What changed in this filing

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Item 9A. Controls and Procedures

2024-02-20 compared with 2023-02-23 · 527 added, 387 removed, 1248 unchanged (42% of the section changed)

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As required by Rule 13a-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a–15(e) and 15d-15(e)), as of the end of the year covered by this report.

Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weakness in internal control over financial reporting described below.

Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

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Management has used the framework set forth in the report entitled Internal Control-Integrated Framework (2013 framework) published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting.

Based on this assessment, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 2022 due to the following material weakness:

We did not design effective controls and procedures to evaluate the accounting for a certain pre-launch inventory contract affecting the timing of recognition of research and development expense.

BDO USA, LLP, our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting as of December 31, 2022, which is included herein.

As a result of the material weakness described above, such report includes an adverse audit report on the effectiveness of internal control over financial reporting as of December 31, 2022.

The material weakness described above did not result in a restatement of previously issued annual consolidated financial statements or condensed interim consolidated financial statements.

Management is actively engaged in the planning for, and implementation of, remediation efforts to address the material weakness.

The remediation plan includes adding controls to ensure timely accounting evaluation of research and development expense recognition of certain pre-launch inventory.

The remediation actions will be monitored by the Audit Committee of our Board of Directors.

The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Based on this assessment, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was effective as of December 31, 2023.

Ernst & Young LLP ("EY"), our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting as of December 31, 2023, which is included herein.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

An evaluation was also performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of any change to our internal control over financial reporting that occurred during the fourth quarter of 2023 and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

As disclosed in Part II, Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December 31, 2022 due to the following material weakness:

We did not design effective controls and procedures to evaluate the accounting for a certain pre-launch inventory contract affecting the timing of recognition of research and development expense.

Such material weakness did not result in a restatement of previously issued annual consolidated financial statements or interim consolidated financial statements.

The material weakness has been fully remediated as of December 31, 2023 and as of the date of this report.

Other than the aforementioned material weakness remediation, there have not been any changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Travere Therapeutics, Inc.

San Diego, California

To the Stockholders and the Board of Directors of Travere Therapeutics, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Travere Therapeutics, Inc.

(the “Company’s”) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria .

We do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s assessment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as “the financial statements”) and our report dated February 23, 2023 expressed an unqualified opinion thereon.

and subsidiaries’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Travere Therapeutics, Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the year ended December 31, 2023, and the related notes and our report dated February 20, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

A material weakness regarding management’s failure to design and maintain effective controls over the accounting for the timing of recognition of research and development expense for certain pre-launch inventory, has been identified and described in management’s assessment.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2022 consolidated financial statements, and this report does not affect our report dated February 23, 2023 on those consolidated financial statements.

Definition and Limitations of Internal Control over Financial Reporting

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, LLP

/s/ Ernst & Young LLP

San Diego, California

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OTHER INFORMATION

Trading Arrangements

None of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended December 31, 2023.

There are no other items required to be disclosed.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Our Board of Directors consists of the following members:

Baynes, M.D., Ph.D., has served as a director of the Company since June 2016.

Baynes, M.D., Ph.D.

has served as a director of the Company since June 2016.

Since July 2022, Dr.

Baynes has served as Executive Vice President and Chief Medical Officer of Eikon Therapeutics, Inc., a privately-held biotechnology company.

Prior to Eikon Therapeutics, Inc.

he served as Senior Vice President and Head of Global Clinical Development at Merck Research Laboratories, the research division of Merck and Co., Inc., since December 2013 and as Chief Medical Officer of Merck and Co, Inc., a global healthcare company, since July 2016.

Prior to Eikon Therapeutics, Inc., until April 2022 he served as Senior Vice President and Head of Global Clinical Development at Merck Research Laboratories, the research division of Merck and Co., Inc., commencing in December 2013 and as Chief Medical Officer of Merck and Co, Inc., a global healthcare company, commencing in July 2016.

Prior to his roles at Merck, Dr.

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Prior to Gilead, Dr.

Baynes held positions of increasing responsibility at Amgen Inc., a biotechnology company, from August 2002 to January 2012, including Vice President of Global Clinical Development and Therapeutic Area Head for Hematology/Oncology.

Baynes held positions of increasing responsibility at Amgen Inc., a biotechnology company, including Vice President of Global Clinical Development and Therapeutic Area Head for Hematology/Oncology.

Before joining Amgen, Dr.

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Baynes has authored more than 150 publications and is a member or fellow of several international medical societies.

Baynes is on the Board of Directors of Natera, Inc., a genetic testing and diagnostics company, and previously served on the Board of Directors of Atara Biotherapeutics, Inc., a T-cell immunotherapy company.

Baynes currently serves on the Board of Directors of Natera, Inc., a genetic testing and diagnostics company, and on the Board of Directors of CatalYm GmbH, a privately-held Germany based biotechnology company.

Previously he served on the Board of Directors of Atara Biotherapeutics, Inc., a T-cell immunotherapy company.

Baynes received his medical degree and doctorate in philosophy from the University of the Witwatersrand in South Africa, and completed his medical training in the Department of Hematology and Oncology at Johannesburg Hospital.

Suzanne Bruhn, Ph.D., has served as a director of the Company since April 2020.

Since May 2019, Dr.

Bruhn has served as the President and Chief Executive Officer of Tiaki Therapeutics Inc., a biotechnology company.

Suzanne Bruhn, Ph.D.

has served as a director of the Company since April 2020.

Since November 2023, Dr.

Bruhn has served as Chief Executive Officer of The Charcot-Marie-Tooth Association (CMTA), a nonprofit organization dedicated to finding a cure for CMT, a rare, debilitating peripheral neuropathy.

Previously, from May 2019 to Decem ber 2023, Dr.

Bruhn served as the President and Chief Executive Officer of Tiaki Therapeutics Inc., a biotechnology company.

Bruhn served as President and Chief Executive Officer of Proclara Biosciences, Inc., a biotechnology company, from April 2017 to September 2018, and as President and Chief Executive Officer of Promedior, Inc., a biotechnology company, from May 2012 to November 2015.

Currently, Dr.

Bruhn serves on the Boards of Directors of Pliant Therapeutics, Inc., Vigil Neuroscience, Inc., and Mind Medicine (MindMed) Inc.

Bruhn serves on the Boards of Directors of Pliant Therapeutics, Inc., Vigil Neuroscience, Inc., and Mind Medicine Inc.

Previously, Dr.

Bruhn served as a member of the Board of Directors of Raptor Pharmaceuticals Corp., a pharmaceutical company, from April 2011 until it was acquired by Horizon Pharma plc in October 2016, as a member of the Board of Directors of Novelion Therapeutics, Inc., a biopharmaceutical company, from October 2017 to January 2020, as a member of the Board of Directors of Aeglea BioTherapeutics, Inc., a clinical stage biotechnology company, from February 2017 to August 2020, and on the Board of Directors of Avalo Therapeutics, Inc.

(formerly Cerecor, Inc.), a biopharmaceutical company focused on the development of therapies within the fields of rare pediatric and orphan diseases from April 2020 to November 2021.

(formerly Cerecor, Inc.), a biopharmaceutical company from April 2020 to November 2021.

Earlier in her career Dr.

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Timothy Coughlin has served as a director of the Company since March 2015.

Coughlin is the former Chief Financial Officer of Neurocrine Biosciences, Inc.

("Neurocrine"), a biopharmaceutical company that received FDA approval for INGREZZA® (valbenazine) and ORILISSA® (elagolix), both of which were discovered and developed during his tenure at Neurocrine from 2002 to 2018.

Coughlin is the former Chief Financial Officer of Neurocrine Biosciences, Inc., a biopharmaceutical company that received FDA approval for INGREZZA® (valbenazine) and ORILISSA® (elagolix), both of which were discovered and developed during his tenure at Neurocrine from 2002 to 2018.

Coughlin currently serves on the board of directors of Fate Therapeutics, Inc., and aTyr Pharma, Inc., both biotechnology companies, and previously served on the Board of Directors of Peloton Therapeutics, Inc.

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Prior to joining Neurocrine, he was with Catholic Health Initiatives, a nationwide integrated healthcare delivery system, where he served as Vice President, Financial Services.

Coughlin also served as a Senior Manager in the Health Sciences practice of Ernst & Young LLP and its predecessors from 1989 to 1999.

Earlier in his career Mr.

Coughlin served as a Senior Manager in the Health Sciences practice of Ernst & Young LLP and its predecessors.

Coughlin holds a master's degree in international business from San Diego State University and a bachelor’s degree in accounting from Temple University.

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Dube held positions of increasing responsibility at GSK including senior leadership roles in Strategy, Planning & Operations, Oncology, Managed Markets and Marketing.

Dube currently serves on the Board of Directors for the Biotechnology Innovation Organization (BIO), and for Reneo Pharmaceuticals, Inc., a clinical stage pharmaceutical company focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases.

Dube currently serves on the Board of Directors for the Biotechnology Innovation Organization (BIO), and for Reneo Pharmaceuticals, Inc., a clinical stage pharmaceutical company

focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases.

Previously, Dr.

on the Board of Trustees for AIDS United, and on the Board of Directors for Biocom California.

Dube served on the Board of Trustees for AIDS United, and on the Board of Directors for Biocom California.

Dube holds a B.S.

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Previously, Mr.

Lyons was the founding President and Chief Executive Officer of Neurocrine Biosciences from 1993 to 2008 and remains a member of its Board of Directors.

Lyons was the founding President and Chief Executive Officer of Neurocrine Biosciences, Inc.

and he remains a member of its Board of Directors.

Prior to joining Neurocrine, Mr.

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Lyons currently serves on the Board of Directors of Rigel Pharmaceuticals, Inc., a biotechnology company focused on developing drugs for the treatment of inflammatory/autoimmune and metabolic diseases.

Eledon Pharmaceuticals, Inc.

(formerly Novus Therapeutics, Inc.), a company focused on therapeutics for immune disorders;

and Fresh Tracks Therapeutics, Inc.

(formerly known as Brickell Biotech, Inc.), a clinical-stage pharmaceutical company focused on developing prescription therapeutics for the treatment of autoimmune, inflammatory, and other debilitating diseases.

Previously, Mr.

Lyons served on the Board of Directors of Eledon Pharmaceuticals, Inc.

(formerly Novus Therapeutics, Inc.), from May 2017 to June 2023, and on the Board of Directors of Fresh Tracks Therapeutics, Inc.

(formerly known as Brickell Biotech, Inc.) from August 2019 to September 2023.

Lyons is also a Senior Advisor for HealthCare Royalty Partners.

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(merged with Sanofi-Aventis) and Schering-Plough Corporation (merged with Merck).

Orwin currently serves as a member of the Board of Directors of Seagen Inc., a biotechnology company, and as the Chair of the Board of Directors of the privately-held biotechnology company CARGO Therapeutics (formerly Syncopation Life Sciences).

Previously he served as a member of the board of directors of Relypsa and Affymax, served on the board of directors of NeurogesX, Inc., and on the board of directors of Array BioPharma Inc.

Orwin currently serves as the Chair of the Board of Directors of CARGO Therapeutics (formerly Syncopation Life Sciences), a biotechnology company, and as the Chair of the Board of Directors for AnaptysBio, Inc., a clinical-stage biotechnology company, and as the Chair of the Board of Directors of the privately held company Nested Therapeutics which is focused on precision oncology medicine.

Previously, Mr.

Orwin served as a member of the Board of Directors of Seagen Inc.

from January 2014 to December 2023, the board of directors of NeurogesX, Inc., and on the board of directors of Array BioPharma Inc.

from November 2012 until its acquisition by Pfizer in July of 2019.

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Since July 2020, Ms.

Poole has served as the Chief Operating Officer of Mythic Therapeutics, an early-stage biotechnology company focused on the development of novel antibody-drug conjugates (ADCs) for cancer therapy.

Poole has served as the Chief Operating Officer of Mythic Therapeutics, a clinical stage biotechnology company focused on the development of novel antibody-drug conjugates (ADCs) for cancer therapy.

Prior to Mythic, Ms.

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Poole served as managing director of S.E.P.

Life Sciences Consulting LLL (formerly S.

Life Sciences Consulting LLC (formerly S.

Poole Consulting LLC), a biopharmaceutical consulting company.

Before joining ImmunoGen, Ms.

Poole spent more than 15 years in global operations, manufacturing and development leadership positions at Genzyme (now Sanofi Genzyme).

Poole spent more than 15 years in CMC product development and manufacturing leadership positions at Genzyme (now Sanofi), ultimately becoming SVP of Biologics Manufacturing, overseeing global manufacturing of six commercial products across five manufacturing sites in the US and EU.

Previously, Ms.

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Ron Squarer has served as a director of the Company since April 2017.

Since March 2020, Mr.

Squarer has served as Chair of the Board of Directors of ADC Therapeutics SA, a clinical stage biopharmaceutical company, and since December 2019, has served for the Board of Directors of Deciphera Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company.

Since June 2023, Mr.

Squarer has served as Chair of the Board of Directors of Deciphera Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, where he has served as a Director since December 2019.

Squarer has also served as Chair of the Board of Directors of ADC Therapeutics SA, a commercial-stage biopharmaceutical

company, since March 2020.

Squarer has extensive commercial, development and executive leadership expertise from a greater than 25-year career in the pharmaceutical industry.

Previously, Mr.

Squarer served as the Chief Executive Officer and a member of the Board of Directors of Array BioPharma, Inc., an oncology focused biopharmaceutical company from April 2012 to July

2019, when Array BioPharma, Inc.

Squarer served as the Chief Executive Officer and a member of the Board of Directors of Array BioPharma, Inc., an oncology focused biopharmaceutical company from April 2012 to July 2019, when Array BioPharma, Inc.

was acquired by Pfizer, Inc.

at a total enterprise value of approximately $11.4 billion.

at an enterprise value of approximately $11.4 billion.

Prior to this, Mr.

Squarer held positions of increasing responsibility with Hospira Inc., a global pharmaceutical and medical device company, most recently serving as Senior Vice President, Chief Commercial Officer, where he was responsible for delivering $4 billion in annual revenue and leading more than 2,000 employees worldwide.

Squarer held positions of increasing responsibility with Hospira Inc., a global pharmaceutical and medical device company, including serving as Senior Vice President, Chief Commercial Officer, where he was responsible for delivering $4 billion in annual revenue and leading more than 2,000 employees worldwide.

Squarer joined Hospira from Mayne Pharma, an oncology-focused, global pharmaceutical company, where he served as Senior Vice President, Global Corporate and Business Development when Mayne was sold to Hospira for $2 billion in 2007.

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Ruth Williams-Brinkley has served as a director of the Company since September 2021.

Since June 2020, Ms.

Williams-Brinkley has served as President of the Kaiser Foundation Health Plan of the Mid-Atlantic States, overseeing all of Kaiser Permanente’s care delivery and health plan operations in Washington, D.C., suburban Maryland, Baltimore, and Northern Virginia.

In January 2024, Ms.

