptance from dialysis chains, anemia managers and nephrologists.

Implementation of Triferic in clinics requires changes to established customer protocols, formularies, administration methods and operational practices.

There is no assurance that we can persuade dialysis centers to adopt their protocols and utilize the drugs in a manner consistent with state regulatory agencies.

This challenge has been enhanced by the ongoing COVID-19 pandemic, as dialysis centers are often unable or unwilling to make such changes.

In addition, clinics typically need to adjust their protocols to optimize the financial impact of Triferic.

We expect that the success of the commercialization of Triferic will be contingent upon being able to overcome these hurdles which may continue to be slower than anticipated, if at all.

We encounter additional challenges in gaining market acceptance with dialysis clinics specific to Triferic (dialysate) and Triferic AVNU.

Specifically, Triferic (dialysate) may only be used in clinics that utilize liquid bicarbonate, either in the form of a central tank delivery system or single use jugs.

We continue to observe a trend of clinics converting from liquid bicarbonate to dry bicarbonate, which thereby prohibits utilization of Triferic (dialysate).

In addition, the utilization of Triferic (dialysate) involves mixing the powder form into the central loop dialysate system or placing the 5mL ampule into the single use jugs, which clinics may be hesitant to do.

We have also received feedback from clinics that it is difficult to identify a convenient method for delivering Triferic AVNU via slow infusion.

While we anticipated this might be a challenge in some cases and we have been actively working to develop alternative administration methods that can be more widely adopted, we may not be able to identify a delivery method that clinics find to be convenient and feasible.

Failure to overcome these challenges could prevent a widespread adoption of Triferic.

The commercial success and ultimate profitability of Triferic will also depend on the effectiveness of our marketing, sales and distribution strategies and operations for commercialization and our ability to execute our marketing strategy without significant additional expenditures.

While we hired a sales force for the launch of Triferic (dialysate) in 2019, we did not hire additional sales representatives or invest heavily into the launch of the commercialization of Triferic AVNU.

This investment strategy could negatively impact the adaptation of Triferic AVNU within clinics.

We cannot assure you that we will be able to generate meaningful and sustained revenues through the sale of either formulation of Triferic.

If we are not successful in commercializing either formulation of Triferic, or are significantly delayed in doing so, our entire investment in Triferic may be of no value, our inventory of finished product may expire or become obsolete (resulting in write-offs of such inventory), our licensing rights could be materially adversely affected and the price of our common stock could substantially decline.

Even if we are successful in commercializing either formulation of Triferic, since the market is highly concentrated with two significant suppliers, our continued success may depend on adoption of Dialysate Triferic by the limited number of existing dialysis providers.

If we are unable to develop and maintain sales, marketing and distribution capabilities to sell and market Dialysate Triferic or any other products we may develop, our product sales may be hindered.

We are still in the process of establishing an internal sales organization for the sale, marketing and distribution of Dialysate Triferic, as well as I.V.

Triferic (if approved).

In order to successfully commercialize Dialysate Triferic, I.V.

Triferic and future product candidates, we must establish and/or increase our sales, marketing, distribution and other non-technical capabilities.

The development of a sales organization to market Dialysate Triferic, I.V.

Triferic, or any future product candidate, is expensive and time-consuming, and we cannot be certain that we will be able to successfully develop this capacity or that this function will execute as expected.

If we are unable to establish adequate sales, marketing and distribution capabilities, we may not be able to generate product revenue and our business and results of operations will suffer.

If we are unable to use our Dialysate Triferic inventory before its shelf life expires, we will likely have to write-off such inventory, which will likely have a material adverse effect on our business, results of operations, financial position and cash flows.

Given that we have recently commenced commercialization of Dialysate Triferic, we cannot predict the rate of future sales and usage of the drug.

As of December 31, 2019, we had a gross inventory balance for Dialysate Triferic of $3.5 million, including approximately $2.9 million in Dialysate Triferic’s active pharmaceutical ingredient and $0.6 million in finished goods inventory.

Of this amount, we had reserved $2.8 million related to our Dialysate Triferic finished goods and active pharmaceutical ingredient inventory.

As a result of this reserve, our total Dialysate Triferic inventory had a net book value of $0.7 million as of December 31, 2019.

The Dialysate Triferic inventory has an initial shelf life ranging from one to three years.

If we are unable to utilize some or all of our Dialysate Triferic inventory before its shelf life expires, some or all of our investment in Dialysate Triferic inventory may not be salable.

This would reduce the inventory we have available for sale and require us to reserve for the reduction in value, which would likely require us to write-off the value of such inventory.

We may also need to reserve for inventory that we estimate will not be sold before such inventory expires.

Any such inventory reserve could have a material adverse effect on our business, results of operations, financial position and cash flows.

In order to realize the full potential value for our Triferic franchise, we will need to obtain regulatory approval of I.V.

Although we believe that we currently have sufficient data to support the approval of I.V.

Triferic in the United States, there is no guarantee of success.

In order to expand and realize the full potential value of our Triferic franchise, we will need to obtain approval of I.V.

Triferic by the FDA, as well as foreign regulators, such as the EMA.

We believe that the market opportunity for I.V.

Triferic is greater than for Dialysate Triferic.

Although we believe that we have sufficient data to support the approval of I.V.

Triferic, it is possible that the FDA could request additional data regarding the product or the manufacturing process.

Accordingly, there is no guarantee the FDA or any other foreign regulator will approve I.V.

In reviewing our planned NDA submission for I.V.

Triferic, the FDA may find deficiencies that raise safety or efficacy concerns or may otherwise require additional clinical testing or impose other requirements, which could significantly delay approval or result in us not receiving approval at all.

In addition, varying interpretations of the data obtained from testing could delay, limit or prevent regulatory approval.

Furthermore, at the time of FDA approval of our NDA for Dialysate Triferic, we agreed to perform a post-approval clinical study of Dialysate Triferic in a pediatric population.

If we do not timely satisfy our post-approval study requirements, it is possible that the FDA could decline to act on future Dialysate Triferic or I.V.

Triferic filings.

If approval is not granted for I.V.

Triferic on the timeframe we expect, or if it is not approved at all, the value of our Triferic franchise would be severely limited.

Triferic, if approved, is ineligible for add-on reimbursement status, the commercial opportunity for the drug product in the United States could be limited.

On October 31, 2019, CMS issued a final rule to update payment policies and rates under the ESRD Prospective Payment System for renal dialysis services to beneficiaries on or after January 1, 2020.

("2020 Final Rule").

The 2020 Final Rule included certain revisions to the eligibility requirements for the CMS TDAPA program.

Under the revised TDAPA rules, ESRD drugs approved by the FDA under NDA Type 3 (or certain combination types) are ineligible for TDAPA effective as of January 1, 2020.

As previously disclosed, we have filed an NDA for I.V.

The FDA has informed us that the NDA for I.V.

Triferic will be classified as a Type 3 NDA.

As a result, the Company believes that I.V Triferic will not be eligible for TDAPA.

This could significantly limit the overall commercial opportunity in the United States for I.V.

Triferic should the FDA approve the drug.

Our ability to market Dialysate Triferic is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated.

If we are not successful in commercializing either formulation of Triferic, our entire investment in Triferic may be of no value, our inventory of finished product may expire or become obsolete (resulting in write-offs of such inventory), our licensing rights could be materially adversely affected and the price of our common stock could substantially decline.

Even if we are successful in commercializing either formulation of Triferic, since the market is highly concentrated, our continued success may depend on adoption of Triferic by the limited number of existing dialysis providers.

The ongoing COVID-19 pandemic has resulted in significant disruptions to our business operations, including the commercial launch of our Triferic products and our clinical trials, which could have a material adverse effect on our business.

Our business and its operations, including but not limited to our sales and marketing efforts and our research and development activities, have been and are expected to continue to be adversely affected by the COVID-19 pandemic.