Williams-Brinkley retired as President of the Kaiser Foundation Health Plan of the Mid-Atlantic States, where she led all of Kaiser Permanente’s care delivery and health plan operations in Washington, D.C., suburban Maryland, Baltimore, and Northern Virginia since June 2020.

She joined Kaiser Permanente in 2017 as President of Kaiser Foundation Health Plan and Hospitals of the Northwest, in Portland, Oregon.

Prior to joining Kaiser, Ms.

Williams-Brinkley served as CEO of KentuckyOne Health, Kentucky’s largest integrated health system from 2011 to 2017, as President and CEO of Carondelet Health Network in Tucson, Arizona, an affiliate of Ascension Health, from 2008 to 2011 and as President and CEO of Memorial Health Care System of Chattanooga, Tennessee, an affiliate of Catholic Health Initiatives, from 2002 to 2008.

Williams-Brinkley served as CEO of KentuckyOne Health, an affiliate of CommonSpirit Health, from 2011 to 2017, as President and CEO of Carondelet Health Network in Tucson, Arizona, an affiliate of Ascension Health, from 2008 to 2011, and as President and CEO of Memorial Health Care System of Chattanooga, Tennessee, an affiliate of CommonSpirit Health, from 2002 to 2008.

Currently Ms.

Williams-Brinkley serves on the Board of Directors of University of Phoenix, and on the not for profit Boards of DePaul University in Chicago, Illinois, Connected DMV, United Way of the National Capital Area, and the Leverage Network which is an organization dedicated to promoting the advancement of Black executives on board and in senior leadership roles in all sectors of the healthcare industry.

Williams-Brinkley serves on the Board of Directors of Natera, Inc., on the Board of Trustees of the University of Phoenix, and on the not for profit Boards of DePaul University in Chicago, Illinois, and Allina Health.

Previously, she served as a member of the Board of Directors of Results Physiotherapy, a private care delivery company until it was acquired by Upstream Rehabilitation in 2021, and Chattem, Inc.

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Williams-Brinkley received her B.S.

and Master’s of Science in Nursing from DePaul University and is a Fellow of the American College of Healthcare Executives.

and Master of Science in Nursing from DePaul University and is a Life Fellow of the American College of Healthcare Executives.

In addition to Dr.

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Previously, Dr.

Inrig served as Global Head of the Renal Center of Excellence at IQVIA, a global provider of analytics, technology solutions, and clinical research services to the life sciences industry, from September 2017 to December 2021, where she helped develop the design, execution and strategy of clinical trials leading to U.S.

Food and Drug Administration (FDA) and European Medicines Agency (EMA) approvals in autosomal dominant polycystic kidney disease (ADPKD), and diabetic kidney disease.

From August 2012 to March 2015 Dr.

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From 2001 to 2012, Ms.

Reed led the legal function at Anadys Pharmaceuticals, Inc., a publicly traded biopharmaceutical company, including serving as Senior Vice President, Legal Affairs, General Counsel and Corporate Secretary until Anadys’ acquisition by Roche.

Reed led the legal function at Anadys Pharmaceuticals, Inc., a publicly traded biopharmaceutical company, including

serving as Senior Vice President, Legal Affairs, General Counsel and Corporate Secretary until Anadys’ acquisition by Roche.

Prior to Anadys, Ms.

Reed was an attorney with the law firms Cooley LLP and Brobeck, Phleger & Harrison LLP.

Reed is a member of the State Bar of California and

received her B.S.

Reed is a member of the State Bar of California and received her B.S.

in Business Administration from the Haas School of Business at the University of California, Berkeley and holds a J.D., cum laude, from Harvard Law School.

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(incorporated by reference to Exhibit 1.1 to the Company's Annual Report on Form 10-K filed with the SEC on February 24, 2020).

2.1+ Asset Purchase Agreement dated January 10, 2015 by and between the Company and Asklepion Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 11, 2015).

2.2+ Asset Purchase Agreement dated as of June 9, 2016 between the Company and Asklepion Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 5, 2016).

2.1∞ Asset Purchase Agreement , dated January 10, 2015 , by and between the Company and Asklepion Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 3, 2023).

2.2* Stock Purchase Agreement, dated October 21, 2020, by and among the Company, Orphan Technologies Limited and Citco Trustees (Cayman) Limited acting solely in its capacity as the sole trustee of The Fuhrer Family Trust (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 18, 2020).

2.3↡∞ Asset Purchase Agreement, dated July 16, 2023, by and between Mirum Therapeutics, Inc.

and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 17, 2023).

3.1 Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to Amendment No.

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Bank Trust Company, National Association, as Trustee (including the form of 2.25% Convertible Senior Note due 2029) (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed with the SEC on March 11, 2022).

4.6 Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 1, 2023).

10.1 Form of Indemnity Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 1, 2018).

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Dube (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 26, 2019).

10.3† Employment Agreement, dated March 2, 2015, by and between the Company and Laura M.

Clague (incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 11, 2015).

10.4† Amendment to Employment Agreement, entered into as of April 11, 2017 and modifies the Employment Agreement dated March 2, 2015, by and between the Company and Laura M.

Clague (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2017).

10.5† Retirement and Transition Agreement dated April 19, 2022, between the Company and Laura Clague (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on April 20, 2022).

10.3† Employment Agreement, effective September 1, 2022, between the Company and Christopher Cline (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K/A, filed with the SEC on August 17, 2022).

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10.6† Employment Agreement, dated October 1, 2019, by and between the Company and Peter Heerma (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2020).

10.10† Non-Employee Director Compensation Program, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2022).

10.7† Employment Agreement, effective January 1, 2022, between the Company and Jula Inrig, M.D .

(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 4 , 202 3).

10.8† Non-Employee Director Compensation Program, as amended .

10.9† The Company’s 202 3 Executive Officer Annual Bonus Plan (incorporated by reference to Exhibit 10.1 2 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 2 3 , 202 3 ).

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5 to Sublicense Agreement dated as of March 20, 2018, between the Company and Ligand Pharmaceuticals Incorporated (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 1, 2018).

10.27 International Rights Purchase Agreement, dated as of March 26, 2014, by and between Manchester Pharmaceuticals LLC and Retrophin Therapeutics International, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 31, 2014).

10.28 Trademark License and Supply Agreement, dated May 29, 2014, by and between the Company and Mission Pharmacal Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 4, 2014).

10.25∞ Trademark License and Supply Agreement, dated May 29, 2014, by and between the Company and Mission Pharmacal Company.

10.26 First Amendment to Trademark License and Supply Agreement, effective as of July 28, 2014, by and between Mission Pharmacal Company and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 29, 2014).

10.27 Addendum to Trademark License and Supply Agreement, dated October 19, 2015, by and between to Company and Mission Pharmacal (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 6, 2015).

10.31+ Third Amendment to Trademark License and Supply Agreement dated as of March 17, 2016, between the Company and Mission Pharmacal.

(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2016).

10.32+ Amendment One to the Third Amendment to Trademark License and Supply Agreement, dated September 12, 2016, by and between the Company and Mission Pharmacal Company (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 4, 2016).

10.33+ Amendment Two to the Third Amendment to Trademark License and Supply Agreement, dated November 3, 2017, by and between the Company and Mission Pharmacal Company (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 27, 2018).

10.28∞ Third Amendment to Trademark License and Supply Agreement dated as of March 17, 2016, between the Company and Mission Pharmacal Company.

10.29∞ Amendment One to the Third Amendment to Trademark License and Supply Agreement, dated September 12, 2016, by and between the Company and Mission Pharmacal Company.

10.30∞ Amendment Two to the Third Amendment to Trademark License and Supply Agreement, dated November 3, 2017, by and between the Company and Mission Pharmacal Company.

10.31 Fourth Amendment to Trademark License and Supply Agreement dated as of November 28, 2018, between the Company and Mission Pharmacal (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 26, 2019).

10.35+ Fifth Amendment to Trademark License and Supply Agreement dated as of September 30, 2020, between the Company and Mission Pharmacal Company (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 5, 2020).

10.32∞ Fifth Amendment to Trademark License and Supply Agreement dated as of September 30, 2020, between the Company and Mission Pharmacal Company .

10.33↡* Master Manufacturing Supply Agreement, dated September 30, 2020, between the Company and STA Pharmaceutical Hong Kong Limited, a subsidiary of WuXi AppTec (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on November 5, 2020).

10.37↡* First Amendment to Master Manufacturing Supply Agreement, effective as of November 14, 2022, between the Company and STA Pharmaceutical Hong Kong Limited, a subsidiary of WuXi AppTec.

10.34↡* First Amendment to Master Manufacturing Supply Agreement, effective as of November 14, 2022, between the Company and STA Pharmaceutical Hong Kong Limited, a subsidiary of WuXi AppTec (incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K, filed with the SEC on February 23, 2023).

10.35↡* License and Collaboration Agreement, dated September 15, 2021, by and among Orphan Technologies and Vifor (International) Ltd., and, solely with respect to Article 15, the Company (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on October 29, 2021).

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1 to the License and Collaboration Agreement, effective as of October 5, 2022, by and between Travere Therapeutics Switzerland GmbH (formerly known as Orphan Technologies Limited) and Vifor (International) Ltd.

(incorporated by reference to Exhibit 10.39 to the Company's Annual Report on Form 10-K, filed with the SEC on February 23, 2023).

10.37↡* Commercial Supply Agreement, dated December 21, 2021, between the Company and Catalent Pharma Solutions, LLC (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022).

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21.1 List of subsidiaries of the Company.

23.1 Consent of BDO USA, LLP.

23.1 Consent of Ernst & Yo ung .

23.2 Consent of BDO USA, P.C.

24.1 Power of Attorney (see signature page hereto).

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32.2 Chief Financial Officer’s Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002.

97 Incentive Compensation Recoupment Policy

101.INS Inline XBRL Instance Document.

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104 The cover page to this Annual Report on Form 10-K has been formatted in Inline XBRL.

+ We have received confidential treatment of certain portions of this agreement, which have been omitted and filed separately with the SEC pursuant to Rule 406 under the Securities Act of 1933, as amended, or Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

† Indicates management contract or compensatory plan.

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* Certain portions of this exhibit are omitted pursuant to Item 601(b)(10)(iv).

∞ Certain confidential information contained in this Exhibit, marked in brackets, has been omitted, because it is both not material and of the type of information that the registrant treats as private or confidential.

FORM 10-K SUMMARY

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February 20, 2024 Travere Therapeutics, Inc.

/s/ Eric Dube

Chief Executive Officer

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Signature Title Date

Dube Chief Executive Officer and Director (Principal Executive Officer)

Dube February 23, 2023

/s/ Eric Dube Chief Executive Officer and Director (Principal Executive Officer)

Eric Dube February 20, 2024

/s/ Christopher Cline Chief Financial Officer (Principal Financial Officer)

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INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (BDO USA, LLP, San Diego, California, PCAOB ID# 243 )

Report of Independent Registered Public Accounting Firm (Ernst & Young LLP, San Diego, California, PCAOB ID:

Report of Independent Registered Public Accounting Firm (BDO USA, P.C., San Diego, California, PCAOB ID:

Financial Statements

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Travere Therapeutics, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Travere Therapeutics, Inc.

and subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the year ended December 31, 2023 and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Government rebate deductions from revenue

Description of the Matter

As described in Note 3 to the consolidated financial statements under the caption “Deductions from Revenue”, the Company calculates the rebates that it will be obligated to provide to government programs and deducts these estimated amounts from its gross product sales at the time the revenues are recognized.

Allowances for government rebates and discounts are established based on an estimated allocation of payers and the government-mandated discounts applicable to government-funded programs.

Where appropriate, these allowances take into consideration the Company’s historical experience, current statutory requirements and specific known market events and trends.

Estimated government rebates are included in accrued expenses on the consolidated balance sheet.

Auditing the government rebate deductions from revenue was complex and required significant auditor judgment because the related accruals were dependent on certain subjective assumptions.

Such subjective assumptions included estimated allocations of payers and estimated government-mandated discounts applicable to government-funded programs, each of which are adjusted for the Company’s historical experience, current statutory requirements and specific known market events and trends, where appropriate.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s government rebate deductions from revenue process.

This included testing controls over management’s review of the significant assumptions described above and inputs into the rebate calculations.

For example, we tested controls over actual product sales and the accuracy of forecasting estimated allocations of payers.

The testing was inclusive of management’s controls to evaluate the accuracy of its judgments when compared to actual rebates paid, rebate validation and processing, and controls to ensure that the data used to evaluate and support the significant assumptions was complete, accurate and, where applicable, verified to external data sources.

To test the government rebate deductions from revenue, our audit procedures included, among others, understanding and evaluating the significant assumptions and underlying data used in management’s calculations.

Our testing of significant assumptions included a lookback analysis to evaluate the historical accuracy of management’s estimates by comparing actual activity to previous estimates and performed sensitivity analyses over the subjective assumptions to evaluate the completeness of the reserves.

As a part of our procedures, we evaluated the reasonableness of the Company’s assumptions considering recent sales trends and regulatory factors related to government rebates.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2023.

San Diego, California

February 20, 2024

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Travere Therapeutics, Inc.

(the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 , in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 23, 2023 expressed an adverse opinion thereon.

We have audited the accompanying consolidated balance sheet of Travere Therapeutics, Inc.

(the “Company”) as of December 31, 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for each of the two years in the periods ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

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Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Business Combination-Related Contingent Consideration

As described in Note 8 to the consolidated financial statements, the Company previously acquired two businesses, related to the Cholbam and Chenodal products, whose purchase price included potential future payments that are contingent on the achievement of certain milestones and percentages of future net sales derived from the products acquired.

The Company recorded business combination-related contingent consideration liabilities at their fair value on the acquisition date and revalues them at the end of each reporting period.

We have identified the determination of the fair value of business combination-related contingent consideration as a critical audit matter.

The determination of the fair value of business combination-related contingent consideration liabilities requires management to make significant judgments including the assumptions used in the forecast of future net sales, the discount rates and the long-term growth rates.

Changes in these assumptions could have a material impact on the fair value of the business combination-related contingent consideration.

Auditing these elements involved especially challenging auditor judgment due to the subjectivity, nature and extent of auditor effort required to address the matter, including the extent of specialized skills and knowledge needed.

The primary procedures we performed to address this critical audit matter included:

• Testing the design and operating effectiveness of certain controls over the development of the significant judgment and assumptions used in the determination of fair value, including controls related to:

(i) assumptions used in the forecast of future net sales, (ii) discount rates applied to the forecasts and (iii) the long-term growth rates.

• Testing management’s process for developing fair value estimates including testing the completeness, accuracy, relevance and reliability of underlying data and evaluating the reasonableness of significant assumptions within management’s forecast of future net sales and long-term growth rates by comparing against the products’ historical and current performance, budgets, and market participant data.

• Utilizing professionals with specialized skills and knowledge in valuation to assist in evaluating the reasonableness of certain assumptions used by management, including the discount rates by developing independent estimates and comparing estimates to those utilized by management.

/s/ BDO USA, LLP

We have served as the Company’s auditor since 2014.