In response to public health directives and orders related to COVID-19, we have implemented work-from-home policies for substantially all employees, excluding our essential manufacturing and distribution employees.

The effects of executive and similar government orders, shelter-in-place orders and our work-from-home policies have negatively impacted our growth and productivity in our commercial efforts of our Triferic products, disrupted our business, including our sales and marketing activities, and delayed our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

Quarantines, shelter-in-place, executive and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases, may impact personnel at our manufacturing facilities and third-party manufacturing facilities in the United States, Europe and other countries, or the availability or cost of materials we use or require to conduct our business, including product development, which would disrupt our supply chain.

If the COVID-19 pandemic were to negatively affect our manufacturing facilities, the costs related to such manufacturing may increase and the productivity of our facilities may decrease.

Furthermore, some of our manufacturers and suppliers are in Europe and may be impacted by port closures and other restrictions resulting from the COVID-19 pandemic, which may disrupt our supply chain or limit our ability to obtain sufficient materials for our drug products.

We commercially launched Triferic (dialysate) in the United States in May 2019 and Triferic AVNU in February 2021.

Quarantines, shelter-in-place, executive and similar government orders, or changes in prospective customer practices in response to the COVID-19 outbreak, have had and may continue to have a negative impact on our sales and marketing activities, particularly, our sales representatives are unable to interact with current and potential customers to the same extent as before the onset of the COVID-19 pandemic.

Depending on the severity of the impact on our sales and marketing efforts, market acceptance of Triferic could be hampered and commercial uptick slower than normal.

In addition, we may face decreased demand for Triferic if dialysis patients are unable to travel to dialysis clinics or if dialysis clinics, if dialysis patients are found to be disproportionally affected by COVID-19 due to their heighten risk status, or if dialysis clinics are unable to make additional protocol changes that are required for Triferic.

In order to ensure the safety of patients and staff at the dialysis clinics that use our Triferic products, we expect the dialysis clinics will implement a number of changes to their safety procedures and maintain changes already made.

In addition, the dialysis clinics may face challenges related to decreased staffing, if staff members are affected by COVID-19.

Changes to safety procedures and/or staffing issues may impede the clinics’ ability to make additional protocol changes that are required for Triferic.

In addition, our clinical trials and our partners’ clinical trials have been and may continue to be affected by the COVID-19 pandemic.

For example, Wanbang is our commercialization partner for both Triferic (dialysate) and Triferic AVNU in China and has initiated clinical studies but these studies may experience slower than normal patient enrollment as a result of the COVID-19 pandemic.

Such delays may result in a delay in Wanbang’s submission to the Chinese regulatory authorities for approval.

In addition, meetings between Sun Pharma and the regulatory authorities in India related to our Triferic products have been postponed due to government restrictions in India.

Lastly, meetings between Jeil Pharma and the regulatory authorities in South Korea could be postponed due to potential government restrictions in South Korea.

If COVID-19 continues to spread in the United States and elsewhere, we or our partners may experience additional disruptions that could severely impact our business and clinical trials, including:

• delays in receiving authorization from local regulatory authorities to initiate our planned clinical trials;

• delays in receiving legalization documents from foreign embassies, which are required to allow our partners to direct activities on behalf of the Company in local markets;

• delays or difficulties in enrolling patients in our clinical trials;

• delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

• delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials, including interruption in global shipping that may affect the transport of clinical trial materials;

• changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

• diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

• interruption of key clinical trial activities, such as clinical trial site monitoring and data entry and verification, due to limitations on travel imposed or recommended by federal or state governments, employers and others, or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the completeness and integrity of clinical trial data and, as a result, determine the outcomes of the trial;

• risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events;

• risk that participants enrolled in our clinical trials will not be able to travel to our clinical trial sites as a result of quarantines or other restrictions resulting from COVID-19;

• risk that participants enrolled in our clinical trials will not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services;

• interruptions or delays in preclinical studies due to restricted or limited operations at our contracted research and development laboratory facilities;

• delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees;

• limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;

• refusal of the FDA to accept data from clinical trials in affected geographies;

• interruption or delays to our clinical activities.

The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically.

While the potential economic impact brought by COVID-19, and the duration of such impact, may be difficult to assess or predict, the widespread pandemic has resulted in significant disruption of global financial markets, which could reduce our ability to access capital and negatively affect our future liquidity.

In addition, a recession or market correction resulting from the spread of COVID-19 and related government orders and restrictions could materially affect our business and the value of our common stock.

The COVID-19 pandemic continues to evolve rapidly.

The ultimate impact of the COVID-19 pandemic or a similar public health emergency is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems, or the global economy as a whole.

However, any one or a combination of these events could have an adverse effect on the operation of and results from our clinical trials and on our other business operations, which could negatively impact our business, operating results and financial condition.

Our ability to market Triferic (dialysate) and Triferic AVNU is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated.

The FDA must approve any new indication for an approved product.

Dialysate Triferic is approved by the FDA for use in adult patients receiving hemodialysis treatments and has not yet been approved for other indications or for other claims for which we may seek approval, such as ESA-sparing.

We are not able to promote Dialysate Triferic or encourage our customers to use Dialysate Triferic for purposes other than the indications of use that have been specifically approved by the FDA as safe and effective.

If we are not able to obtain FDA approval for additional indications for Dialysate Triferic or secure an expanded product label, our ability to fully market Dialysate Triferic on the basis of cost savings or improved patient outcomes may be limited, which would limit our ability to take full advantage of Dialysate Triferic’s market opportunity.

Because we may be unable to complete our development, manufacturing and commercialization of our products, we could face significant harm to our business plans, prospects, results of operations, financial condition and liquidity.

Commercializing Dialysate Triferic depends on a number of factors, including but not limited to:

further product and manufacturing process development;

completion, refinement and management of our supply chain and distribution channels;

meeting regulatory requirements for clinical information;

differentiation of our products from competitive products, including those in development by other companies;

demonstration of efficiencies that will make our products attractively priced;

development of an adequate sales force and sales channels necessary to distribute our products and achieve our desired revenue goals.

We cannot commercialize I.V.

Triferic unless and until we receive FDA approval of our NDA for this product candidate, which was submitted in May 2019.

Even if the FDA approves I.V.

Triferic for commercialization, under the 2020 Final Rule published by CMS in October 2019, it appears that I.V.

Triferic is not be eligible for add-on reimbursement, meaning I.V.

Triferic would be required to be sold within the bundled payment for dialysis treatment.

This could significantly limit the overall commercial opportunity in the United States for I.V.

We cannot assure investors that the strategies we intend to employ will enable us to support the manufacture, distribution and selling of Dialysate Triferic or I.V.

Triferic (if approved).

If we are unable to implement the necessary steps of our business plan, our prospects, results of operations and financial condition will suffer.

Triferic (dialysate) and Triferic AVNU are approved by the FDA for use in adult patients receiving hemodialysis treatments and has not yet been approved for other indications or for other claims for which we may seek approval.

We are not able to promote Triferic (dialysate) and Triferic AVNU or encourage our customers to use Triferic (dialysate) and Triferic AVNU for purposes other than the indications of use

that have been specifically approved by the FDA as safe and effective.

If we are not able to obtain FDA approval for additional indications for Triferic (dialysate) or secure an expanded product label, our ability to fully market Triferic (dialysate) on the basis of cost savings or improved patient outcomes may be limited, which would limit our ability to take full advantage of the market opportunity for Triferic (dialysate).

If we are unable to obtain and maintain adequate protection for our data, intellectual property and other proprietary rights, our business may be harmed.

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and Dialysate formulations of Triferic, these patents expire in 2029.

The previously issued foundational composition-of-matters patents for Triferic expired in 2016.

The previously issued foundational composition-of-matter patents for Triferic expired in 2016.

In light of the current patent protection that we have for Triferic, it is possible that a competitor could seek to manufacture a generic version of Triferic using product specifications and manufacturing methods that do not infringe our issued patent.