/s/ BDO USA, P.C.

We served as the Company’s auditor from 2014 to 2023.

San Diego, California

February 23, 2023

February 23, 2023, except for the effects of discontinued operations discussed in Notes 1 and 19, as to which the date is February 20, 2024.

TRAVERE THERAPEUTICS, INC.

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Prepaid expenses and other current assets 19,335 12,033

Current assets of discontinued operations — 2,990

Total current assets 616,775 486,437

Long-term inventory, net 31,494 —

Property and equipment, net 7,479 9,049

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Other assets 10,661 10,684

Non-current assets of discontinued operations — 48,342

Total assets $ 788,913 $ 672,585

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Deferred revenue, current portion 7,096 11,976

Business combination-related contingent consideration, current portion 7,000 7,400

Operating lease liabilities, current portion 4,909 4,433

Other current liabilities 5,237 5,722

Current liabilities of discontinued operations — 7,000

Total current liabilities 177,908 142,163

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Deferred revenue, less current portion 1,835 10,931

Business combination-related contingent consideration, less current portion 64,200 59,700

Operating lease liabilities, less current portion 22,612 27,510

Other non-current liabilities 8,485 9,385

Non-current liabilities of discontinued operations — 64,200

Total liabilities 588,103 629,734

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Selling, general and administrative 265,542 197,520 126,284

Change in fair value of contingent consideration 15,006 22,260 3,655

Acquired IPR&D expense — — 97,131

Restructuring 11,394 — —

Total operating expenses 533,376 429,273 331,261

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Loss on extinguishment of debt — ( 7,578 ) —

Total other expense, net ( 11,603 ) ( 17,917 ) ( 12,627 )

Loss before income tax (provision) benefit ( 278,169 ) ( 179,682 ) ( 188,790 )

Income tax (provision) benefit ( 313 ) ( 409 ) 19,359

Total other income (expense), net 12,028 ( 11,342 ) ( 17,458 )

Loss from continuing operations before income tax provision ( 376,110 ) ( 331,155 ) ( 216,883 )

Income tax provision on continuing operations ( 223 ) ( 313 ) ( 409 )

Loss from continuing operations, net of tax ( 376,333 ) ( 331,468 ) ( 217,292 )

Income from discontinued operations, net of tax 264,934 52,986 37,201

Net loss $ ( 111,399 ) $ ( 278,482 ) $ ( 180,091 )

Basic and diluted net loss per common share $ ( 4.37 ) $ ( 3.01 ) $ ( 3.56 )

Basic and diluted weighted average common shares outstanding 63,758,515 59,832,287 47,539,631

Per share data

Basic and diluted:

Net loss from continuing operations $ ( 5.07 ) $ ( 5.20 ) $ ( 3.63 )

Net income from discontinued operations 3.57 0.83 0.62

Net loss per common share $ ( 1.50 ) $ ( 4.37 ) $ ( 3.01 )

Weighted average common shares outstanding 74,267,418 63,758,515 59,832,287

Comprehensive loss:

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Unrealized loss on defined benefit pension plan ( 374 ) ( 368 ) —

Foreign currency translation gain (loss) 507 1,515 ( 1,452 )

Unrealized loss on marketable debt securities ( 2,484 ) ( 1,175 ) ( 176 )

Foreign currency translation (loss) gain ( 1,871 ) 507 1,515

Unrealized gain (loss) on marketable debt securities 3,696 ( 2,484 ) ( 1,175 )

Comprehensive loss $ ( 109,948 ) $ ( 280,827 ) $ ( 179,751 )

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(In thousands, except share amounts)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated

Deficit Total

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BALANCE - DECEMBER 31, 2021 62,491,498 $ 6 $ 1,068,634 $ ( 562 ) $ ( 765,966 ) $ 302,112

Cumulative-effect adjustment from adoption of ASU 2020-06 — — ( 74,945 ) — 30,225 ( 44,720 )

Share based compensation — — 37,897 — — 37,897

Issuance of common stock under the equity incentive plan and proceeds from exercise 935,598 — 4,585 — — 4,585

Employee stock purchase program stock purchase and expense 166,961 — 3,012 — — 3,012

Equity offering, net of issuance costs of $ 12.2 million

7,532,500 1 189,278 — — 189,279

Employee stock purchase program purchase and expense 161,874 — 4,259 — — 4,259

Issuance of common stock under At-The-Market offering, net of issuance costs of $ 0.6 million.

701,600 — 19,545 — — 19,545

Unrealized loss on defined benefit pension plan — — — ( 368 ) — ( 368 )

Foreign currency translation adjustments — — — 507 — 507

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BALANCE - DECEMBER 31, 2022 64,290,570 $ 6 $ 1,059,975 $ ( 2,907 ) $ ( 1,014,223 ) $ 42,851

Cumulative-effect adjustment from adoption of ASU 2020-06 — — ( 74,945 ) — 30,225 ( 44,720 )

Share based compensation — — 43,985 — — 43,985

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Employee stock purchase program purchase and expense 326,521 — 4,853 — — 4,853

Issuance of common stock under At-The-Market offering, net of issuance costs of $ 0.6 million.

Equity offering, net of issuance costs of $ 12.6 million

9,703,750 1 191,198 — — 191,199

Issuance of pre-funded common stock warrants, net of issuance costs of $ 1.6 million

— — 24,630 — — 24,630

Unrealized loss on defined benefit pension plan — — — ( 374 ) — ( 374 )

Foreign currency translation adjustments — — — ( 1,871 ) — ( 1,871 )

Unrealized loss on marketable debt securities — — — ( 2,484 ) — ( 2,484 )

Unrealized gain on marketable debt securities — — — 3,696 — 3,696

Net loss — — — — ( 111,399 ) ( 111,399 )

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Net loss $ ( 111,399 ) $ ( 278,482 ) $ ( 180,091 )

Net income from discontinued operations 264,934 52,986 37,201

Net loss from continuing operations ( 376,333 ) ( 331,468 ) ( 217,292 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Share based compensation 44,246 38,143 29,566

Change in estimated fair value of contingent consideration 15,006 22,260 3,655

Payments from change in fair value of contingent consideration ( 8,602 ) ( 14,375 ) ( 12,407 )

Loss on extinguishment of debt — 7,578 —

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Amortization of debt discount and issuance costs 1,718 1,622 11,242

Acquired IPR&D expense — — 97,131

Amortization of (discounts) premiums on investments ( 7,456 ) ( 700 ) 2,008

Other ( 3,626 ) 1,346 4,219

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Other current and non-current liabilities ( 418 ) ( 1,609 ) 1,123

Net cash used in operating activities - continuing operations ( 325,357 ) ( 260,846 ) ( 76,238 )

Net cash provided by operating activities - discontinued operations 45,336 74,555 61,446

Net cash used in operating activities ( 280,021 ) ( 186,291 ) ( 14,792 )

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Purchase of intangible assets ( 41,591 ) ( 28,366 ) ( 19,050 )

Purchase of IPR&D, net of cash acquired — — ( 95,279 )

Other — ( 600 ) —

Net cash used in investing activities ( 32,553 ) ( 137,623 ) ( 61,327 )

Net cash used in investing activities - continuing operations ( 151,626 ) ( 32,553 ) ( 137,623 )

Net cash provided by investing activities - discontinued operations 207,402 — —

Net cash provided by (used in) investing activities 55,776 ( 32,553 ) ( 137,623 )

Cash Flows From Financing Activities:

Payment of guaranteed minimum royalty ( 2,100 ) ( 2,100 ) ( 2,100 )

Payment of business combination-related contingent consideration ( 2,479 ) ( 6,104 ) ( 7,648 )

Proceeds from issuance of 2029 convertible senior notes — 316,250 —

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Repurchase of 2025 convertible senior notes including premium — ( 211,324 ) —

Proceeds from the issuance of common stock, net of issuance costs 191,198 — 189,278

Proceeds from the issuance of pre-funded warrants, net of issuance costs 24,630 — —

Proceeds from exercise of stock options 3,240 4,585 12,841

Proceeds from the issuances under the employee stock purchase program 3,166 2,978 2,112

Proceeds from the issuance of common stock, net of issuance costs — 189,278 108,692

Proceeds from the issuance of common stock in At-the-Market equity offering — 19,545 35,656

Net cash provided by financing activities - continuing operations 220,134 120,052 237,787

Net cash used in financing activities - discontinued operations ( 1,382 ) ( 2,479 ) ( 6,104 )

Net cash provided by financing activities 218,752 117,573 231,683

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Non-cash investing and financing activities:

Accrued capital expenditures $ — $ 100 $ 1,900

Accrued royalty in excess of minimum payable to the sellers of Thiola $ 16,206 $ 16,067 $ 19,362

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Travere Therapeutics, Inc.

(“we”, “our”, “us”, “Travere” and the “Company”) refers to Travere Therapeutics, Inc., a Delaware corporation, as well as our direct and indirect subsidiaries.

Travere is a fully integrated biopharmaceutical company headquartered in San Diego, California focused on identifying, developing and delivering life-changing therapies to people living with rare kidney, liver, and metabolic diseases.

We regularly evaluate and, where appropriate, act on opportunities to expand our product pipeline through licenses and acquisitions of products in areas that will serve patients with serious unmet medical need and that we believe offer attractive growth characteristics.

(“we”, “our”, “us”, “Travere” and the “Company”) refers to Travere Therapeutics, Inc., a Delaware corporation, as well as its subsidiaries.

The Company regularly evaluates and, where appropriate, acts on opportunities to expand its product pipeline through licenses and acquisitions of products in areas that will serve patients with serious unmet medical need and that the Company believes offer attractive growth characteristics.

Discontinued Operations - Sale of Bile Acid Product Portfolio

On July 16, 2023, Travere entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Mirum Pharmaceuticals, Inc.

("Mirum Pharmaceuticals" or “Mirum”), pursuant to which Mirum agreed to purchase from Travere substantially all of the assets primarily related to Travere’s business of development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of Chenodal and Cholbam (also known as Kolbam, and together with Chenodal, the “Products”), collectively, the "bile acid business".

On August 31, 2023, the Company and Mirum consummated the transactions contemplated by the Purchase Agreement (the “Closing”).

In connection with the Closing, Mirum paid Travere an upfront cash payment of $ 210.0 million.

Pursuant to the Purchase Agreement, Travere is eligible to receive up to $ 235.0 million upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $ 125.0 million to $ 500.0 million) of the Products.

The Company has reflected the bile acid business as a discontinued operation in the Consolidated Financial Statements for all periods presented.

See Note 19 for further discussion.

Unless otherwise noted, amounts and disclosures throughout the Notes to the Consolidated Financial Statements relate to the Company's continuing operations.

Approved Products:

FILSPARI® (sparsentan)

On February 17, 2023, the FDA granted accelerated approval of FILSPARI™ (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally at UPCR ≥1.5 gram/gram.

FILSPARI, a once-daily, oral medication is designed to selectively target two critical pathways in the disease progression of IgAN (endothelin 1 and angiotensin-II).

On February 17, 2023, the U.S.

Food and Drug Administration (the "FDA") granted accelerated approval of FILSPARI® (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a UPCR ≥1.5 gram/gram.

FILSPARI, a once-daily, oral medication is designed to selectively target two critical pathways (endothelin 1 and angiotensin-II) in the disease progression of IgAN.

This indication was granted under accelerated approval based on reduction in proteinuria.

The continued approval of FILSPARI may be contingent upon confirmation of a clinical benefit in the Company's Phase 3 clinical trial of sparsentan for the treatment of IgAN (the "PROTECT Study").

In September 2023, the Company announced topline two-year confirmatory secondary endpoint results from the PROTECT Study and i n December 2023, the Company announced the completion of a successful pre-NDA meeting with the FDA for FILSPARI in IgAN.

Following its regulatory engagement, the Company plans to submit a supplemental New Drug Application (sNDA) for conversion of the existing U.S.

accelerated approval of FILSPARI to full approval.

In August 2022, the Company and Vifor (International) Ltd.

("CSL Vifor"), with whom the Company entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the European Medicines Agency (the "EMA") had accepted for review the MAA of sparsentan for the treatment of IgAN in the EU.

The Company is awaiting an opinion by the Committee for Medicinal Products for Human Use (the "CHMP").

Thiola® and Thiola EC® (tiopronin tablets)

Thiola® and Thiola EC® (tiopronin tablets) are approved in the United States for the prevention of cystine (kidney) stone formation in patients with severe homozygous cystinuria.

Clinical-Stage Programs:

Sparsentan for the treatment of FSGS

Sparsentan remains a novel investigational product candidate which has been granted Orphan Drug Designation for the treatment of focal segmental glomerulosclerosis (FSGS) in the U.S.

Evaluation of sparsentan is ongoing in two pivotal Phase 3 clinical studies in rare kidney diseases.

Pegtibatinase ( TVT-058) is a novel investigational human enzyme replacement candidate being evaluated for the treatment of classical homocystinuria (HCU).

In December 2023, the Company announced that it had completed its planned Type C meeting with the FDA to discuss previously reported results from the Phase 3 DUPLEX Study of sparsentan in FSGS.

The FDA acknowledged the high unmet need for approved therapies as well as the challenges in studying FSGS but indicated that the two-year results from the Phase 3 DUPLEX Study alone were not sufficient to support an sNDA submission.

Together with CSL Vifor, the Company also plans to engage with the EMA to determine the potential for a subsequent variation to the Conditional Marketing Authorization (CMA) of sparsentan for the treatment of FSGS, subject to a review decision on the pending application for CMA of sparsentan in IgAN.

The Company is conducting additional analyses of FSGS data and intends to engage with regulators to evaluate potential regulatory pathways for a sparsentan FSGS indication.

Pegtibatinase

Pegtibatinas e is a novel investigational human enzyme replacement candidate being evaluated for the treatment of classical homocystinuria (HCU).

Pegtibatinase has been granted Rare Pediatric Disease, Fast Track and Breakthrough Therapy designations by the FDA, as well as orphan drug designation in the United States and European Union.

Pegtibatinase is currently being evaluated in the Phase 1/2 COMPOSE Study to assess its safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects in patients with classical HCU.

In May 2023, the Company announced positive topline results from cohort 6 in the Phase 1/2 COMPOSE Study.

In December 2023, the Company initiated the pivotal Phase 3 HARMONY Study to support the potential approval of pegtibatinase for the treatment of classical HCU.

The HARMONY Study is a global, randomized, multi-center, double-blind, placebo-controlled Phase 3 clinical trial designed to evaluate the efficacy and safety of pegtibatinase as a novel treatment to reduce total homocysteine (tHcy) levels.

Topline results from the HARMONY Study are expected in 2026.

The Company acquired pegtibatinase as part of the November 2020 acquisition of Orphan Technologies Limited.

Chenodal (chenodeoxycholic acid or CDCA) is a naturally occurring bile acid that is approved for the treatment of people with radiolucent stones in the gallbladder.

In September 2022, we were granted Fast Track Designation by the FDA for the investigation of Chenodal for cerebrotendinous xanthomatosis (CTX).

In January 2020, we randomized the first patients in our Phase 3 RESTORE Study to evaluate the effects of Chenodal in adult and pediatric patients with CTX, and the study enrollment remains open.

The pivotal study is intended to support an NDA submission for marketing authorization of Chenodal for CTX in the United States.

Preclinical Programs:

2 unchanged sentences

There are no treatment options currently approved for ALGS.

Other Commercial Products:

• Thiola ® and Thiola EC ® (tiopronin tablets) are approved in the United States for the prevention of cystine (kidney) stone formation in patients with severe homozygous cystinuria.

• Cholbam ® (cholic acid capsules) is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders.

• Chenodal (chenodiol tablets) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age.

The Company is party to a collaboration agreement with PharmaKrysto Limited and their early-stage cystinuria discovery program, whereby the Company is responsible for funding all research and development expenses for the pre-clinical activities associated with the cystinuria program.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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On an ongoing basis, the Company evaluates its estimates and assumptions.

These estimates and assumptions include revenue recognition, forecasting probability-weighted cash flows based upon estimates of forecasted revenues, clinical and regulatory timelines and discount rates, valuing equity securities in share-based payments, estimating expenses of contracted research organizations, estimating reserves for inventory, estimating the useful lives of depreciable and amortizable assets, goodwill impairment, estimating the fair value of contingent consideration, estimating of valuation allowances and uncertain tax positions, and estimates associated with the assessment of impairment for long-lived assets.

These estimates and assumptions include revenue recognition, forecasting probability-weighted cash flows based upon estimates of forecasted revenues, clinical and regulatory timelines and discount rates, valuing equity securities in share-based payments, estimating expenses of contracted research organizations, estimating reserves for inventory, estimating the useful lives of depreciable and amortizable assets, estimating of valuation allowances and uncertain tax positions, and estimates associated with the assessment of impairment for long-lived assets.

Revenue Recognition

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and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company only applies the five-step model to contracts when it is probable that the entity will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

The Company only recognizes revenue from contracts when it is probable that the entity will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

See Note 3 and Note 4 for further discussion.

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The Company recognizes aggregate sales-based milestones and royalty payments from product sales of which the license is deemed to be the predominant item to which the royalties relate, at the later of when the related sales occur or when the performance obligation to which the sales-based milestone or royalty has been allocated has been satisfied.

Revenue from collaboration and licensing agreements may also include sales of inventory, at cost plus a margin, which is recorded in license and collaboration revenue.

The Company utilizes significant judgement to develop estimates of the stand-alone selling price for each distinct performance obligation based upon the relative stand-alone selling price.

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The Company evaluates these cost estimates and the progress each reporting period and adjusts the measure of progress, if necessary.

Inventory, Related Reserves and Cost of Goods Sold

Inventory, which is recorded at the lower of cost or net realizable value, includes materials and other direct and indirect costs and is valued using the first-in, first-out method.

The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes down such inventory as appropriate.

In addition, the Company's products are subject to strict quality control and monitoring which the Company’s manufacturers perform throughout their manufacturing process.

The Company does not directly manufacture any product.

The Company has a single supplier for its product Thiola, and utilizes contract service providers for the manufacture of the active pharmaceutical ingredient for FILSPARI and the manufacture of primary packaging, secondary packaging and serialization for its product FILSPARI.

The inventory reserve was $ 2.4 million and zero at December 31, 2023 and 2022, respectively.

Inventory, net of reserves, consisted of the following at December 31, 2023 and 2022 ( in thousands ):

December 31, 2023 December 31, 2022

Raw materials $ 33,790 $ 2,397

Work in process 4,727 —

Finished goods 2,387 2,126

Total inventory $ 40,904 $ 4,523

Classified as:

Inventory, net $ 9,410 $ 4,523

Long-term inventory, net 31,494 —

Total inventory $ 40,904 $ 4,523

The balance classified as long-term inventory consists of raw materials and work in process for FILSPARI as of December 31, 2023.

The Company maintains levels of these inventories beyond a one-year production plan to limit exposure to potential supply disruption.

Such inventories are classified as long-term.

Cost of goods sold includes the cost of inventory sold, third party manufacturing and supply chain costs, product shipping, tracking and handling costs, and provisions for excess and obsolete inventory.

Cost of goods sold also includes the cost of goods sold under the Company's license and collaboration agreements, which currently consists of the sale of active pharmaceutical ingredients to the Company's collaboration partner, at cost plus a margin.

The following table summarizes cost of goods sold for the years ended December 31, 2023, 2022 and 2021 ( in thousands ):

Year Ended December 31,

2023 2022 2021

Cost of goods sold - product sales $ 8,406 $ 4,420 $ 3,818

Cost of goods sold - license and collaboration 3,044 — —

Total cost of goods sold $ 11,450 $ 4,420 $ 3,818

Capitalization of Inventory Costs

Prior to the regulatory approval of the Company's therapeutic candidates, the Company incurs expenses for the manufacture of drug product supplies to support clinical development that could potentially be available to support the commercial launch of those therapies.

The Company capitalizes inventory costs associated with its products after regulatory approval, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized.

Until the date at which regulatory approval has been received, costs related to the production of inventory are recorded as research and development expenses as incurred.

Any eventual sale of previously expensed ("zero-cost") inventories may impact future margins, for any periods in which those inventories are sold.

Prior to the February 2023 FDA accelerated approval of FILSPARI (sparsentan), the Company recognized approximately $ 7.5 million in research and development expenses related to the production of active pharmaceutical ingredients to support the commercial launch of FILSPARI.

For the year ended December 31, 2023, sales of FILSPARI primarily consisted of zero-cost inventories.

As of December 31, 2023, the Company had $ 7.2 million of zero-cost inventory remaining.

The Company expects to continue to benefit from the sale of previously expensed inventories through at least 2025.

The Company began capitalizing inventory costs associated with FILSPARI (sparsentan) following the February 2023 approval for treatment in IgAN.

At December 31, 2023, the Company's evaluation of excess inventory and obsolescence considered certain minimum purchase obligations, which in combination with lower forecasted sales of FILSPARI resulted in a $ 3.2 million charge to cost of goods sold.

The charge to cost of goods of sold included a $ 2.1 million write-down of inventory balances and $ 1.1 million accrued for firm purchase commitments.

Research and Development Expenses

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The Company expenses all research and development costs as they are incurred.

The Company's research and development costs are composed of salaries and bonuses, benefits, share-based compensation, license fees, milestones under license agreements, costs paid to third-party contractors to perform research, conduct clinical trials, develop drug materials and delivery devices, manufacture drug product supplies to support clinical development, and associated overhead expenses and facilities costs.

The Company charges direct internal and external program costs to the respective development programs.

The Company's research and development costs are composed of salaries and bonuses, benefits, share-based compensation, license fees, milestones under license agreements, costs paid to third-party contractors to perform research, conduct clinical trials, costs to develop drug materials and delivery devices, costs to manufacture drug product supplies to support clinical development, and associated overhead expenses and facilities costs.

The Company charges direct internal and external program costs to the

respective development programs.

The Company also incurs indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities.

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The adjustment was the result of a certain pre-launch inventory contract that was not properly evaluated for accounting implications at inception.

The Company evaluated the impact of the adjustment and concluded it is not material, individually and in the aggregate, to the current or any prior period financial statements.

The Company evaluated the impact of the adjustment and concluded it is not material, individually and in the aggregate, to 2022 or any prior period financial statements.

Clinical Trial Expenses

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The fair value of RSUs and PSUs are determined using the closing price of the Company’s common stock on the grant date.

For service based vesting grants, expense is recognized over the requisite service period based on the number of options or shares expected to ultimately vest.

For service based vesting grants, expense is recognized over the requisite service period.

For PSUs, expense is recognized over the implicit service period, assuming vesting is probable.

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The Company calculates basic earnings per share by dividing net income/(loss) by the weighted average number of shares outstanding during the period.

The diluted earnings/(loss) per share computation includes the effect, if any, of shares that would be issuable upon the exercise of outstanding stock options, derivative warrant liability, convertible debt and RSUs, reduced by the number of shares which are assumed to be purchased by the Company from the resulting proceeds at the average market price during the year, when such amounts are dilutive to the earnings per share calculation.

Pre-funded warrants issued and sold by the Company to purchase shares of its common stock are included in the calculation of basic net loss per common share if the exercise price of the pre-funded warrant represents little consideration and is non-substantive in relation to the price paid for the warrant, and if the warrants are immediately exercisable with no further vesting conditions or contingencies associated with them.

The Company's diluted earnings/(loss) per share computation includes the effect, if any, of shares that would be issuable upon the exercise of outstanding stock options, convertible debt and RSUs, reduced by the number of shares which are assumed to be purchased by the Company from the resulting proceeds at the average market price during the year, when such amounts are dilutive to the earnings per share calculation.

In accordance with ASC 260, Earnings per Share , if a company had a discontinued operation, the company uses income from continuing operations, adjusted for preferred dividend and similar adjustments, as its control number to determine whether potential common shares are dilutive.

Cash and Cash Equivalents

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For the years ended December 31, 2023, 2022 and 2021, bad debt expense recorded in the Consolidated Statements of Operations and Comprehensive Loss was immaterial.

The Company's evaluation and application of ASU No.

2016-13, Financial Instruments - Credit Losses for the current period included an assessment of our aged trade receivables balances and their underlying credit risk characteristics.

The Company's evaluation of credit losses for the current period included an assessment of our aged trade receivables balances and their underlying credit risk characteristics.

Our evaluation of past events, current conditions, and reasonable and supportable forecasts about the future resulted in an expectation of immaterial credit losses.

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The Company has no manufacturing capabilities and relies on third party manufacturers who are sole source suppliers for manufacturing of its products.

The Company intends to rely on third-party manufacturers for the long-term commercial supply of FILSPARI and for its development stage product candidates, including sparsentan for the treatment of FSGS and pegtibatinase (TVT-058).

The Company expects the manufacturers of each product or product candidate to, at least initially and potentially for a significant period of time, be single source suppliers to the Company.

Inventory, Related Reserves and Cost of Goods Sold

Inventory, which is recorded at the lower of cost or net realizable value, includes materials, labor, and other direct and indirect costs and is valued using the first-in, first-out method.

In addition, the Company's products are subject to strict quality control and monitoring which the Company’s manufacturers perform throughout their manufacturing process.

The Company does not directly manufacture any product.

The Company has single suppliers for products Chenodal and Thiola, and prospectively arranges for manufacture from contract service providers for its product Cholbam.

The inventory reserve was $ 3.5 million and $ 4.1 million at December 31, 2022 and 2021, respectively.

Inventory, net of reserves, consisted of the following at December 31, 2022 and 2021 ( in thousands ):

December 31, 2022 December 31, 2021

Raw materials $ 3,627 $ 5,205

Finished goods 3,295 2,108

Total inventory $ 6,922 $ 7,313

Cost of goods sold includes the cost of inventory sold, third party manufacturing and supply chain costs, product shipping and handling costs, and provisions for excess and obsolete inventory.

Capitalization of Inventory Costs

Prior to the regulatory approval of the Company's drug candidates, the Company incurs expenses for the manufacture of drug product supplies to support clinical development that could potentially be available to support the commercial launch of those drugs.

Until the date at which regulatory approval has been received, costs related to the production of inventory are recorded as research and development expenses as incurred.

Any eventual sale of previously expensed ("zero-cost") inventories may impact future margins, for any periods in which those inventories are sold.

As of December 31, 2022, we have recognized approximately $ 7.5 million in research and development expenses related to the production of active pharmaceutical ingredient that could potentially support the commercial launch of FILSPARI.

Segment Information

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Depreciation is computed using the straight-line method over the related estimated useful lives as presented in the table below.

Significant additions and improvements are capitalized, while repairs and maintenance are charged to expense as incurred.

Significant additions and improvements are capitalized, while repairs and maintenance are

charged to expense as incurred.

Property and equipment purchased for specific research and development projects with no alternative use is expensed as incurred.

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The Company has made an accounting policy election to not recognize short-term leases, or leases that have a lease term of 12 months or less at commencement date, within its Consolidated Balance Sheets and to recognize those lease payments in the Consolidated Statements of Operations and Comprehensive Loss on a straight-line basis over the lease term.

Acquired IPR&D

The Company assesses whether IPR&D assets acquired from others in an asset acquisition have alternative future use (in research and development projects or otherwise) at the acquisition date.

If such assets have alternative future use, they are capitalized and recognized as an intangible asset.

If such assets do not have alternative use, nor is there an alternative indication that the Company plans to pursue, the upfront consideration transferred, including any contingent consideration that is probable and reasonably estimable, is charged to expense at the acquisition date.

The Company expensed the acquired IPR&D associated with the acquisition of Orphan Technologies in 2020, which included the developmental product candidate for the treatment of classical homocystinuria (HCU), pegtibatinase (TVT-058).

Intangible Assets, Net

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Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives and are reviewed periodically for impairment.

Intangible assets related to in-process research and development (IPR&D) projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts.

During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment.

If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and are amortized over a period that best reflects the economic benefits provided by these assets.

Intangible Assets with Cost Accumulation Model

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The liability for royalties in excess of the annual contractual minimum is recognized in the period in which the royalties become probable and estimable, which is typically in the period corresponding with the respective sales.

The Company records an offsetting increase to the cost basis of the asset under the cost accumulation model.

The additional cost basis is subsequently amortized over the remaining life of the license agreement.

The Company records an offsetting increase to the cost basis of the asset under the cost accumulation model ("Thiola Intangible").

The additional cost basis is subsequently amortized over the remaining useful life.

In the second quarter of 2023, the Company reduced the estimated useful life of the Thiola Intangible to better reflect the pattern of projected future cash flows, resulting in incremental expense of $ 3.7 million recorded in selling, general, and administrative .

The change in estimated useful life has been accounted for as a change in accounting estimate and the remaining carrying amounts of the Thiola Intangible will be amortized prospectively over the new useful life.

Consistent with all prior periods since Thiola was acquired, the Company has not accrued any liability for future royalties in excess of the annual contractual minimum at December 31, 2023 as such royalties are not yet probable and estimable.

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The Company reviews each investment and collaboration agreement to determine if it has a variable interest in the entity.

In assessing whether the Company has a variable interest in the entity as a whole, the Company considers and makes judgements regarding the purpose and design of the

entity, the value of the licensed assets to the entity, the value of the entity’s total assets and the significant activities of the entity.

In assessing whether the Company has a variable interest in the entity as a whole, the Company considers and makes judgements regarding the purpose and design of the entity, the value of the licensed assets to the entity, the value of the entity’s total assets and the significant activities of the entity.

If the Company has a variable interest in the entity as a whole, the Company assesses whether or not the Company is a primary beneficiary of that VIE, based on a number of factors, including:

(i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the parties’ contractual rights and responsibilities pursuant to the collaboration agreement, and (iii) which party has the obligation to absorb losses of or the right to receive benefits from the VIE that could be significant to the VIE.