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Failure to qualify for regulatory exclusivity, or failure to obtain or maintain the necessary extent or duration of such protections for our drug products could affect our revenues, our decision on whether to market our drug products in a particular country and could otherwise have an adverse impact on our results of operations.

In the United States, our regulatory exclusivity for Dialysate Triferic as a new chemical entity started with FDA approval of the product.

In the United States, our regulatory exclusivity for Triferic (dialysate) as a new chemical entity started with FDA approval of the product.

Because of the delay between approval and the commercial launch of Triferic, our regulatory exclusivity has expired and we must rely on patent protection for the long-term protection of our Triferic franchise.

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If a CMO is unable to manufacture Triferic in sufficient quantities and on a consistent basis, or if it becomes unwilling to produce Triferic for us, we may not be able to supply our customers in a timely manner.

Triferic and our liquid formulation of Dialysate Triferic, we have a single-source finished goods supplier and do not have a long-term supply contract.

For Triferic (dialysate) and Triferic AVNU, we have a single-source finished goods supplier and do not have a long-term supply contract.

If we were to experience a supply disruption, it could take an extended period of time to find and qualify an alternate supplier.

The manufacturing facilities and processes used by our CMOs must be approved by the FDA and foreign regulators, where applicable, before the drug products manufactured by such CMOs can be sold.

After approval, CMOs must meet certain ongoing regulatory requirements for product testing and stability of our commercially marketed products.

After approval, CMOs must

meet certain ongoing regulatory requirements for product testing and stability of our commercially marketed products.

We do not control the manufacturing processes of our CMOs and depend on them to comply with current good manufacturing practices (“cGMP”), and obtain and maintain regulatory approval.

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If that was to happen, we may be forced to find another capable CMO or shift production to another CMO that is already approved and under contract with us.

Any such circumstance could

significantly hamper our ability to supply our customers with our drug products in a timely manner, which may have a material adverse effect on our business, results of operations, financial position and cash flows.

Any such circumstance could significantly hamper our ability to supply our customers with our drug products in a timely manner, which may have a material adverse effect on our business, results of operations, financial position and cash flows.

We rely on third party suppliers for raw materials and packaging components of our drug products.

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We may not be able to obtain the raw materials or packaging components we need, or the price of such materials or components may rise significantly, for a variety of reasons, including but not limited to:

a business interruption, including a force majeure, cyber-attack or labor strike at a supplier;

• a business interruption, including a force majeure, cyber-attack, labor strike at a supplier of COVID-caused halt or slowdown of supply of raw materials or production of components;

• regulatory requirements or action by regulatory agencies or others against a supplier, including delays in receiving necessary approvals;

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If we are unable to obtain our raw materials and packaging components and are not able to establish alternative supply sources, or if the prices for such items increase substantially, our CMOs may not be able to produce the desired quantities of our drug products and our expected gross profit margins may be materially adversely affected.

An epidemic of the coronavirus disease is ongoing in China and other parts of the world and may result in significant disruptions to our and our partners’ clinical trials, supply chain and product demand, any of which could have a material adverse effect on our business.

An epidemic of the coronavirus disease is ongoing in China and other parts of the world.

As the outbreak is still evolving, much of its impact remains unknown.

As of this filing, it is impossible to predict the effect and potential spread of the coronavirus disease in China and globally.

Wanbang is our commercialization partner for both Dialysate Triferic and I.V.

Triferic in China.

We currently expect Wanbang to initiate additional clinical studies during 2020 that are necessary to support a submission for regulatory approval in China.

We also expect to begin enrollment in a pediatric clinical study in 2020.

However, the coronavirus disease may result in significant delays or disruptions for such clinical trials, which could affect the regulatory approval process.

If the patients involved with these clinical trials become infected with the coronavirus disease, we may have more adverse events and deaths in our clinical trials as a result.

We may also face difficulties enrolling patients in our clinical trials if the patient populations that are eligible for our clinical trials are impacted by the coronavirus disease.

Additionally, if our clinical trial patients are unable to travel to our clinical trial sites as a result of quarantines or other restrictions resulting from the coronavirus disease, we may experience higher drop-out rates or delays in our clinical trials.

We may also face decreased demand if our dialysis patients are unable to travel to dialysis clinics.

The severity of the coronavirus disease could also make access to our existing supply chain difficult or impossible and could materially impact our business.

Any one or a combination of these events could have an adverse effect on our business.

We may not be successful in obtaining foreign regulatory approvals or in arranging out-licensing partners capable of obtaining the approvals needed to effectively commercialize Dialysate Triferic, I.V.

Triferic or any other drug product candidates outside

of the United States.

Even if we, or our partners, are successful in obtaining the required regulatory approvals, we may not be effective at marketing our drug products in certain markets or at all.

The regulatory procedures for obtaining marketing approval of drug products and product candidates, including Dialysate Triferic and I.V.

Triferic, outside the United States vary from country to country and such approvals can be difficult to obtain.

The regulatory procedures for obtaining marketing approval of drug products and product candidates, including Triferic (dialysate) and Triferic AVNU, outside the United States vary from country to country and such approvals can be difficult to obtain.

Regulatory approval in foreign countries may require additional clinical testing, such is the case with Triferic and our ability to file for regulatory approval in Europe.

These tests may be expensive and time consuming and there can be no assurance as to our ability to achieve a positive result, even if we have had positive clinical trial results in the past.

Even after foreign approvals are obtained, further delays may be encountered before products may be marketed.

We have encountered and may continue to encounter delays in the foreign approval process, which could delay the initiation of marketing of our products.

Many countries require additional government approval for price reimbursement under national health insurance systems.

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Thus, our strategy is to out-license the rights to our drug products in markets outside the United States to partners who we believe will have the necessary resources and expertise to obtain regulatory approval and ultimately commercialize our out-licensed drug products.

However, we may not be successful in finding new partners who will be willing to invest in our drug products outside the United States and even if we are able to find new partners, they may not be able to obtain the necessary foreign regulatory approvals.

However, we may not be successful in finding new partners who will be willing to invest in our drug

products outside the United States and even if we are able to find new partners, they may not be able to obtain the necessary foreign regulatory approvals.

If we are not successful in out-licensing our drug products outside of the United States or entering into other arrangements with partners capable of obtaining the necessary regulatory approvals to commercialize our drug products, we may be forced to seek regulatory approval and market these products ourselves.

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These partners may face stiff competition, government price regulations, generic versions of our drug products, violations of our intellectual property rights and other negative events or may otherwise be ineffective in commercializing our drug products, any of which could reduce the market potential for our drug products and our success in those markets.

If Dialysate Triferic, I.V.

Triferic or any other drug product candidates are approved and marketed outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.

We may be subject to additional risks if Dialysate Triferic, I.V.

Triferic or any other drug product candidates are approved and marketed outside of the United States, including:

If Triferic (dialysate), Triferic AVNU or any other drug product candidates are approved and marketed outside of the United States, a variety of risks associated with international operations could materially adversely affect our business.

We may be subject to additional risks if Triferic (dialysate), Triferic AVNU or any other drug product candidates are approved and marketed outside of the United States, including:

• reduced protection for intellectual property rights;

• additional risk of litigation;

• unexpected changes in tariffs, trade barriers and regulatory requirements;

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Even if we are able to enter into business development arrangements, they could have a negative impact on our business and our profitability.

As part of our business strategy to expand our drug product portfolio, we are seeking to acquire or in-license other drug products or product candidates that we believe are a complementary fit with our current product portfolio, as well as other product or product candidates that we believe have substantial development potential.

As part of our business strategy to expand our drug product portfolio, if we would seek to acquire or in-license other drug products or product candidates that we believe are a complementary fit with our current product portfolio, as well as other product or product candidates that we believe have substantial development potential.

We may not be able to identify such products or product candidates.