(i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the

parties’ contractual rights and responsibilities pursuant to the collaboration agreement, and (iii) which party has the obligation to absorb losses of or the right to receive benefits from the VIE that could be significant to the VIE.

If the Company determines that it is the primary beneficiary of a VIE at the onset of the collaboration, the collaboration is treated as a business combination and the Company consolidates the financial statements of the VIE into the Company’s consolidated financial statements.

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If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

In addition, indefinite-lived intangible assets, comprised of IPR&D, are reviewed for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired by comparing the fair value to the carrying value of the asset.

In addition, indefinite-lived intangible assets are reviewed for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired by comparing the fair value to the carrying value of the asset.

To determine the fair value of the asset, the Company used the multi-period excess earnings method of the income approach.

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There were no impairments related to finite-lived intangible assets in the years ended December 31, 2023, 2022 and 2021.

Contingent Consideration

The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date.

On a quarterly basis, the Company revalues these obligations and record increases or decreases from their fair value as an adjustment to the consolidated statement of operations.

Changes to contingent consideration obligations can result from changes to discount rates, accretion of the liability due to the passage of time, changes in revenue forecasts and changes in our estimates of the likelihood or timing of achieving commercial revenue milestones.

The Company follows ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

The Company follows ASC 740, Income Taxes ("ASC 740"), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

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The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes,

accounting in interim periods and requires increased disclosures.

ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

The Company’s policy is to record estimated interest and penalty related to the underpayment of income taxes or unrecognized tax benefits as a component of its income tax provision.

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Reclassifications

Certain reclassifications have been made to the prior year financial statements in order to conform to the current year’s presentation, including reclassifying operating lease right of use assets and operating lease liabilities from other assets and other liabilities, respectively on the Consolidated Balance Sheets.

These reclassifications did not have an impact on total assets or total liabilities of the Consolidated Balance Sheets.

Certain reclassifications have been made to the prior year financial statements in order to conform to the current year’s presentation, including reclassifying the prior period carrying values of the assets and liabilities included in the sale of the bile acid business as assets and liabilities of discontinued operations within the Consolidated Balance Sheets, and revenues and expenses attributable to the bile acid business as net income from discontinued operations.

These reclassifications did not have an impact on total assets or total liabilities in the Consolidated Balance Sheets or net loss in the Consolidated Statements of Operations.

The Company expenses external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents and patent applications pending.

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See Note 11 for further discussion.

Discontinued Operations

Discontinued operations is presented when there is a disposal of a component or a group of components that in the Company's judgement represents a strategic shift that will have a major effect on the Company's operations and financial results.

Results of operations directly related to discontinued operations are aggregated into a single line item in the Consolidated Statements of Operations for all periods presented.

See Note 19 for further discussion.

Restructuring

Restructuring charges consist primarily of employee severance, one-time termination benefits related to the reduction of its workforce, and other costs.

Liabilities for costs associated with a restructuring activity are recognized when the liability is incurred and are measured at fair value.

One-time termination benefits are expensed at the date the entity notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the service period.

Termination benefits are calculated based on a regional benefit practices and local statutory requirements.

In December 2023, the Company initiated a restructuring plan that resulted in a reduction of its workforce, primarily impacting non-field-based employees.

One-time termination benefits include severance, continuation of health insurance coverage, and other benefits for a specified period of time.

The Company estimates that it will incur a total of $ 12.0 million to $ 14.0 million in non-recurring charges in connection with the restructuring, of which the Company has recognized $ 11.4 million for the year ended December 31, 2023.

As of December 31, 2023, the Company recorded accrued restructuring costs of $ 11.4 million, which is included in accrued expenses of the Consolidated Balance Sheets.

No cash payments were made related to the restructuring during 2023.

The Company expects that it will incur the remaining estimated restructuring costs during 2024.

The Company intends to pay all restructuring plan amounts during 2024.

Liability balance at January 1, $ —

Restructuring expenses 11,394

Foreign currency impact 27

Liability balance at December 31, $ 11,421

Recently Adopted Accounting Pronouncements

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The ASU includes amendments to the guidance on convertible instruments and the derivative scope exception for contracts in an entity's own equity in Subtopic 815-40 and simplifies the accounting for convertible instruments which include beneficial conversion features or cash conversion features by removing certain separation models in Subtopic 470-20.

Additionally, the ASU will require entities to use the "if-converted" method when calculating diluted earnings per share for convertible instruments.

The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Additionally, the ASU requires entities to use the "if-converted" method when calculating diluted earnings per share for convertible instruments.

The adoption of the new standard impacted the Company's accounting for its Convertible Senior Notes Due 2025 (2025 Notes), discussed in Note 7, which were previously accounted for using the cash conversion model applied under ASC 470-20, Debt with Conversion and Other Options ("ASC 470-20").

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The cumulative effect of the accounting change as of January 1, 2022 increased the carrying amount of the 2025 Notes by $ 44.7 million, reduced additional paid-in capital by $ 74.9 million, and reduced accumulated deficit by $ 30.2 million.

The Company has not adjusted prior period comparative information and will continue to disclose prior period financial information in accordance with the previous accounting guidance.

Recently Issued Accounting Pronouncements

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Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption.

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures.

This new standard does not change accounting for income taxes but requires new disclosures focusing on two areas, the effective rate reconciliation and taxes paid.

This new standard is effective for public business entities for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company expects to adopt this new standard beginning in fiscal 2025 when it becomes effective.

In November 2023, the FASB issued ASU No.

2023-07, Improvements to Reportable Segment Disclosure.

The FASB amended the guidance in ASC 280, Segment Reporting ("ASC 280"), to require a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment's profit or loss and assets that are currently required annually.

Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280.

The guidance is applied retrospectively to all periods presented in financial statements, unless it is impracticable.

This new guidance is effective for public business entities for annual periods beginning after December 15, 2023.

Early adoption is permitted.

The Company will adopt this new guidance beginning in fiscal 2024 when it becomes effective.

REVENUE RECOGNITION

Product Sales, Net

Product sales consist of bile acid products (Chenodal and Cholbam) and tiopronin products (Thiola and Thiola EC).

The Company sells its products through direct-to-patient distributors worldwide, with the United States and Canada representing 97 % and 2 % of net product sales, respectively, and rest of world representing less than 1 % of net product sales, based on the product shipment destination.

Revenues from product sales are recognized in satisfaction of a single performance obligation when the customer obtains control of the Company’s product, which occurs upon delivery to the customer.

The Company receives payments from its product sales, primarily through third party payers, based on terms that generally are within 30 days of delivery of product to the patient.

Product sales consist of FILSPARI and tiopronin products (Thiola and Thiola EC).

The Company sells its products to specialty pharmacies and through direct-to-patient distributors worldwide, with the United States representing 99 % of net product sales.

The Company sells FILSPARI to three direct-to-patient specialty pharmacies.

The Company sells its other products to patients and pharmacies, with distribution facilitated through a single direct-to-patient distributor.

Revenues from product sales are recognized in satisfaction of a single performance obligation when the customer obtains control of the Company’s product.

For FILSPARI, sales are recognized upon delivery of the product to the specialty pharmacies.

The Company receives payments from its FILSPARI sales based on terms that are generally 30 days from shipment of the product to the specialty pharmacy.

For the Company's other products, product sales are recognized upon delivery to the patient.

The Company receives payments from sales of its other products, primarily through third party payers, based on terms that generally are within 30 days of delivery of product to the patient .

Contracts do not contain significant financing components based on the typical period of time between performance of services and collection of consideration.

Deductions from Revenue

Revenues from product sales are recorded at the net sales price, which includes provisions resulting from discounts, rebates and co-pay assistance that are offered to customers, health care providers, payers and other indirect customers relating to the Company’s sales of its products.

Revenues from product sales are recorded at the net sales price, which includes provisions resulting from discounts, rebates and co-pay assistance that are offered to customers, payers and other indirect customers relating to the Company’s sales of its products.

These provisions are based on the estimates of the amounts earned or to be claimed on the related sales.

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The Company calculates the rebates that it will be obligated to provide to government programs and deducts these estimated amounts from its gross product sales at the time the revenues are recognized.

Allowances for government rebates and discounts are established based on actual payer information, which is reasonably estimated at the time of delivery, and the government-mandated discounts applicable to government-funded programs.

Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets.

Allowances for government rebates and discounts are established based on an estimated allocation of payers and the government-mandated discounts applicable to government-funded programs.

Rebate discounts are included in accrued expenses in the accompanying consolidated balance sheets.

Commercial Rebates:

The Company calculates the rebates it incurs due to contracts with certain commercial payers and deducts these amounts from its gross product sales at the time the revenues are recognized.

Allowances for commercial rebates are established based on actual payer information, which is reasonably estimated at the time of delivery.

Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets.

The Company calculates the rebates it incurs according to any contracts with certain commercial payers and deducts these amounts from its gross product sales at the time the revenues are recognized.

Allowances for commercial rebates are established based on actual payer information, which is reasonably estimated at the time of delivery for applicable products.

Rebate discounts are included in accrued expenses in the accompanying consolidated balance sheets.

Prompt Pay Discounts:

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Consistent with industry practice, the Company offers its customers a limited right to return product purchased directly from the Company, which is principally based upon the product’s expiration date.

Generally, shipments are only made upon a patient prescription thus returns are minimal.

Historically, returns have been immaterial.

Co-pay Assistance:

The Company offers a co-pay assistance program, which is intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payers.

The calculation of the accrual for co-pay assistance is based on an identification of claims and the cost per claim associated with product that has been recognized as revenue.

The calculation of the accrual for co-pay assistance is based on an estimate of claims and the estimated cost per claim associated with product that has been recognized as revenue.

The following table summarizes net product sales for the year ended December 31, 2023, 2022 and 2021 ( in thousands ):

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2023 2022 2021

Bile acid products $ 102,558 $ 95,654 $ 89,438

Tiopronin products $ 98,329 $ 97,970 $ 115,122

FILSPARI 29,208 — —

Total net product sales $ 127,537 $ 97,970 $ 115,122

COLLABORATION AND LICENSE AGREEMENTS

On September 15, 2021, the Company entered into a license and collaboration agreement (“License Agreement”) with Vifor (International) Ltd.

In September 2021, the Company entered into a license and collaboration agreement (“License Agreement”) with Vifor (International) Ltd.

(“CSL Vifor”), pursuant to which the Company granted an exclusive license to CSL Vifor for the commercialization of sparsentan in Europe, Australia and New Zealand ("Licensed Territories").

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The remaining $ 43.0 million of the transaction price was allocated to the clinical development activities and recorded as deferred revenue, which will be recognized over the development period based upon the ratio of costs incurred to date to the total estimated costs.

The Company recognized a total of $ 11.5 million in license and collaboration revenue for the year ended December 31, 2022, based upon the ratio of costs incurred to total estimated costs.

The Company recognized a total of $ 16.7 million in license and collaboration revenue for the year ended

December 31, 2021, which consisted of $ 12.0 million from the license and $ 4.7 million from the clinical development activities, based upon the ratio of costs incurred to total estimated costs.

The Company recognized a total of $ 17.7 million in license and collaboration revenue for the year ended December 31, 2023, which consisted of $ 3.3 million from the sale of active pharmaceutical ingredients to CSL Vifor, and $ 14.4 million for clinical development activities, based upon the ratio of costs incurred to total estimated costs.

A decrease in total costs for clinical development activities due to the restructuring announced in December 2023 resulted in a $ 2.9 million increase in amortization of deferred revenue under the cost-to-cost model for the year ended December 31, 2023.

For the year ended December 31, 2022, the Company recognized a total of $ 11.5 million in license and collaboration revenue for clinical development activities, based upon the ratio of costs incurred to total estimated costs.

Deferred revenue related to the clinical development activities as of December 31, 2023 was $ 8.9 million.

Of this amount, $ 7.1 million was classified as current as of December 31, 2023, based upon amount expected to be realized within the next year.

As of December 31, 2022, deferred revenue related to the clinical development activities was $ 22.9 million, of which $ 12.0 million was classified as current.

The Company estimates that the remainder of the deferred revenue balance will be fully realized by mid-2025.

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Deferred Revenue

2023 2022 2021

Balance at January 1, $ 22,907 $ 36,647 $ —

New consideration resulting in deferred revenue — — 55,000

License revenue — ( 12,000 )

Collaboration revenue ( 11,490 ) ( 4,714 )

License and collaboration revenue ( 14,363 ) ( 11,490 ) ( 16,714 )

Foreign currency impact 387 ( 2,250 ) ( 1,639 )

Balance at December 31, $ 8,931 $ 22,907 $ 36,647

In February 2021, the Company entered into a limited co-promotion agreement with Albireo Pharma, Inc.

("Albireo"), whereby the Company's Cholbam dedicated sales representatives devoted a portion of their efforts to promoting Albireo's product, Bylvay (odevixibat), in the United States following the July 2021 launch of the product.

The initial term of the arrangement was two years from the July 2021 launch of Bylvay, terminable at will by either party after one year following launch.

In June 2022, the Company and Albireo mutually agreed to terminate the co-promotion agreement upon the one year anniversary of the launch, with such termination effective July 20, 2022.

For the year ended December 31, 2022 and 2021, the Company recognized $ 1.7 million and $ 1.8 million, respectively, offset against selling, general, and administrative expenses.

ACQUISITIONS AND VARIABLE INTEREST ENTITIES

Acquisition of Orphan Technologies Limited

In November 2020, the Company completed the acquisition of Orphan Technologies Limited (“Orphan”), including Orphan’s rare metabolic disorder drug pegtibatinase (TVT-058).

The Company acquired Orphan by purchasing all of the outstanding shares.

In exchange for the shares, the Company made an upfront cash payment at closing of $ 90.0 million plus closing adjustments, net liabilities assumed, and transaction expenses of $ 1.2 million, $ 1.8 million, and $ 4.2 million, respectively.

Under the Agreement, the Company has also agreed to make contingent cash payments up to an aggregate of $ 427.0 million based on the achievement of certain development, regulatory and commercialization events as set forth in the Agreement, as well as additional tiered mid-single digit royalty payments based upon future net sales of any pegtibatinase products in the US and Europe, subject to certain reductions as set forth in the Agreement, and a contingent payment in the event a pediatric rare disease voucher for any pegtibatinase product is granted.

Substantially all of the value of the assets acquired was concentrated within pegtibatinase, and as of the acquisition date, the Company did not anticipate any economic benefit to be derived from pegtibatinase other than the primary indication.

Accordingly, the transaction was treated as an asset acquisition with amounts charged to expense for the acquired in-process research and development on the date of acquisition.

The Company incurred $ 97.1 million in IPR&D expense related to the Orphan acquisition, which was recognized in 2020.

In accordance with ASC 450, contingent cash payments will be accrued for when it is probable that a liability has been incurred and the amount can be reasonably estimated.

As of December 31, 2022, no contingent cash payments have been accrued.

VARIABLE INTEREST ENTITIES

Stock Purchase and Collaboration Agreement with PharmaKrysto

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Under the Collaboration Agreement, the Company will fund all research and development expenses for the pre-clinical activities associated with the cystinuria program, which are estimated to be approximately $ 5.0 million.