If we do, the negotiation of such arrangements can be a lengthy and complex process and there can be no

assurance that any such negotiations will be completed on a timely basis or at all, or result in an arrangement that will enable us to effectively integrate, develop and launch such products or product candidates effectively.

If we do, the negotiation of such arrangements can be a lengthy and complex process and there can be no assurance that any such negotiations will be completed on a timely basis or at all, or result in an arrangement that will enable us to effectively integrate, develop and launch such products or product candidates effectively.

In addition, the market potential for new drug products or product candidates is highly uncertain and evaluation of such potential requires significant judgment and assumptions.

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An increase in our exposure to uncollectible accounts could have a material adverse effect on our business, results of operations, financial position and cash flows.

Since 2011, CMS has continued to modify reimbursement policies for dialysis under the ESRD prospective payment system generally resulting in lower payment to dialysis providers.

Since 2011, CMS has continued to modify reimbursement policies for dialysis under the ESKD prospective payment system generally resulting in lower payment to dialysis providers.

We anticipate that dialysis providers will continue to seek ways to reduce their costs per treatment due to this change in reimbursement practice, which could reduce our sales and profitability and have a material adverse effect on our business, results of operations, financial position and cash flows.

The Trump administration and members of Congress have introduced legislation in both the House of Representatives and Senate to repeal and/or replace all or part of the Patient Protection and Affordable Care Act ("PPACA").

Such legislation includes potential changes to or the repeal of Medicaid expansion, coverage for pre-existing conditions and insurance coverage minimum benefits.

The likelihood of passage and the impact of this legislation is uncertain.

However, it could potentially impact reimbursement by Medicare and Medicaid programs for our drug products and dialysis and could negatively affect the ability of certain individuals to obtain coverage.

Other federal and state healthcare reform measures could be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, or change the methods used by Medicare and Medicaid to reimburse providers, including the “bundled” payment model and the availability of transitional separate reimbursement.

Federal and state healthcare reform measures could be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, or change the methods used by Medicare and Medicaid to reimburse providers, including the “bundled” payment model and the availability of transitional separate reimbursement.

Any such reforms could potentially impact reimbursement by Medicare and Medicaid programs for our drug products and dialysis and could negatively affect the ability of certain individuals to obtain coverage.

As a result of these changes to Medicare and Medicaid reimbursement, the dialysis provider industry may continue to consolidate.

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If we fail to remain in compliance with these license agreements, we could forfeit the rights to these patents, which could negatively impact our ability to commercialize our products.

We have acquired rights to certain patents under license agreements, including with an affiliate of Dr.

Ajay Gupta, our Chief Scientific Officer.

These in-licensed patent rights cover I.V.

Triferic and have other claims that could cover Triferic and other products.

We have acquired rights to certain patents under license agreements, including from an affiliate of Dr.

Ajay Gupta, our former Chief Scientific Officer.

These in-licensed patent rights cover Triferic AVNU and have other claims that could cover Triferic and other products.

If we fail to remain in compliance with the terms of these license agreements, including due diligence obligations relating to our efforts to develop and commercialize licensed products in certain markets, we could be found to be in breach of these license agreements.

If this was to happen, the licensor could terminate the license agreement in certain circumstances, causing us to forfeit our rights to the licensed patents.

This could cause us to lose the ability to sell certain products, including I.V.

Triferic, and could potentially subject us to expensive and protracted litigation.

This could cause us to lose the ability to sell certain products, including Triferic and Triferic AVNU, and could potentially subject us to expensive and protracted litigation.

Any of these occurrences could significantly harm our results of operations and future prospects.

The dialysis market is highly concentrated in the United States, with two organizations (DaVita and Fresenius) accounting for approximately 73% of the total number of hemodialysis patients.

Given this concentrated market power, our success in commercializing Triferic will depend in part on the willingness of DaVita and Fresenius to adopt Triferic.

The dialysis market is highly concentrated in the United States.

DaVita and Fresenius own or manage a large number of the outpatient dialysis facilities located in the United States, which account for 73% of the total number of hemodialysis patients in the United States.

This represents a substantial majority of Triferic’s addressable market opportunity in the free-standing dialysis clinic setting.

and profit margins.

Additionally, if one or both of these entities elect to not adopt Triferic, that decision would have a significant impact on our ability to successfully penetrate a large portion of the total addressable market in the United States.

New classes of drugs, such as HIF-PHIs, may limit the need for iron to be administered to ESRD patients.

New classes of drugs, such as HIF-PHIs, may limit the need for iron to be administered to ESKD patients.

A new class of drugs, known as HIF-PHIs, is currently in development for a variety of indications, including the treatment of anemia for patients with chronic kidney disease.

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Certain HIF-PHI compounds, including roxadustat and vadadustat, have reached or completed Phase 3 development in the United States, and an NDA for roxadustat was submitted in the United States in December 2019.

If successfully developed and approved, HIF-PHIs could potentially offer a more convenient, more effective and/or safer alternative to injectable ESAs for treatment of anemia in CKD patients while potentially increasing iron availability for hemoglobin synthesis.

If successfully developed and approved, HIF-PHIs could potentially offer a more convenient, more effective and/or safer alternative to injectable ESAs for treatment of anemia in HDD-CKD patients while potentially increasing iron availability for hemoglobin synthesis.

It is possible that HIF-PHIs may significant limit or potentially eliminate the need for parenteral iron to be administered to patients on dialysis.

It is also possible that it is not medically appropriate to use a HIF-PHI in conjunction with Triferic.

Historically, iron has been provided to patients within the dialysis setting via an intravenous push as this has been viewed as a more effective way to provide iron than oral iron products.

However, it is possible that clinicians may start to provide patients with oral iron agents, instead of IV iron or Triferic.

Significant utilization of oral agents would diminish the commercial opportunity of Triferic within ESRD dialysis patients receiving hemodialysis.

Part of the growth strategy of the Triferic portfolio is to evaluate and potentially initiate clinical programs for new indications.

We are currently conducting research as to the medical and economic viability of Triferic in new indications and it is possible that the research may determine that Triferic is not either medically or economically viable in new indications.

A potential growth driver for the Triferic portfolio is the potential utility of Triferic in disease states outside of ESRD where iron replacement is required.

We are currently performing an evaluation of the potential utility of Triferic in certain other disease states.

It is possible that the results of this project may show that Triferic and/or its potential presentations may not be medically viable within these new disease states.

It is also possible that the results of this project may demonstrate that even if Triferic were medically viable in new disease states, it would not be economically viable or we may not have the funds to conduct required clinical trials.

To launch a product in a new disease state, we would likely need to substantially conclude that Triferic could supplement and/or compete with the current standard of care, and raise the funds needed for the development of such new indications.

Even if we were to determine that Triferic is medically and economically viable in new indications, and even if we were able to obtain additional funding to conduct the necessary clinical trials, clinical trials for our products are expensive, may take several years to complete, and their outcomes are uncertain.

Assuming that our research identifies new clinical indications for Triferic that would be both economically and medically feasible, and assuming that we were able to obtain the necessary funding to conduct clinical trials, conducting clinical trials is a lengthy, time-consuming and expensive process.

We would incur substantial expense for both pre-clinical testing and clinical trials with no guarantee that these efforts would either be completed in a timely manner or that they would result in a positive outcome.

Completion of clinical trials may take several years or more.

The length of time can vary substantially with the type, complexity, novelty and intended use of the product.

Factors that can influence and affect the rate of completion of clinical trials include:

the potential delay by a partner in beginning a clinical trial;

the failure of third-party contract research organizations (“CROs”) and other third-party service providers and independent clinical investigators to manage and conduct the trials, to perform their oversight of the trials or to meet expected deadlines;

the inability to recruit clinical trial participants at the expected rate;

the inability to follow patients adequately after treatment;

unforeseen safety issues;

and unforeseen governmental or regulatory issues or concerns, including those of the FDA, DEA and other regulatory agencies.