The Agreements require the Company to purchase an additional 5 % of the outstanding common shares for $ 1.0 million upon the occurrence of a specified pre-clinical milestone, and grant an option to the Company to purchase the remaining outstanding shares of PharmaKrysto for $ 5.0 million upon the occurrence of a subsequent pre-clinical milestone prior to expiration of the option on March 8, 2025.

If the Company elects to exercise the option, it would be required to perform commercially

reasonable clinical diligence obligations.

The Agreements require the Company to purchase an additional 5 % of the outstanding common shares for $ 1.0 million upon the occurrence of a specified pre-clinical milestone, and granted an option to the Company to purchase the remaining outstanding shares of PharmaKrysto for $ 5.0 million upon the occurrence of a subsequent pre-clinical milestone prior to expiration of the option on March 8, 2025.

If the Company elects to exercise the option, it would be required to perform commercially reasonable clinical diligence obligations.

In addition, it would be required to make cash milestone payments totaling up to an aggregate $ 16.0 million upon the achievement of certain development and regulatory milestones, plus tiered royalty payments of less than 4 % on future net sales of a product, if approved.

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The upfront payments were expensed to research and development and other income (expense), net upon initial consolidation.

The Company consolidated other current assets and accrued liabilities of $ 0.3 million as of December 31, 2022.

The results of operations were not significant for the year ended December 31, 2022.

The consolidated assets and liabilities as of December 31, 2023 and 2022 were immaterial.

The results of operations were not significant for the years ended December 31, 2023 and 2022.

The Company is not required to provide additional funding other than the contractually required amounts disclosed above.

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The Company’s investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.

Marketable debt securities consist of the following ( in thousands ):

Marketable debt securities consisted of the following ( in thousands ):

As of December 31,

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Securities of government-sponsored entities 105,894 40,855

Total marketable debt securities $ 388,557 $ 387,129

Total available-for-sale marketable debt securities $ 508,675 $ 388,557

The following is a summary of short-term marketable debt securities classified as available-for-sale as of December 31, 2023 ( in thousands ):

Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value

Remaining Contractual Maturity

(in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value

Marketable debt securities:

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The following is a summary of short-term marketable debt securities classified as available-for-sale as of December 31, 2022 ( in thousands ):

Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value

Remaining Contractual Maturity

(in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value

Marketable debt securities:

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Total available-for-sale marketable debt securities $ 391,512 $ 41 $ ( 2,996 ) $ 388,557

During 2022 and 2021, the Company had less than $ 0.1 million in realized gains on marketable debt securities.

The Company received proceeds from the sale or maturity of marketable debt securities of $ 382.0 million, $ 433.6 million and $ 273.5 million for 2022, 2021 and 2020, respectively.

During 2022, 2021 and 2020, the Company had purchases of marketable debt securities of $ 385.4 million, $ 547.1 million, and $ 215.0 million, respectively.

During 2023 and 2022, realized gains on marketable debt securities were immaterial.

As of December 31, 2023 and December 31, 2022, the accrued interest receivable related to the Company's marketable debt securities was $ 4.6 million and $ 1.9 million, respectively, and was recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets.

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As of December 31, 2023 and December 31, 2022, the Company does not intend to sell these investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis.

The increase in unrealized losses for the year ended December 31, 2022 was primarily due to increases in short-term interest rates.

The decrease in unrealized losses for the year ended December 31, 2023 was primarily due to fluctuations in short-term interest rates.

The Company does not believe the unrealized losses incurred during the period are due to credit-related factors.

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68,904 68,904

Unamortized debt discount — ( 46,045 )

Unamortized debt issuance costs - 2.25 % convertible senior notes due 2029

( 7,348 ) ( 8,750 )

Unamortized debt issuance costs - 2.50 % convertible senior notes due 2025

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If a “make-whole fundamental change” (as defined in the 2029 Indenture) occurs, then the Company will, in certain circumstances, increase the conversion rate for a specified period of time.

The 2029 Notes will be redeemable, in whole or in part at the Company’s option at any time, and from time to time, on or after March 2, 2026 and, in the case of any partial redemption, on or before the 40th scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the

Company sends the related redemption notice;

The 2029 Notes will be redeemable, in whole or in part at the Company’s option at any time, and from time to time, on or after March 2, 2026 and, in the case of any partial redemption, on or before the 40 th scheduled trading day before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

and (2) the trading day immediately before the date the Company sends such notice.

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Upon the receipt of conversion requests, the settlement of the 2025 Notes will be paid pursuant to the terms of the 2025 Indenture.

In the event that all of the 2025 Notes are converted, the

Company would be required to repay the principal amount and any conversion premium in any combination of cash and shares of its common stock at the Company’s option.

In the event that all of the 2025 Notes are converted, the Company would be required to repay the principal amount and any conversion premium in any combination of cash and shares of its common stock at the Company’s option.

In addition, calling the 2025 Notes for redemption will constitute a “make-whole fundamental change."

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Therefore, the repurchase of the 2025 Notes was accounted for as a debt extinguishment.

The Company recorded a $ 7.6 million loss on extinguishment of debt on its Consolidated Statements of Operations for the year ended December 31, 2022, which includes the write-off of related deferred financing costs of $ 3.4 million.

After giving effect to the repurchase, the total remaining principal amount outstanding under the 2025 Notes as of December 31, 2022 was $ 68.9 million.

The Company recorded a $ 7.6 million loss on extinguishment of debt on its Consolidated Statements of Operations for the year ended December 31, 2022, which included the write-off of related deferred financing costs of $ 3.4 million.

After giving effect to the repurchase, and as of December 31, 2023, the total remaining principal amount outstanding under the 2025 Notes was $ 68.9 million.

The 2025 and 2029 Notes are accounted for in accordance with ASC 470-20, Debt with conversion and Other Options (“ASC 470-20”) and ASC 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”).

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Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The valuation techniques used to measure the fair value of the Company’s debt securities and all other financial instruments, all of which have counter-parties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data.

The valuation techniques used to measure the fair value of the Company’s debt securities and all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data.

Based on the fair value hierarchy, the Company classified marketable debt securities within Level 2.

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As of December 31, 2023 and 2022, the fair value of the Company's 2.50 % Convertible Senior Notes due 2025 was $ 58.3 million and $ 62.9 million, respectively.

As of December 31, 2022, the fair value of the Company's 2.25 % Convertible Senior Notes due 2029, which were issued in 2022, was $ 283.0 million.

As of December 31, 2023 and 2022, the fair value of the Company's 2.25 % Convertible Senior Notes due 2029, which were issued in 2022, was $ 212.1 million and $ 283.0 million, respectively.

The fair values were estimated utilizing market quotations and are considered Level 2.

The following table presents the Company’s asset and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2022 (in thousands):

The following table presents the Company’s assets, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2023 (in thousands):

As of December 31, 2023 Fair Value Hierarchy at December 31, 2023

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Total $ 566,851 $ 58,176 $ 508,675 $ —

Business combination-related contingent consideration $ 71,200 $ — $ — $ 71,200

Total $ 71,200 $ — $ — $ 71,200

The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2021 (in thousands):

As of December 31, 2022 Fair Value Hierarchy at December 31, 2022

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Total $ 450,245 $ 61,688 $ 388,557 $ —

Business combination-related contingent consideration $ 67,100 $ — $ — $ 67,100

Total $ 67,100 $ — $ — $ 67,100

The Company acquired two businesses, related to the Cholbam and Chenodal products, whose purchase price included potential future payments that are contingent on the achievement of certain milestones and percentages of future net sales derived from the products acquired.

The Company recorded contingent consideration liabilities at their fair value on the acquisition date and revalues them at the end of each reporting period.

In estimating the fair value of the Company’s contingent consideration, the Company uses a Monte Carlo Simulation.

The determination of the contingent consideration liabilities requires significant judgements including the reasonableness of estimates and assumptions included in the forecasts of future net sales, long-term growth rates and the discount rates applied to such forecasts.

Changes in these estimates and assumptions could have a significant impact on the fair value of the contingent consideration liabilities.

Discount rates used to determine the fair value at December 31, 2022 and 2021 are as follows:

Revenue Discount Payment Discount

Cholbam Chenodal

December 31, 2022 7.75 % 8.00 % 8.10 %

December 31, 2021 6.25 % 7.25 % 6.48 %

Based on the fair value hierarchy, the Company classified the fair value of contingent consideration within Level 3 because valuation inputs are based on projected revenues discounted to a present value.

The following table sets forth a summary of changes in the estimated fair value of the Company's Level 3 business combination-related contingent consideration for the years ended December 31, 2022 and 2021 (in thousands) :

Fair Value Measurements of Acquisition-Related Contingent Consideration

Balance at January 1, $ 67,100 $ 65,100

Changes in the fair value of contingent consideration 15,006 22,260

Contractual payments ( 8,066 ) ( 17,444 )

Contractual payments included in accrued liabilities at December 31, ( 2,840 ) ( 2,700 )

Foreign currency impact — ( 116 )

Balance at December 31, $ 71,200 $ 67,100

INTANGIBLE ASSETS

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("Ligand") for a worldwide sublicense to develop, manufacture and commercialize sparsentan (the “Ligand License Agreement”).

The cost of the Ligand License Agreement, which is presented net of amortization in the accompanying Consolidated Balance Sheets in intangible assets, net, is being amortized to research and development on a straight-line basis through September 30, 2023.

As consideration for the license, the Company is required to make substantial payments upon the achievement of certain milestones, totaling up to $ 114.1 million, including a $ 23.0 million milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) we plan to make in the first quarter of 2023, which was triggered upon the accelerated approval of FILSPARI in February 2023.

Through December 31, 2022, the Company has capitalized $ 18.4 million for contractual milestone payments under the Ligand License Agreement.

Should the Company commercialize sparsentan or any products containing related compounds, the Company will be obligated to pay to Ligand (and BMS) an escalating annual royalty between 15 % and 17 % of net sales of all such products.

With the February 2023 approval of FILSPARI (sparsentan), the Company expects to begin incurring costs associated with these royalties in 2023.

Manchester Pharmaceuticals LLC

In 2014, the Company acquired intangible assets with finite lives related to the Chenodal product rights, trade names, and customer relationships with the values of $ 67.8 million, $ 0.2 million, and $ 0.4 million, respectively.

The useful lives related to the acquired product rights, trade names, and customer relationships are expected to be approximately 16 , 1 and, 10 years, respectively.

Amortization of product rights, trade names and customer relationships are being recorded in selling, general and administrative expense over their respective lives.

As consideration for the license, the Company is required to make substantial payments upon the achievement of certain milestones, totaling up to $ 114.1 million.

In March 2023, the Company capitalized a $ 23.0 million milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) that was triggered upon the accelerated approval of FILSPARI in February 2023.

Pursuant to the Ligand License Agreement, the Company is obligated to pay to Ligand (and BMS) an escalating royalty between 15 % and 17 % of net sales of sparsentan, with payments due quarterly.

The Company began incurring costs associated with such royalties following the February 2023 approval of FILSPARI (sparsentan).

For the year ended December 31, 2023, the Company capitalized $ 4.4 million to intangible assets for royalties owed on net sales of FILSPARI.

The cost of the $ 23.0 million milestone payment and royalty payments are being amortized to selling, general and administration on a straight-line basis through April 30, 2033

Thiola License Agreement

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The additional cost basis is subsequently amortized over the remaining life of the license agreement.

The Company paid Mission an up-front license fee of $ 3 million and during the term of the agreement will pay guaranteed minimum royalties during each calendar year the greater of $ 2 million or twenty percent ( 20 %) of the Company’s net sales of Thiola.

The Company paid Mission an up-front license fee of $ 3.0 million and during the term of the agreement will pay the greater of $ 2.0 million, representing the guaranteed minimum royalty, or 20 % of the Company’s net sales of Thiola during each calendar year.

In November 2017, the Company amended its agreement with Mission to extend the term of the current exclusive U.S.

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In November 2018, the Company amended its agreement with Mission to remove all territorial restrictions on our license.

As consideration for the expanded territory the Company paid an up-front fee of $ 0.3 million and will pay guaranteed minimum royalties equaling the greater of $ 0.1 million or 20 % of our Thiola net sales generated outside of the United States during each calendar year.

As consideration for the expanded territory, the Company paid an up-front fee of $ 0.3 million and will pay the greater of $ 0.1 million, representing the guaranteed minimum, or 20 % of the Company's net sales of Thiola generated outside of the United States during each calendar year.

Upon execution of the amendment, the Company capitalized an additional $ 1.0 million in intangible assets and recorded a guaranteed minimum liability of $ 0.7 million related to this amendment.

The present value of guaranteed minimum royalties payable using a discount rate ranging from approximately 7 % to 11 % based on the Company’s then borrowing rate is $ 9.7 million and $ 11.1 million as of December 31, 2023 and 2022, respectively.

As of December 31, 2022, the guaranteed minimum royalty current and long-term liability was approximately $ 2.1 million and $ 9.0 million, respectively, and is recorded as Other Liability in the Consolidated Balance Sheet.

As of December 31, 2021, the guaranteed minimum royalty current and long-term liability was approximately $ 2.1 million and $ 10.2 million, respectively, and is recorded as Other Liability in the Consolidated Balance Sheet.

As of December 31, 2023, the guaranteed

minimum royalty current and long-term liability was approximately $ 2.1 million and $ 7.6 million, respectively, and is recorded as Other Liability in the Consolidated Balance Sheets.

The Company has capitalized $ 155.6 million related to the Thiola intangible asset which consists of the up-front license fee, professional fees, present value of the guaranteed minimum royalties and any additional payments through December 31, 2023 in excess of minimum royalties.

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Consistent with all prior periods since Thiola was acquired, the Company has not accrued any liability for royalties in excess of the annual contractual minimum at December 31, 2023, as such royalties are not yet probable and estimable.

There are 6.4 years remaining in the term of the license agreement.

Cholbam Asset Purchase

On March 31, 2015, the Company completed its acquisition from Asklepion of all worldwide rights, titles and ownership of Cholbam, including all related contracts, data assets, intellectual property, regulatory assets and the PRV.

The Company capitalized $ 75.9 million and $ 7.3 million for the U.S.

and international economic interest, respectively.