However, it is possible that clinicians may start to provide patients with oral iron agents, instead of macromolecular IV iron or Triferic.

Significant utilization of oral agents would diminish the commercial opportunity of Triferic within ESKD dialysis patients receiving hemodialysis.

RISKS RELATED TO CLINICAL TRIALS

Clinical drug development involves a lengthy and expensive process with uncertain timelines and uncertain outcomes, and the results of prior preclinical or clinical trials are not necessarily predictive of our future results.

Future FPC pipeline product candidates will be subject to rigorous and extensive clinical trials and extensive regulatory approval processes implemented by the FDA and comparable foreign regulatory authorities before obtaining marketing approval from these regulatory authorities.

The drug development and approval process is lengthy and expensive, and approval is never certain.

Investigational new drugs may not prove to be safe and effective in clinical trials.

We have no direct experience as a company in conducting later stage clinical trials required to obtain regulatory approval in the disease states that we are currently investigating FPC pipeline product candidates in.

We may be unable to conduct clinical trials at preferred sites, enlist clinical investigators, enroll sufficient numbers of participants or begin or successfully complete clinical trials in a timely fashion, if at all.

In addition, the design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced.

We may be unable to design and execute a clinical trial to support regulatory approval.

Even if a current clinical trial is successful, it may be insufficient to demonstrate that our product candidates are safe or effective for registration purposes.

There is a high failure rate for drugs and biologic products proceeding through clinical trials.

Failure can occur at any time during the clinical trial process.

The results of preclinical studies and early clinical trials of FPC pipeline product candidates may not be predictive of the results of later-stage clinical studies or trials and the results of studies or trials in one set of patients or line of treatment may not be predictive of those obtained in another.

In fact, many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late stage clinical trials even after achieving promising results in preclinical studies and earlier stage clinical trials.

In addition, data obtained from preclinical and clinical activities is subject to varying interpretations, which may delay, limit or prevent regulatory approval.

It is impossible to predict when or if our future product candidates will prove effective or safe in humans in the disease states that we will be conducting the clinical trials or that they will receive regulatory approval.

FPC pipeline product candidates may not demonstrate in patients the biochemical and pharmacological properties we anticipate based on laboratory studies or earlier stage clinical trials, and they may interact with human biological systems or other drugs in unforeseen, ineffective or harmful ways.

The number of patients exposed to product candidates and the average exposure time in the clinical development programs may be inadequate to detect rare adverse events or findings that may only be detected once a product candidate is administered to more patients and for greater periods of time.

If we are unable to successfully demonstrate the safety and efficacy of FPC pipeline product candidates in these disease states and are unable to receive the necessary regulatory approvals, our business will be materially harmed.

If we experience delays in clinical testing, our commercial prospects will be adversely affected, our costs may increase and our business may be harmed.

We cannot guarantee that we will be able to initiate and complete clinical trials and successfully accomplish all required regulatory activities or other activities necessary to gain approval and commercialize our future product candidates.

In the future, we may file INDs for any future indications or future product candidates.

If any such future IND is not approved by the FDA, our clinical development timeline may be negatively impacted and any future clinical programs may be delayed or terminated.

As a result, we may be unable to obtain regulatory approvals or successfully commercialize our products.

We do not know whether any other clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all.

Our product development costs will increase if we experience delays in clinical testing.

Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our future product candidates or allow our competitors to bring products to market before we do, which would impair our ability to successfully commercialize our future product candidates and may harm our business, results of operations and prospects.

Our or our future collaborators’ inability to timely complete clinical development could result in additional costs to us as well as impair our ability to generate product revenue, continue development, commercialize our future product candidates, reach sales milestone payments and receive royalties on product sales.

In addition, if we make changes to a product candidate including, for example, a new formulation, we may need to conduct additional nonclinical studies or clinical trials to bridge or demonstrate the comparability of our modified product candidate to earlier versions, which could delay our clinical development plan or marketing approval for our current product candidate and any future product candidates.

If we encounter difficulties in enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

The timely completion of clinical trials largely depends on patient enrollment.

We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our future clinical trials, and even once enrolled, we may be unable to retain a sufficient number of patients to complete any of our trials.

Some of the disease states in which we are investigating FPC, specifically the home setting, present logistical challenges for patient enrollment in clinical trials.

In addition, our competitors, some of whom have significantly greater resources than we do, may conduct clinical trials for the same indications or in the same therapeutic areas and seek to enroll patients in their studies that may otherwise be eligible for

our clinical studies or trials.

Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which could further reduce the number of patients who are available for our clinical trials in these sites.

Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.

Even if we are able to enroll a sufficient number of patients in our clinical studies or trials, delays in patient enrollment may result in increased costs or may affect the timing or outcome of our clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our future product candidates.

FPC may cause undesirable side effects or have other properties in the new disease states we are investigating that could delay or prevent their regulatory approval or limit the commercial profile of an approved label.

Undesirable side effects caused by our future product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities.

Additional clinical studies may be required to evaluate the safety profile of our future product candidates.

Lack of efficacy, adverse events, administration challenges or limitations, or undesirable side effects may emerge in clinical trials conducted by third parties developing treatment candidates in the disease states that we are investigating, which could adversely affect our stock price, our ability to attract additional capital and our development program.

Lack of efficacy, adverse events or undesirable side effects may emerge in clinical trials conducted by third parties developing product candidates like ours.

We have no control over their clinical trials or development program, and lack of efficacy, adverse events or undesirable side effects experienced by subjects in their clinical trials could adversely affect our stock price, our ability to attract additional capital and our clinical development plans for our future product candidates or even the viability of our future product candidates, including by creating a negative perception of FPC pipeline product candidates by healthcare providers or patients.

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or topline data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.

We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

As a result, the topline results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated.

Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

As a result, topline data should be viewed with caution until the final data are available.

From time to time, we may also disclose interim data from our clinical trials.

In addition, we may report interim analyses of only certain endpoints rather than all endpoints.

Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

RISKS RELATED TO REGULATORY APPROVALS

Our FPC pipeline product candidates have not received regulatory approval in the disease state we are investigating.

If we are unable to obtain regulatory approvals to market such product candidates, our business will be adversely affected.

We do not expect our FPC pipeline product candidates to be commercially available for several years, if at all.

Our future product candidates will be subject to strict regulation by regulatory authorities in the United States and in other countries.

We cannot market any product candidate until we have completed all necessary preclinical studies and clinical trials and have obtained the necessary regulatory approvals.

We do not know whether regulatory agencies will grant approval for our future product candidates.

Even if we complete preclinical studies and clinical trials successfully, we may not be able to obtain regulatory approvals or we may not receive approvals to make claims about our products that we believe to be necessary to effectively market our products.

Data obtained from preclinical studies and clinical trials is subject to varying interpretations that could delay, limit or prevent regulatory approval, and failure to comply with regulatory requirements or inadequate manufacturing processes are examples of other problems that could prevent approval.

Even if we are able to obtain regulatory approvals for our future product candidates, if they exhibit harmful side effects after approval, our regulatory approvals could be revoked or otherwise negatively impacted, and we could be subject to costly and damaging product liability claims.

Even if we receive regulatory approval for our FPC pipeline product candidates, we will have tested them in only a small number of patients during our clinical trials.

If our applications for marketing are approved and more patients begin to use our product, new risks and side effects associated with our products may be discovered.

As a result, regulatory authorities may revoke their approvals.

We might have to withdraw or recall our products from the marketplace.

We may also experience a significant drop in the potential sales of our product if and when regulatory approvals for such product are revoked.

As a result, we may experience harm to our reputation in the marketplace or become subject to lawsuits, including class actions.

Any of these results could decrease or prevent any sales of our approved product or substantially increase the costs and expenses of commercializing and marketing our product.

The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable.

Our inability to obtain regulatory approval for our future FPC pipeline product candidates would substantially harm our business.

The time required to obtain approval from the FDA and comparable foreign regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.

In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s development and may vary among jurisdictions.

It is possible that none of our FPC pipeline product candidates will ever obtain regulatory approval.

Our future product candidates could fail to receive regulatory approval from the FDA or comparable foreign regulatory authorities for many reasons.

If we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may grant approval contingent on the performance of costly post-marketing clinical trials or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of the product candidate.

Even if our FPC pipeline product candidates receive regulatory approval, it may still face future development and regulatory difficulties.

Even if we obtained regulatory approval for a product candidate, it would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-market information.

In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP, regulations and standards.

If we or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

If we, our product candidates or the manufacturing facilities for our product candidates fail to comply with applicable regulatory requirements, or undesirable side effects caused by such products are identified, a regulatory agency may:

issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings about such product;

mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

require that we conduct post-marketing studies;

require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;

seek an injunction or impose civil or criminal penalties or monetary fines;

suspend marketing of, withdraw regulatory approval of or recall such product;

suspend any ongoing clinical studies;

refuse to approve pending applications or supplements to applications filed by us;

suspend or impose restrictions on operations, including costly new manufacturing requirements;

or seize or detain products, refuse to permit the import or export of products or require us to initiate a product recall.

The occurrence of any event or penalty described above may inhibit our ability to commercialize our products and generate product revenue.

Even if our FPC pipeline product candidates receive regulatory approval, it may still face future reimbursement challenges.

Reimbursements of a our FPC pipeline product candidates, if approved, is integral to their ability to be a commercial success.

While we have incorporated to the best of our ability factors such as marketing strategy and payer reimbursement into our clinical trial decision making, these decisions must be balanced against the time and resources required to demonstrate a benefit, the increased complexity of development and manufacturing and the potential delays to approval of the lead indication.

While, we try to plan clinical trials appropriately to foresee such challenges, but there is no guarantee that unexpected or unforeseen issues will not arise.

Furthermore, pricing and reimbursement of pharmaceutical products is subject to intense political scrutiny and the reimbursement understandings that we currently have now may be modified or rendered moot by the time the FPC pipeline product candidate could potentially receive regulatory approval.

Such modifications could change the commercial viability of marketing the FPC pipeline product candidate which would have an effect upon the long term growth of Rockwell.

RISKS RELATED TO OUR CONCENTRATE BUSINESS

The ongoing COVID-19 pandemic has resulted in, and may continue to result in significant disruptions to our concentrates business operations, which could have a material adverse effect on our business.

Our business and its operations have been and are expected to continue to be adversely affected by the COVID-19 pandemic.

To date, our manufacturing has been viewed as an essential activity and we have not been required to pause operations based upon executive or similar governmental directives.

However, we have had, and anticipate continuing to have, instances where employees of our manufacturing plants test positive for COVID-19, resulting in a disruption to our manufacturing operations.

These disruptions in our operations have had and could continue to have a negative impact our business, operating results and financial condition.

Furthermore, it is possible that the outbreak of COVID-19 could be significant enough to force us to close the entirety of the manufacturing plant or transportation services for an extended period of time, which could result in a failure to deliver product.

In addition, we may face decreased demand for both our concentrates portfolio if dialysis patients are unable to travel to dialysis clinics or if dialysis patients are found to be disproportionally affected by COVID-19 due to their heightened risk associated with their disease.

We have had an increase in costs associated with COVID-19 including costs associated with hazard pay, costs for PPE and costs for cleaning.

These increased costs have impacted the profitability of our concentrates divisions.

Given the uncertainty surrounding COVID-19, we may continue to incur these additional costs which in turn can have an impact upon our profitability.

The COVID-19 pandemic continues to evolve rapidly.

The ultimate impact of the COVID-19 pandemic or a similar public health emergency is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems, or the global economy as a whole.

We may be required to repay a portion of the upfront fees received from Baxter, which could materially and adversely affect our financial position and cash reserves.

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A Refund Trigger Event includes, among other things, termination due to an uncured material breach by us.

If we are required to make any such payment to Baxter, we may need to reallocate funds from other parts of our business, which could force us to change or delay plans for use of that

If we are required to make any such payment to Baxter, we may need to reallocate funds from other parts of our business, which could force us to change or delay plans for use of that capital.

In any such event, our financial condition, results of operations, and cash reserves could be materially and adversely affected.

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Fresenius has routinely acquired our customers, and it may acquire more of our customers in the future.

In addition to Fresenius, we are aware of other large manufacturers potentially looking to increase their market share of the domestic concentrates market, which, if successful, could have an impact upon Rockwell’s profitability.

We may be affected materially and adversely by increases in raw material and transportation costs.

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Any such termination or refund could have a material adverse effect on our business, results of operations, financial position and cash flows.

Additionally, we have been adversely affected by a general shortage in commercial truckers in the United States.

Additionally, the Second Amendment to our Distribution Agreement with Baxter, established a cap on the percentage amount that we receive in reimbursement for transportation expenses.

This reimbursement cap could result in Rockwell not being able to obtain the full amount of our transportation costs.

We have also been adversely affected by a general shortage in commercial truckers in the United States.

This has negatively impacted our profit margins as we pay higher costs to ship products to our customers.

Continued increases in shipping costs, or the costs of raw materials, could negatively impact our profit margins, as we may be limited in our ability to pass these costs along to our customers.

Continued increases in shipping costs, the costs of raw materials, or increases in transportation costs that are not reimbursed due to the cap on expenses with Baxter could negatively impact our profit margins, as we may be limited in our ability to pass these costs along to our customers.

In addition, one of the most expensive components of our dialysis solutions is pharmacopeia grade salt.

Pharmacopeia grade salt is primarily manufactured domestically by two suppliers.

It was announced in September 2020 that our primary supplier of pharmacopeia, one of our largest suppliers of pharmacopeia grade salt, is merging with the other primary manufacturer of pharmacopeia grade salt which could have an effect of our costs of raw material.

RISKS RELATED TO OUR FINANCIAL POSITION

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Net cash used in operating activities for the year ended December 31, 2020 was approximately $29.6 million.

On March 22, 2019, we entered into a sales agreement with Cantor Fitzgerald & Co.

(the “Agent”), pursuant to which we may offer and sell from time to time up to $40,000,000 of shares of common stock through the Agent.

We are not required to sell any shares at any time during the term of the sales agreement.

Our ability to sell common stock under the sales agreement may be limited by several factors, including, among other things, the trading volume of our common stock and certain black-out periods that we may impose upon the sales agreement, among other things.

On June 20, 2019, we closed a public offering of 5,833,334 shares of common stock at a price of $3.00 per share.

On July 9, 2019, the underwriters of the public offering partially exercised their over-allotment option to purchase an additional 425,800 shares of common stock at a price of $3.00 per share, which closed on July 11, 2019.

On February 6, 2020, we closed a public offering of 3,191,489 shares of common stock at a price of $2.22 per share.

On February 19, 2020, the underwriter of the public offering exercised its over-allotment option to purchase an additional 478,723 shares of common stock at a price of $2.22 per share in full, which closed on February 21, 2020.

On March 16, 2020, Rockwell Medical, Inc.

and Rockwell Transportation, Inc., as Borrowers, entered into a Loan and Security Agreement (the "Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP, as collateral agent and the lenders party thereto to obtain term loans in an amount up to $35.0 million.

$22.5 million was drawn under the Loan Agreement on the date of closing, and the remaining $12.5 million will be available for subsequent draws based on our achievement of certain milestones.

Net proceeds at closing were approximately $21 million after deducting estimated fees and expenses of $1.5 million.

Interest on the loans will accrue either in cash or a combination of cash and in kind interest, at our election.

Cash interest will accrue at a rate equal to the greater of (i) Prime Rate (as defined in the Loan Agreement) and (ii) 4.75% plus 4.00%, for an initial interest rate of 8.75% per annum.