Amortizable intangible assets as of December 31, 2023 ( in thousands ):

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Thiola license 12 $ 155,589 $ ( 77,311 ) $ 78,278

Chenodal product rights 16 67,849 ( 37,175 ) 30,674

Economic interest - Cholbam revenue 10 75,900 ( 58,842 ) 17,058

Ligand license 11 27,448 ( 2,036 ) 25,412

Manchester customer relationships 10 403 ( 353 ) 50

Total amortizable intangible assets $ 183,037 $ ( 79,347 ) $ 103,690

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Thiola license 12 $ 139,383 $ ( 50,324 ) $ 89,059

Chenodal product rights 16 67,849 ( 32,938 ) 34,911

Economic interest - U.S.

revenue Cholbam 10 75,900 ( 51,258 ) 24,642

Ligand license 11 19,400 ( 12,139 ) 7,261

Economic interest - International revenue Cholbam 10 7,982 ( 7,483 ) 499

Manchester customer relationships 10 403 ( 313 ) 90

Internal use software 5 207 ( 199 ) 8

Total amortizable intangible assets $ 158,783 $ ( 62,463 ) $ 96,320

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2023 2022 2021

Research and development $ 6,264 $ 1,158 $ 1,162

Selling, general and administrative $ 29,021 $ 12,339 $ 9,888

Research and development 7,261 6,264 1,158

Total amortization expense $ 36,282 $ 18,603 $ 11,046

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Sales discounts, rebates, and allowances 13,730 13,486

Transition services accrual 12,282 —

Accrued restructuring costs 11,421 —

Selling, general and administrative 7,190 8,791

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Certain of the Company's contractual arrangements with contract manufacturing organizations ("CMOs") require binding forecasts or commitments to purchase minimum amounts for the manufacture of drug product supply, which may be material to the Company's financial statements.

As of December 31, 2022, we have a commitment to purchase $ 36.3 million in active pharmaceutical ingredient, to be delivered in 2023, which is planned to support the commercial launch of FILSPARI.

Contingencies

In October 2021, our Kolbam distributor in France notified us that the French authorities are asking for reimbursement for a portion of Kolbam sales in France during the periods from 2015-2020.

During this period, the Company had aggregate revenues from sales of Kolbam in France of approximately $ 8.0 million.

At this time, the Company is not able to estimate the potential liability that may be incurred, if any.

In November 2020, the Company completed the acquisition of Orphan Technologies Limited (“Orphan”), including Orphan’s rare metabolic disorder drug pegtibatinase.

The Company acquired Orphan by purchasing all of the outstanding shares.

In accordance with ASC 450, contingent cash payments will be accrued for when it is probable that a liability has been incurred and the amount can be reasonably estimated.

As of December 31, 2023, no contingent cash payments have been accrued.

The Company anticipates that it may achieve certain milestones with both FILSPARI and pegtibatinase that will result in the Company making net payments of approximately $ 50.0 million in the next 12 months.

Legal Proceedings

From time to time in the normal course of business, the Company is subject to various legal matters such as threatened or pending claims or litigation.

Although the results of claims and litigation cannot be predicted with certainty, the Company does not believe it is a party to any claim or litigation the outcome of which, if determined adversely to it, would individually or in the aggregate be reasonably expected to have a material adverse effect on its results of operations or financial condition.

Although the results of claims and litigation cannot be predicted with certainty, the Company does not believe it is a party to any claim or litigation in which the outcome, if determined adversely to it, would individually or in the aggregate be reasonably expected to have a material adverse effect on its results of operations or financial condition.

STOCKHOLDERS’ EQUITY

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2018 Equity Incentive Plan

On June 8, 2015, the Company's stockholders approved the 2015 Equity Incentive Plan (the "2015 Plan").

The 2015 Plan is intended as the successor to and continuation of the Company’s 2014 Incentive Compensation Plan.

Stockholders approved 1.4 million new shares to be issued under the 2015 Plan, in addition to 0.6 million unallocated shares remaining available for issuance under the 2014 Incentive Compensation Plan that were added to the 2015 Plan.

Options issued under the 2015 Plan will generally expire ten years from the date of grant and vest over a three-year or four-year period.

On May 18, 2016, the Company's stockholders approved an amendment to the 2015 Plan (the "Amended 2015 Plan").

The amendment provides for an additional 1.6 million new shares to be issued under the Amended 2015 Plan, in addition to 0.7 million unallocated shares remaining available for issuance.

On May 17, 2017, the Company's stockholders approved an amendment to the Amended 2015 Plan.

The amendment provides for an additional 1.8 million new shares to be issued under the Amended 2015 Plan.

2018 Equity Incentive Plan

On May 9, 2018, the Company's stockholders approved the 2018 Equity Incentive Plan (the "2018 Plan").

The 2018 Plan is intended as the successor to and continuation of the Amended 2015 Plan.

Stockholders approved 1.8 million new shares to be issued under the 2018 Plan, in addition to 1.6 million unallocated shares remaining available for issuance under the Amended 2015 Plan that were added to the 2018 Plan.

The Company's 2018 Equity Incentive Plan (the "2018 Plan") is the successor to and continuation of the Company's 2015 Equity Incentive Plan (the "2015 Plan") and the Company's 2014 Equity Incentive Plan (the "2014 Plan", and together with the 2015 Plan, the "Prior Plans").

Unallocated shares under the Prior Plans are no longer available for issuance under the Prior Plans, and have instead been added to the shares available for issuance under the 2018 Plan.

The 2018 Plan, as amended, and including the unallocated shares of the Prior Plans, provides for a total of 15.7 million shares to be issued, plus the Prior Plans' returning shares, if any, which become available for grant under the 2018 Plan from time to time.

Options issued under the 2018 Plan will generally expire ten years from the date of grant and vest over a four-year period.

On May 9, 2019, the Company’s stockholders approved an amendment to the 2018 Plan that increased the number of authorized shares issuable under the 2018 Plan by 2.0 million shares.

On May 15, 2020, the Company's stockholders approved an amendment to the 2018 Plan that increased the number of authorized shares issuable under the 2018 Plan by 2.4 million shares.

On May 14, 2021, the Company’s stockholders approved an amendment to the 2018 Plan that increased the number of authorized shares issuable under the 2018 Plan by 3.2 million shares.

On May 11, 2022, the Company’s stockholders approved an amendment to the 2018 Plan that increased the number of authorized shares issuable under the 2018 Plan by 2.0 million shares.

As of December 31, 2023, there were approximately 4.5 million shares reserved for future issuance under the 2018 Plan.

2017 Employee Stock Purchase Plan

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Beginning on January 1, 2018, and ending on (and including) January 1, 2026, the number of shares of common stock available for issuance under the 2017 ESPP may increase by an amount equal to the lesser of (i) one percent ( 1 %) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year or (ii) 300,000 shares of common stock.

Substantially all employees are eligible to participate and, through payroll deductions, can purchase shares on established dates semi-annually.

Substantially all employees are eligible to participate in the 2017 ESPP and, through payroll deductions, can purchase shares on established dates semi-annually.

The purchase price per share sold pursuant to the 2017 ESPP will be the lower of (i) 85 % of the fair market value of common stock on the first day of the offering period or (ii) 85 % of the fair market value on the purchase date.

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Compensation expense is recognized over the period of service, generally the vesting period.

During the year ended December 31, 2022, 1,746,270 stock options were granted by the Company.

The following weighted average assumptions were used in the Black-Scholes options pricing model to estimate the fair value of stock options for the specified reporting periods:

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Unrecognized compensation cost associated with unvested stock options amounts to $ 24.1 million as of December 31, 2023, which will be expensed over a weighted average remaining vesting period of 2.3 years.

In connection with the retirement of a Board Member, formerly the Chief Executive Officer, the Board of Directors approved a modification to extend the deadline to exercise each stock option held to the earlier of five years or the expiration of the 10-year term of the option.

In connection with the retirement of the Company's former Chief Financial Officer, the Board of Directors approved a modification to extend the deadline to exercise each stock option held to the earlier of three months following the last vesting date or the original expiration date of the option, and to continue vesting on the original schedule of any underlying unvested stock options and restricted stock units.

The modification resulted in incremental compensation cost of $ 2.6 million for the year ended December 31, 2023.

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Performance-based Stock Units

PSUs are subject to vest only if certain specified criteria are achieved.

As of December 31, 2022, there was approximately $ 2.0 million of unrecognized compensation cost related to performance-based stock units ("PSUs") granted.

Performance-based stock units ("PSUs") are subject to vest only if certain specified criteria are achieved.

As of December 31, 2023, there was approximately $ 2.0 million of unrecognized compensation cost related to PSUs granted and deemed probable of vesting.

This amount is expected to be recognized over a weighted average period of 0.9 years.

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Unvested December 31, 2023 175,458 $ 25.61

The fair value of performance-based stock units vested for the years ended December 31, 2022, 2021 and 2020 was $ 0.4 million, $ 1.8 million, and $ 2.3 million, respectively.

The fair value of PSUs vested for the years ended December 31, 2023, 2022 and 2021 was $ 0.3 million, $ 0.4 million, and $ 1.8 million, respectively.

The weighted average grant date fair value for performance-based stock awards granted during the years ended December 31, 2023, 2022 and 2021 was $ 15.46 , $ 25.26 , and $ 15.46 , respectively.

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NET LOSS PER COMMON SHARE

Basic and diluted net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period.

The Company’s potentially dilutive shares, which include outstanding stock options, restricted stock units, and shares issuable upon conversion of the 2025 Notes and 2029 Notes, are considered to be common stock equivalents and are not included in the calculation of diluted net loss per share because their effect is anti-dilutive.

Basic and diluted net income (loss) per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period.

In accordance with ASC 260, Earnings per Share, if a company had a discontinued operation, the company uses income from continuing operations, adjusted for preferred dividend and similar adjustments, as its control number to determine whether potential common shares are dilutive.

As discussed in Note 15, as part of its February 2023 underwritten public offering, the Company issued and sold pre-funded warrants to purchase 1.25 million shares of its common stock at a price to the public of $ 20.9999 per pre-funded warrant.

The pre-funded warrants are exercisable immediately and are exercisable for one share of the Company's common stock.

The exercise price of each pre-funded warrant is $ 0.0001 per share of common stock.

Since the $ 0.0001 price per share represents little consideration and is non-substantive in relation to the $ 20.9999 price per pre-funded warrant and the $ 21.00 price per share of the common stock offered to the public, and as the warrants are immediately exercisable with no further vesting conditions or contingencies associated with them, the shares underlying the warrants are therefore included in the calculation of basic net loss per common share.

The Company’s potentially dilutive shares, which include outstanding stock options, restricted stock units, performance-based stock units, and shares issuable upon conversion of the 2025 Notes and 2029 Notes, are considered to be common stock equivalents and are not included in the calculation of diluted net loss per share because their effect is anti-dilutive.

Basic and diluted net loss per share is calculated as follows (net loss amounts are stated in thousands) :

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2023 2022 2021

Shares Net loss EPS Shares Net loss EPS Shares Net loss EPS

Shares Net (loss) income EPS Shares Net (loss) income EPS Shares Net (loss) income EPS

Continuing operations 74,267,418 $ ( 376,333 ) $ ( 5.07 ) 63,758,515 $ ( 331,468 ) $ ( 5.20 ) 59,832,287 $ ( 217,292 ) $ ( 3.63 )

Discontinued operations 74,267,418 $ 264,934 $ 3.57 63,758,515 $ 52,986 $ 0.83 59,832,287 $ 37,201 $ 0.62

Basic and diluted loss per share 74,267,418 $ ( 111,399 ) $ ( 1.50 ) 63,758,515 $ ( 278,482 ) $ ( 4.37 ) 59,832,287 $ ( 180,091 ) $ ( 3.01 )

For the years ended December 31, 2022, 2021 and 2020, the following shares were excluded because they were anti-dilutive:

For the years ended December 31, 2023, 2022 and 2021, the following weighted-average number of common stock equivalents were excluded because they were anti-dilutive:

For the year ended December 31,

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Options 10,555,550 10,041,249 9,214,188

Restricted stock 2,175,100 1,569,470 1,368,096

Restricted stock units and performance-based stock units 3,417,245 2,175,100 1,569,470

Total anti-dilutive shares 25,670,747 23,085,349 17,897,060

For financial reporting purposes, net loss before income taxes includes the following components ( in thousands ):

For financial reporting purposes, net loss from continuing operations before income taxes includes the following components ( in thousands ):

Year Ended December 31,

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Total $ ( 376,110 ) $ ( 331,155 ) $ ( 216,883 )

*Foreign losses in 2020 include charges relate to IPR&D.

See Note 5 for further discussion.

The components of the provision (benefit) for income taxes, in the Consolidated Statements of Operations are as follows ( in thousands ):

The components of the provision for income taxes, in the Consolidated Statements of Operations are as follows ( in thousands ):

2023 2022 2021

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Foreign — ( 1 ) ( 3 )

313 409 ( 19,359 )

Federal — — —

Total tax provision (benefit) $ 313 $ 409 $ ( 19,359 )

Total tax provision $ 223 $ 313 $ 409

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate expressed as a percentage of loss before income taxes:

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Foreign rate differential 1.29 % 0.81 % 2.72 %

IPR&D — % — % 6.50 %

Federal IRS Audit settlement — % — % 1.62 %

Nondeductible executive compensation 1.50 % 0.41 % 0.40 %

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Return to provision adjustments and other true-ups 4.19 % ( 0.17 ) % 2.00 %

CARES Act-Net operating loss carryback — % — % ( 9.58 ) %

Adoption of ASU 2020-06 — % ( 3.54 ) % — %

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Operating lease right of use assets ( 5,595 ) ( 6,658 )

Convertible debt — ( 11,020 )

Prepaid assets ( 198 ) ( 206 )

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The Company has recorded a valuation allowance of $ 290.7 million as of December 31, 2023 to reflect the estimated amount of deferred tax assets that may not be realized.

The Company increased its valuation allowance by $ 95.1 million and $ 50.5 million for the years ended December 31, 2022 and 2021, respectively.

The Company decreased its valuation allowance by $ 2.7 million for the year ended December 31, 2023, compared to a $ 95.1 million increase for the year ended December 31, 2022.

As of December 31, 2023, the Company had available unused U.S.

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The state NOL carryforwards will begin to expire in 2024 unless previously utilized, except for $ 39.8 million of the state net operating losses that have an indefinite carryforward period.

In addition, at December 31, 2022, the Company had federal orphan drug tax credit carryforwards of $ 82.0 million that begin to expire in 2033 unless utilized, federal research and development tax credit carryforwards of $ 5.4 million that begin to expire in 2033 unless utilized, state research and development tax credit carryforwards of $ 15.2 million, of which $ 1.4 million begin to expire in 2030 unless utilized and $ 13.8 million that have an indefinite carryforward period, and California Competes tax credit carryforwards of $ 2.0 million that begin to expire in 2024.

In addition, at December 31, 2023, the Company had federal orphan drug tax credit carryforwards of $ 86.8 million that begin to expire in 2035 unless utilized, federal research and development tax credit carryforwards of $ 4.8 million that begin to expire in 2033 unless utilized, state research and development tax credit carryforwards of $ 8.0 million that begin to expire in 2030 unless utilized and $ 1.3 million that have an indefinite carryforward period, and California Competes tax credit carryforwards of $ 2.0 million that begin to expire in 2024.

Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company’s federal net operating loss and credit carryforwards may be limited upon a cumulative change in ownership of more than 50% within a three-year period.

The Company completed a study to analyze whether any ownership changes had occurred through December 31, 2021, and determined no ownership changes occurred.

The Company is in the process of updating its analysis of owner shifts to determine whether an ownership change occurred since December 31, 2021.