We have the option, under certain circumstances, to add 1.00% of such interest rate amount to the then outstanding principal balance in lieu of paying such amount in cash.

We are entitled to make interest-only payments for thirty months, or up to thirty-six months if certain conditions are met.

The Loan Agreement contains representations and warranties, affirmative and negative covenants, and events of default that are customary for credit facilities of this type.

The term loans will mature on March 16, 2025.

Based on the capital raise and debt financing noted above, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

The Company will require additional capital to sustain its operations and make the investments it needs to execute upon its longer-term business plan, including the commercialization of Dialysate Triferic and I.V.

Triferic, if approved, and executing plans for enhancing its medical capabilities and generating additional data for Triferic.

If the Company is unable to generate sufficient revenue from its existing long-term business plan, the Company will need to obtain additional equity or debt financing.

If the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available on favorable terms, if at all.

During the year ended December 31, 2020, the Company sold 1,128,608 shares of its common stock as part of its sales agreement with Cantor Fitzgerald & Co.

for proceeds of $2.3 million, net of issuance costs.

Approximately $32.3 million remains available for sale under this facility.

See Note 11 for further detail.

In February 2020, the Company raised capital in an underwritten public offering for proceeds of $8 million, net of estimated issuance costs.

In September 2020, the Company sold 23,178,809 shares of its common stock for proceeds of $32.7 million, net of issuance costs (see Note 11 in Part III for further detail).

In March 2020, the Company entered into a Loan and Security Agreement (the "Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP, ("Innovatus") to make certain term loans to the Company in the aggregate principal amount of up to $35.0 million.

Net draw down proceeds at closing were approximately $21 million, net of estimated fees and expenses (See Note 15 in Part III for further detail).

The Loan Agreement, noted above, is secured by all assets of the Company and Rockwell Transportation, Inc.

and contains customary representations and warranties and covenants, subject to customary carve outs, and includes financial covenants related to liquidity and trailing twelve months sales of Triferic, with the latter beginning with the period ending

December 31, 2020.

We cannot assure you that we can maintain compliance with the covenants under our Loan Agreement, which may result in an event of default.

Our ability to comply with these covenants may be adversely affected by events beyond our control.

For example, the Loan Agreement contains certain financial covenants relating to sales and, as a result of the ongoing COVID-19 pandemic and its effect on our sales activities, among other factors, we were not be able to satisfy such covenants as of December 31, 2020.

As such, the Company utilized the cure options which were accepted by Innovatus to regain compliance.

As of December 31, 2020, the Company was in compliance with all reporting and financial covenants.

Based on the equity offerings and Loan Agreement described above, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report.

Our ability to fund our activities in the long term will be dependent upon our ability to successfully execute on the development of the FPC platform in new indications and our ability to successfully commercialize and increase adoption of Triferic (dialysate) and Triferic AVNU.

Both of these factors are subject to significant risks and uncertainties and there can be no assurance that we will be successful in achieving approval of FPC in new indications or that we will successfully expanding our Triferic franchise.

If our planned clinical program is delayed or experiences failures, or if our commercialization of Triferic fails to achieve targeted levels of success, we may be forced to implement cost-saving measures that may potentially have a negative impact on our activities and we may have increased difficulty raising capital to fund our operations.

If we are unable to raise required capital, we may be forced to curtail our activities and, ultimately, cease operations.

Even if we are able to raise sufficient capital, such financings may only be available on unattractive terms, or result in significant dilution of stockholders’ interests and, in such event, the market price of our common stock may decline.

Our Loan Agreement with Innovatus contains certain covenants that could adversely affect our operations and, if an event of default were to occur, we could be forced to repay the outstanding indebtedness sooner than planned and possibly at a time when we do not have sufficient capital to meet this obligation.

The occurrence of any of these events could cause a significant adverse impact on our business, prospects and share price.

Pursuant to the Loan Agreement, we have pledged substantially all of our assets and the assets of our subsidiary, Rockwell Transportation, Inc., and have agreed that we may not sell or assign rights to our patents and other intellectual property without the prior consent of Innovatus.

Additionally, the Loan Agreement contains affirmative, including financial covenants related to liquidity and trailing twelve months sales of Triferic, and negative covenants that, among other things, restrict our ability to:

• incur additional indebtedness;

• grant liens;

• make distributions, including dividends;

• enter into a merger or consolidation;

• alter the business of the Company;

• sell all or a portion of the Company’s property, business or assets.

These terms of the Loan Agreement could prevent us from taking certain actions without the consent of our lenders, which may limit our flexibility in operating our business and our ability to take actions that might be advantageous to us and our stockholders, placing us at a competitive disadvantage compared to our competitors who have less leverage and who therefore may be able to take advantage of opportunities that our leverage prevents us from exploiting.

These covenants could also limit our ability to make needed capital expenditures or otherwise conduct necessary or desirable business activities.

We cannot assure you that we can maintain compliance with the covenants under our Loan Agreement, which may result in an event of default.

Our ability to comply with these covenants may be adversely affected by events beyond our control.

For example, the Loan Agreement contains certain financial covenants relating to sales and, as a result of the ongoing COVID-19 pandemic and its effect on our sales activities, among other factors, we may not be able to satisfy such covenants in the future.

Based on our Triferic sales, we were not able satisfy this covenant as of December 31, 2020.

As such, the Company utilized the cure options which were accepted by Innovatus to regain compliance.

The Loan Agreement also includes customary events of default, including, among other things, a change of control or a failure to comply with certain of the covenants in the Loan Agreement.

Upon the occurrence and continuation of an event of default, all amounts due under the Loan Agreement become (in the case of a bankruptcy event), or may become (in the case of all other events of default and at the option of Innovatus), immediately due and payable.

If an event of default under the Loan Agreement should occur, we could be required to immediately repay the outstanding indebtedness.

If we are unable to repay this debt, the lenders would be able to foreclose on the secured collateral,

including our cash accounts, and take other remedies permitted under the Loan Agreement.

Even if we are able to repay the indebtedness on an event of default, the repayment of these sums may significantly reduce our working capital and impair our ability to operate as planned.

The occurrence of any of these events could cause a significant adverse impact on our business and financial condition.

Our existing capital resources may not be adequate to finance our operating cash requirements for the length of time that we have estimated and additional capital that we may need to operate or expand our business may not be available.

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These factors include, but are not limited to:

the timing and expenditures associated with the commercialization of Dialysate Triferic and the timing and magnitude of cash received from product sales;

• the timing and expenditures associated with the commercialization of Triferic (dialysate) and Triferic AVNU and the timing and magnitude of cash received from product sales;

• the timing and expenditures associated with the build-up of inventory;

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If our development activities require substantial cash resources in the future in excess of our liquid resources on hand and if our cash flows are not sufficient to support financing through unsecured indebtedness, we may not be able to obtain debt financing and our capital financing options may become limited.

Regardless of whether we seek to raise additional working capital through the sale of equity securities or the incurrence of indebtedness, if we do not have sufficient funds available to successfully commercialize Dialysate Triferic, conduct planned clinical studies and pursue business opportunities, our business, results of operations, financial position and cash flows could be materially adversely affected.

Our drug and concentrate businesses are highly regulated, resulting in additional expense and risk of noncompliance that can materially and adversely affect our business, results of operations, financial position and cash flows.

Our businesses are highly regulated.

The testing, manufacture and sale of the products we manufacture directly or through third party CMOs are subject to extensive regulation by the FDA and by other federal, state and foreign authorities.

Before drug product candidates or medical devices, such as our concentrate products, can be commercially marketed in the United States, the FDA must give either premarket approval or 510(k) clearance.

After a product is approved, regulatory authorities may impose significant restrictions on a product’s indicated uses or marketing or requirements for potentially costly post-marketing studies.

Our drug products are subject to ongoing regulatory requirements for labeling, packaging, storage, advertising, promotion, sampling, record- keeping and reporting of safety and other post-market information.

In addition, manufacturers and their facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to current cGMP and applicable state laws.

As such, we and our CMOs are subject to continual review and periodic inspections to assess compliance with cGMP and state laws.

Accordingly, we and our partners must continue to expend time, money and effort in all areas to achieve and maintain regulatory compliance.

We are also required to report certain adverse reactions and production problems, if any, to applicable regulatory authorities and to comply with requirements concerning advertising and promotion for our drug products or product candidates.

If non-compliant inventory is sold or if a regulatory agency determines that we are not compliant with any applicable regulatory requirements, we may be subject to warnings from, or enforcement action by, state and federal government authorities, which may include penalties, fines, injunctions, recall or seizure of products, suspension of production, denial of future regulatory approvals, withdrawal or suspension of existing regulatory approvals, operating restrictions, injunctions and criminal prosecution.

If regulatory sanctions are applied, the value of our Company and our operating results could be materially and adversely affected.

Our business could also be adversely affected by delays in obtaining necessary regulatory approvals and any restrictions placed by the FDA on our intended marketing or the use of our drug products.

Our failure to comply with applicable regulations could also result in product liability litigation against us.

In addition, our failure to comply with applicable regulations with respect to our concentrate products could constitute a breach by us of the Distribution Agreement, providing Baxter with various remedies that would be material and adverse to us.

Moreover, changes in applicable regulatory requirements could significantly increase the costs of our operations, which, if such higher costs result in price increases that exceed the thresholds specified in the Distribution Agreement, could give Baxter the right to terminate the Distribution Agreement and obtain a partial refund of certain fees paid to us.

Regardless of whether we seek to raise additional working capital through the sale of equity securities or the incurrence of indebtedness, if we do not have sufficient funds available to successfully commercialize Triferic in dialysis, conduct planned clinical studies and pursue business opportunities, our business, results of operations, financial position and cash flows could be materially adversely affected.

Our business could be impacted as a result of actions by activist shareholders, including as a result of a potential proxy contest for the election of directors at our annual meeting.

The Company was subjected to a proxy contest at the 2017 Annual Meeting of Shareholders, which resulted in the negotiation of changes to the Board and substantial costs were incurred.

The Company was subjected to a proxy contest at the 2017 Annual Meeting of Shareholders, which resulted in the negotiation of changes to the Board and the incurrence of substantial costs.

A future proxy contest would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and the Board.

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We are highly dependent on the product development, clinical and business development expertise of the principal members of our management, scientific and clinical team.

Although we have entered into employment agreements with our

executives and key employees, each of them may terminate their employment with us at any time.

Although we have entered into employment agreements with our executives and key employees, each of them may terminate their employment with us at any time.

We do not maintain “key person” insurance for any of our executives or other employees.

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Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.

We hired a new Chief Executive Officer and Chief Financial Officer in 2018 and have hired additional executive-level employees who are leading the commercialization of Dialysate Triferic.

We hired a new Chief Executive Officer and Chief Financial Officer in 2020 and have hired additional executive-level employees who are leading the commercialization of Triferic.

This leadership transition may be difficult to manage and may cause operational and administrative inefficiencies, added costs, decreased productivity among our employees, and loss of personnel with deep institutional knowledge, which could result in significant disruptions to our operations.

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If we are unable to mitigate these or other similar risks, our businesses, results of operations, and financial condition may be adversely affected.

We expect to continue to expand our sales and marketing function, as well as our corporate operations, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

During the fourth quarter of 2018 and throughout 2019, we assembled sales and marketing leadership and a field-based sales team to support the commercialization of Dialysate Triferic in the United States.

To manage this growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.

Due to our limited financial resources, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.

The expansion of our operations may lead to significant costs and may divert our management and business development resources.

Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

We could be found to be infringing intellectual property rights of third parties, which could prevent us from selling products and could require us to pay significant damages and compel us to defend against litigation.

It is possible that we may infringe on intellectual property rights of others without being aware of the infringement.

If a third party believes that one of our drug products or product candidates infringes on the third party’s patent, it may sue us even if we have received our own patent protection for the technology.

If we infringe the rights of a third party, we could be prevented from manufacturing and selling products, forced to pay damages, compelled to license technology from the party claiming infringement and lose the opportunity to license our technology to others and collect royalty payments, any of which could have a material adverse effect on our business.

If Baxter is prevented from selling any of our concentrate or ancillary products due to a patent infringement or if its ability to sell any of our concentrate or ancillary products due to a patent infringement is materially and adversely affected, Baxter may be entitled to terminate our Distribution Agreement and obtain a refund of a portion of the upfront fee and facility fee.

As is common in the biotechnology and pharmaceutical industry, we engage the services of consultants to assist us in the development of our drug products and product candidates.

Many of these consultants were previously employed at, may have previously been, or are currently providing consulting services to, other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

As such, the Company advises consultants not to disclose, or use trade secrets, or proprietary information of their former employers or their former or current customers.

Although no claims against us are currently pending, we may be subject to claims that these consultants or we have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers or their former or current customers.

Litigation may be necessary to

defend against these claims.

Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and day-to-day business operations.

Our drug products and product candidates may have undesirable side effects and our product liability insurance may not be sufficient to protect us from material liability or harm to our business.

If concerns are raised regarding the safety of a product candidate as a result of undesirable side effects identified during clinical testing, the FDA may decline to approve the product candidate at the end of the NDA review period or issue a letter requesting additional data or information prior to making a final decision regarding whether or not to approve the product candidate.

Following FDA approval, if we or others later identify previously unknown undesirable side effects caused by our product candidate or concentrate products, if known side effects are more frequent or severe than in the past, or if we or others detect unexpected safety signals for such products or any products perceived to be similar to such products, the FDA or other applicable regulatory authorities may require the addition of unfavorable labeling statements, specific warnings or contraindications, may suspend or withdraw their approval of the product, may require it to be removed from the market or may impose restrictions on the distribution or use of the product.

Such side effects may also result in litigation against us by private litigants.

We maintain product liability insurance.

We cannot be sure that such insurance would be sufficient to protect us against liabilities associated with any of these events in view of our expanding business or that such insurance will remain available at economical levels.

We may have significant legal expenses that are not covered by insurance.

In addition, our reputation could be damaged by such sanctions or product liability litigation and that could harm our business reputation and marketing ability.

Any such sanctions or litigation could also hurt our ability to retain product liability insurance or make such insurance more expensive.

In any such event, our business, results of operations, financial position and cash flows could be materially adversely affected.

We may be subject to claims that our employees or directors have wrongfully used or disclosed alleged trade secrets of their former employers.

Many of our employees and certain of our directors were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our employees and directors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees or directors have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s or director’s former employer.

Litigation may be necessary to defend against these claims.

If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.

Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

Our business and operations would suffer in the event of a security breach, system failure, invasion, corruption, destruction or interruption of our or our business partners’ critical information technology systems or infrastructure.

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We are and may become the target of additional securities and shareholder litigation, which is costly and time-consuming to defend.

In addition to the purported class action, shareholder derivative action and SEC investigation filed against us as described in Note 15 “Commitments and Contingencies” in the accompanying consolidated financial statements for the year ended December 31, 2019, it is possible that other legal proceedings could be brought against us in the future.

In addition to proceedings described in Note 14 “Commitments and Contingencies” in the accompanying consolidated financial statements for the year ended December 31, 2020, it is possible that other legal proceedings could be brought against us in the future.

The results of complex legal proceedings are difficult to predict.

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

A severe storm in our locations or those of our suppliers, or prolonged economic downturn, such as the recent global financial crisis, could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all.

A severe weather or other geological event in our locations or those of our suppliers, or prolonged economic downturn, such as the recent global financial crisis, could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all.

This is particularly true in Europe, where the Brexit has created additional economic uncertainty.

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Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

RISKS RELATED TO LEGAL AND REGULATORY