The Company completed a study to analyze whether any ownership changes had occurred through March 31, 2023, and determined no ownership changes occurred.

The Company is in the process of updating its analysis of owner shifts to determine whether an ownership change occurred since March 31, 2023.

Any change in ownership should not impact the utilization of tax attributes for the year ended December 31, 2023, and due to the Company’s full valuation allowance any subsequent ownership changes will not impact the Company’s effective tax rate.

As of December 31, 2023, the Company had Irish NOL carryforwards of $ 16.1 million which are fully offset by a valuation allowance and have an indefinite life.

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The Company accounts for uncertain tax benefits in accordance with the provisions of ASC 740-10 of the Accounting for Uncertainty in Income Taxes .

As of December 31, 2022, the Company had $ 11.5 million in unrecognized tax benefits of which $ 9.9 million related to orphan drug and research and development tax credits and $ 1.6 million related to net operating loss carryforwards which were recorded as a reduction to the deferred tax assets with a corresponding reduction in the Company’s valuation allowance of $ 11.5 million.

As of December 31, 2023, the Company had $ 22.9 million in unrecognized tax benefits, all of which are related to orphan drug and research and development tax credits and were recorded as a reduction to the deferred tax assets with a corresponding reduction in the Company’s valuation allowance of $ 22.9 million.

To the extent unrecognized tax benefits are recognized at a time when a valuation allowance does not exist, the recognition of the $ 22.9 million tax benefit would reduce the effective tax rate.

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Increase in current period positions 4,871 2,056

Decrease due to settlements with tax authorities ( 310 ) —

Increase in prior period positions 7,383 1,919

Decrease in prior period positions ( 838 ) —

Decrease due to settlements with tax authorities — ( 310 )

Balance as of December 31:

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federal jurisdiction, various state and local, and foreign jurisdictions.

With few exceptions, the Company’s income tax returns are open to examination by federal authorities for the years ended December 31, 2019, and forward, and for state and foreign tax authorities, for the years ended December 31, 2018, and forward.

With few exceptions related to the carryforward of unutilized tax attributes, the Company’s income tax returns are open to examination by federal authorities for the years ended December 31, 2019, and forward, and for state authorities, for the years ended December 31, 2014, and forward.

The Company's Swiss income tax returns are open to examination for the years ended December 31, 2018, and forward and the Company's Irish tax returns are open to examination for the years ended December 31, 2019, and forward.

The Company recognizes interest and penalties as a component of income tax expense.

Interest and penalties for the years ended December 31, 2022 and 2021 were less than $ 0.1 million.

The Company did not recognize any interest or penalties for the year ended December 31, 2023.

Interest and penalties for the years ended December 31, 2022 and 2021 were less than $ 0.1 million.

EQUITY OFFERINGS

Underwritten Public Offering of Common Stock

In February 2023, the Company sold an aggregate of approximately 9.7 million shares of its common stock and pre-funded warrants to purchase 1.25 million shares of its common stock in an underwritten public offering, at a price to the public of $ 21.00 per share of common stock and $ 20.9999 per pre-funded warrant.

The pre-funded warrants are exercisable immediately, subject to certain beneficial ownership limitations which can be modified by the respective holders with at least 61 days' notice, and are exercisable for one share of the Company's common stock.

price of each pre-funded warrant is $ 0.0001 per share of common stock.

The net proceeds to the Company from the offering, after deducting the underwriting discounts and offering expenses, were approximately $ 215.8 million.

The pre-funded warrants were classified as a component of permanent stockholders' equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method.

The pre-funded warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company's common stock and (vi) meet the equity classification criteria.

In addition, such pre-funded warrants do not provide any guarantee of value or return.

The Company valued the pre-funded warrants at issuance, concluding that their sale price approximated their fair value, and allocated the aggregate net proceeds from the sale proportionately to the common stock and prefunded warrants, including approximately $ 24.6 million allocated to the pre-funded warrants and recorded as a component of additional paid-in capital.

In February 2021, the Company sold an aggregate of 7.5 million shares of its common stock in an underwritten public offering, at a price of $ 26.75 per share.

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An additional $ 51.9 million were sold under the Company's effective registration statement on Form S-3 (Registration Statement No.

333-259311), which included $ 20.1 million from the settlement of 701,600 shares under the ATM Agreement in the year ended December 31, 2022.

333-259311), which included $ 20.1 million in the year ended December 31, 2022.

The Company did no t sell any shares under the ATM Agreement during the year ended December 31, 2023.

As of December 31, 2023, an aggregate amount of $ 19.5 million remained eligible for sale under the ATM Agreement.

Authorized Shares of Common Stock

On May 14, 2021, in connection with the Company’s 2021 Annual Meeting of Stockholders, the Company’s stockholders approved, among other matters, a Certificate of Amendment (“Certificate of Amendment”) to the Company’s Certificate of Incorporation to increase the number of shares of common stock authorized for issuance thereunder from 100,000,000 to 200,000,000 .

Effective May 18, 2021, the Certificate of Amendment was filed with the Secretary of State of the State of Delaware.

RETIREMENT PLAN

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(the "Landlord") for office space located in San Diego, California, which was entered into in April 2019 and subsequently amended in May 2020.

Coinciding with the Company's ability to direct the use of the office space, which occurred in phases over 2020, and utilizing a discount rate equal to the Company's estimated incremental borrowing rate, the Company established ROU assets totaling $ 34.6 million and lease liabilities totaling $ 34.5 million.

Coinciding with the Company's ability to direct the use of the office space and utilizing a discount rate equal to the Company's estimated incremental borrowing rate, the Company established ROU assets totaling $ 34.6 million and lease liabilities totaling $ 34.5 million.

The total ROU asset and lease liability at measurement were each offset by lease incentives associated with tenant improvement allowances totaling $ 7.9 million.

The initial term of the office lease ends in August 2028, and the Landlord has granted the Company an option to extend the term of the lease by a period of 5 years.

At this time, it is not reasonably certain that the Company will extend the term of the lease and therefore the renewal period has been excluded from the aforementioned ROU asset and lease liability measurements.

The measurement of the lease term occurs from the February 2021 occupancy date of the office space delivered in September 2020.

The aggregate base rent due over the initial term of the lease is approximately $ 49.5 million.

At lease inception, it was not reasonably certain that the Company will extend the term of the lease and therefore the renewal period has been excluded from the aforementioned ROU asset and lease liability measurements.

The measurement of the lease term occurs from the February 2021 occupancy date of the office space.

The Company also has one operating lease with Esprit Investments Limited for office space located in Dublin, Ireland, which was entered into in October 2022.

The initial term of the office lease ends in September 2027.

The lease provides the option to extend the term of the lease by a period of 5 years, although it is not reasonably certain that the Company will elect this option and therefore the renewal period has been excluded from the initial lease measurement.

The aggregate base rent due over the initial term of the lease is approximately $ 0.5 million.

The lease provides the option to extend the term of the lease by a period of 5 years, although at lease inception, it was not reasonably certain that the Company will elect this option and therefore the renewal period has been excluded from the initial lease measurement.

Utilizing a discount rate equal to the Company's borrowing rate, the Company established an ROU asset and corresponding lease liability of $ 0.4 million.

Following is a schedule of the future minimum rental commitments for our operating leases reconciled to the lease liability and ROU asset as of December 31, 2022 ( in thousands ):

The following is a schedule of the future minimum rental commitments for our operating leases reconciled to the lease liability and ROU asset as of December 31, 2023 ( in thousands ):

December 31, 2023

Thereafter 4,781

Total undiscounted future minimum payments 31,908

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For the year ended December 31, 2023, 2022 and 2021 the Company recorded $ 4.9 million, $ 5.0 million, and $ 4.9 million, respectively, in expense related to operating leases, including amortized tenant improvement allowances.

Discontinued Operations

Sale of Bile Acid Product Portfolio

On August 31, 2023, the Company closed the sale of its bile acid business to Mirum Pharmaceuticals pursuant to the terms of the Purchase Agreement dated July 16, 2023 between the Company and Mirum.

The assets sold consisted of substantially all of the assets primarily related to the Company’s business of development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of the products, Chenodal and Cholbam (also known as Kolbam).

In connection with the Closing, the Company received an upfront cash payment of $ 210.0 million.

Pursuant to the Purchase Agreement, after the Closing, the Company is eligible to receive up to $ 235.0 million upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $ 125.0 million to $ 500.0 million) of the Products.

The Company will recognize the contingent consideration receivable in earnings when the target annual sales for the milestones are met and the contingency is resolved.

The Company's sale of the bile acid business resulted in a gain, net of tax, of $ 226.0 million.

The net gain consists of net consideration, including the upfront payment and the deduction of investment banker fees owed upon the Closing, plus the derecognition of the carrying value of the net liabilities included in the transaction and the immaterial tax due on the sale.

The Company and Mirum have also entered into a transition services agreement ("TSA") pursuant to which the Company has agreed to perform certain services for a period of time following the Closing, with respect to Mirum’s use and operation of the assets purchased in the Purchase Agreement.

The TSA is designed to ensure and facilitate an orderly transfer of business operations, and the consideration to be received by the Company primarily consists of cost reimbursement.

For the year ended December 31, 2023, the Company recognized $ 1.0 million, included in continuing operations within other income (expense), net, of which the Company collected $ 0.6 million as of December 31, 2023.

As part of the TSA, the Company is collecting certain receivables related to purchased assets for a period of time and remitting them to Mirum.

The transition services accrual as of December 31, 2023 was $ 12.3 million, and is included in accrued expenses in the accompanying consolidated balance sheets.

TSA services provided by the Company are not anticipated to last beyond 12 months post-close.

The Company determined that the divestiture represents a strategic shift that will have a major effect on the Company's operations and financial results, and has therefore reflected the bile acid business as a discontinued operation for all periods presented.

Results of discontinued operations are as follows ( in thousands ):

Year Ended December 31,

2023 2022 2021

Net product sales $ 66,164 $ 102,558 $ 95,654

Total revenue 66,164 102,558 95,654

Operating expenses:

Cost of goods sold 1,899 3,172 2,966

Research and development 6,118 8,447 9,169

Selling, general and administrative 19,500 22,686 23,599

Change in fair value of contingent consideration ( 473 ) 15,006 22,260

Total operating expenses 27,044 49,311 57,994

Operating income 39,120 53,247 37,660

Other income (expenses), net:

Interest expense ( 191 ) ( 261 ) ( 459 )

Gain on disposal of discontinued operations, net of tax 226,005 — —

Total other income (expense), net 225,814 ( 261 ) ( 459 )

Income from discontinued operations before income tax 264,934 52,986 37,201

Income tax on discontinued operations — — —

Net income from discontinued operations $ 264,934 $ 52,986 $ 37,201

Assets and liabilities of discontinued operations presented in the Consolidated Balance Sheets as of December 31, 2022 include the following ( in thousands ):

December 31, 2022

Current assets:

Inventory $ 2,399

Prepaid expenses and other current assets 591

Total current assets of discontinued operations 2,990

Intangible assets, net 47,965

Other assets 377

Total assets of discontinued operations $ 51,332

Current liabilities:

Business combination-related contingent consideration, current portion $ 7,000

Total current liabilities of discontinued operations 7,000

Business combination-related contingent consideration, less current portion 64,200

Total liabilities of discontinued operations $ 71,200

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table presents selected consolidated statements of operations data for each quarter for the fiscal years ended December 31, 2023 and 2022 (unaudited, in thousands, except for per share data) :

First Second Third Fourth

For the year ended December 31, 2023:

Total revenue $ 30,888 $ 32,196 $ 37,095 $ 45,059

Total operating expenses 128,257 136,147 129,680 139,292

Operating loss ( 97,369 ) ( 103,951 ) ( 92,585 ) ( 94,233 )

Loss from continuing operations before income tax provision ( 96,486 ) ( 101,867 ) ( 89,229 ) ( 88,528 )

Loss from continuing operations, net of tax ( 96,564 ) ( 101,932 ) ( 89,241 ) ( 88,596 )

Income (loss) from discontinued operations, net of tax 1 10,233 16,302 239,976 ( 1,577 )

Net (loss) income ( 86,331 ) ( 85,630 ) 150,735 ( 90,173 )

(Loss) income per common share - basic and diluted:

Continuing operations $ ( 1.42 ) $ ( 1.34 ) $ ( 1.17 ) $ ( 1.16 )

Discontinued operations 0.15 0.21 3.14 ( 0.02 )

Net (loss) income per common share $ ( 1.27 ) $ ( 1.13 ) $ 1.97 $ ( 1.18 )

For the year ended December 31, 2022:

Total revenue $ 23,412 $ 28,634 $ 28,075 $ 29,339

Total operating expenses 95,393 107,160 110,679 116,041

Operating loss ( 71,981 ) ( 78,526 ) ( 82,604 ) ( 86,702 )

Loss from continuing operations before income tax provision ( 81,694 ) ( 79,970 ) ( 83,918 ) ( 85,573 )

Loss from continuing operations, net of tax ( 81,746 ) ( 80,023 ) ( 84,063 ) ( 85,636 )

Income from discontinued operations, net of tax 1 5,775 12,991 14,407 19,813

Net loss ( 75,971 ) ( 67,032 ) ( 69,656 ) ( 65,823 )

(Loss) income per common share - basic and diluted:

Continuing operations $ ( 1.29 ) $ ( 1.25 ) $ ( 1.31 ) $ ( 1.33 )

Discontinued operations 0.09 0.20 0.22 0.30

Net loss per common share $ ( 1.20 ) $ ( 1.05 ) $ ( 1.09 ) $ ( 1.03 )

1 On August 31, 2023, the Company sold its bile acid business, resulting in a gain, net of tax, of $ 226.0 million.

The Company has reflected the bile acid business as a discontinued operation in the Consolidated Financial Statements for all periods presented.

See Note 19 for results of discontinued operations and further discussion.

SUBSEQUENT EVENTS

Ligand Milestone Payment

Pursuant to the Ligand License Agreement, the Company is obligated to make a $ 23.0 million milestone payment to Ligand (and BMS) in the first quarter of 2023, as a result of the accelerated approval granted to FILSPARI (sparsentan).

Upon payment, the $ 23.0 million will be capitalized as an intangible asset on the Consolidated Balance Sheets.

On January 25, 2024, the Company announced that it has entered into an exclusive licensing agreement with Renalys Pharma, Inc.

("Renalys"), to bring sparsentan, a dual endothelin angiotensin receptor antagonist for the treatment of IgAN, to patients in Japan and other countries in Asia.

Renalys will hold regional rights to sparsentan for Japan, South Korea, Taiwan, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Under the terms of the agreement, Travere will receive an upfront payment and be eligible to receive up to $ 120 million in regulatory, development and sales-based milestone payments.

As part of the collaboration, Travere has obtained a minority equity stake in Renalys and will be eligible to receive tiered royalties on net sales of sparsentan in the licensed territories.

Renalys will be responsible for development, regulatory matters, and commercialization in the licensed territories.

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

What changed 10-K

Item 9A. Controls and Procedures