What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-21 · 120 added, 140 removed, 344 unchanged (43% of the section changed)

14 unchanged sentences

The positive treatment effects on proteinuria compared to the active control irbesartan that were observed at Week 36 were durable out to the two-year measurement period.

Additional results from the PROTECT Study demonstrated the benefit of FILSPARI on absolute eGFR accrued over time and by Week 110 resulted in a 3.8 mL/min/1.73 m 2 difference in the mean change from baseline between FILSPARI and irbesartan.

Additional results from the PROTECT Study demonstrated the

benefit of FILSPARI on absolute eGFR accrued over time and by Week 110 resulted in a 3.8 mL/min/1.73 m 2 difference in the mean change from baseline between FILSPARI and irbesartan.

Results from the PROTECT Study showed that FILSPARI was well tolerated with a clearly defined safety profile that has been consistent across all clinical trials conducted to date.

11 unchanged sentences

It is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial that evaluated the safety and efficacy of 400mg of sparsentan, compared to 300mg of irbesartan, in 404 patients ages 18 years and up with IgAN and persistent proteinuria despite available angiotensin converting enzyme ("ACE") inhibitor or angiotensin receptor blockers ("ARB") therapy, and is currently ongoing in the open label extension phase of the study.

FILSPARI is available only through a risk evaluation and mitigation strategy (REMS) approved by the FDA, regarding mandatory birth control for patients of child-bearing potential regarding risk of embryo-fetal toxicity, as has been required for other approved endothelin antagonists, and a REMS for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.

As part of the liver monitoring REMS, monthly monitoring of each patient is required for the first year the patient is on treatment, and quarterly thereafter.

The Company submitted an sNDA for a potential modification to the frequency of liver monitoring for FILSPARI;

the sNDA has been accepted for review by the FDA and assigned a PDUFA target action date of August 28, 2025.

In April 2024, we and our partner CSL Vifor announced that the European Commission has granted conditional marketing authorization (“CMA”) for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).

The CMA is granted for all member states of the European Union, as well as in Iceland, Liechtenstein and Norway.

The European Commission's decision follows the positive opinion from the Committee for Medicinal Products for Human Use (“CHMP”) in February 2024, based on results from the pivotal Phase 3 PROTECT Study of FILSPARI in IgAN.

Under the terms of our license agreement with CSL Vifor, we will be entitled to receive a regulatory milestone payment of $17.5 million upon receipt of full regulatory approval by the European Commission for IgAN, and we anticipate receiving an additional milestone payment upon achievement of market access initiatives in certain countries.

CSL Vifor submitted an application for full regulatory approval in the second quarter of 2024.

The decision on full regulatory approval, if positive, will convert the CMA to a standard Marketing Authorization (“MA”).

FILSPARI is available only through a risk evaluation and mitigation strategy (REMS) approved by the FDA for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.

Initially, as part of the liver monitoring REMS, monthly monitoring of each patient was required for the first year a patient was on treatment, and quarterly thereafter.

In August 2025, the FDA approved updated REMS labeling, reducing the frequency of liver monitoring to every three months from the onset of treatment and also removing the embryo-fetal toxicity monitoring requirement from the REMS.

In April 2024, we and our partner CSL Vifor announced that the European Commission had granted conditional marketing authorization (“CMA”) for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g), and in April 2025, we and CSL Vifor announced that the European Commission had converted the CMA into a standard marketing authorization (“MA”) for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).

The MA was granted for all member states of the European Union, as well as in Iceland, Liechtenstein and Norway.

As a result of the standard MA approval, we received a regulatory milestone payment of $17.5 million in May 2025 under the terms of the License Agreement.

FILSPARI became commercially available in Europe under the CMA in August 2024, with an initial launch in Germany and Austria.

In October 2024, we and CSL Vifor announced that Swissmedic has granted temporary marketing authorization for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).

In November 2024, the Medicines and Healthcare products Regulatory Agency (MHRA) approved FILSPARI in the United Kingdom.

In April 2025, the MHRA in the UK converted its conditional approval of FILSPARI in IgAN to standard approval.

In the fourth quarter of 2025, we received a $40.0 million market access milestone payment from CSL Vifor.

In January 2024, we announced our entry into an exclusive licensing agreement with Renalys Pharma, Inc.

("Renalys"), to bring sparsentan 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.

Following successful meetings with the Pharmaceuticals and Medical Devices Agency (PMDA) in 2023, in the second quarter of 2024 Renalys initiated an open label registration study of sparsentan in Japan to support potential approval of sparsentan in Japan.

In July 2024, Renalys announced that the first patient was dosed in the study, and in January 2025, Renalys announced achievement of full enrollment in the study.

Results from the urine protein/creatinine ratio (UP/C) endpoint in the study are expected in the second half of 2025 to support a submission for approval to PMDA.

In December 2024, Renalys announced that sparsentan received Orphan Drug Designation from the Japanese Ministry of Health, Labour and Welfare for the indication of primary IgA nephropathy as of November 27, 2024.

Under the terms of the licensing agreement, Renalys will be responsible for development, regulatory matters, and commercialization in the licensed territories.

In the fourth quarter of 2025, Renalys announced positive topline results from its Phase 3 study of sparsentan in Japanese patients with IgAN.

Renalys has also announced that it has reached an agreement with the PMDA regarding development plans for two other Phase 3 clinical trials of sparsentan, one investigating the use of sparsentan in FSGS and the other in Alport syndrome, in Japan.

In the fourth quarter of 2025, Renalys was acquired by and merged into Chugai Pharmaceutical Co., Ltd.

Through the acquisition, Chugai gained exclusive rights to develop and commercialize sparsentan in Japan, South Korea, and Taiwan.

As a minority shareholder in Renalys, we received $10.2 million at the closing of the transaction and we are also eligible to receive multiple milestones according to the progress of sparsentan regulatory approval, and consideration linked to sparsentan's net sales in the applicable territory.

Under the terms of the licensing agreement, Chugai is responsible for development, regulatory matters, and commercialization in the licensed territories.

Chugai plans to file for regulatory approval for sparsentan in Japan in 2026.

Clinical-Stage Programs:

3 unchanged sentences

There are currently no FDA-approved pharmacologic treatments for FSGS and there remains a high unmet need for patients living with FSGS as off-label treatments such as ACE/ARBs, steroids, and immunosuppressant agents are effective in only a subset of patients and use of some of these off-label treatments may be further inhibited by their safety profiles.

Every year approximately 5,400 patients are diagnosed with FSGS and we estimate that there are more than 40,000 FSGS patients in the United States and a similar number in Europe with approximately half of them being candidates for sparsentan.

Every year approximately 5,400 patients are diagnosed with FSGS and we estimate that there are more than 40,000 FSGS patients in the United States and a similar number in Europe.

We believe that there are up to 30,000 FSGS patients in the United States that are potentially addressable with FILSPARI, if approved.

In 2016, we generated positive data from our Phase 2 DUET study in FSGS.

1 unchanged sentence

The DUPLEX Study is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in 371 patients.

The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined

as urine protein-to-creatinine ratio (UPCR) ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.

In February 2021, we announced that the ongoing Phase 3 DUPLEX Study achieved its pre-specified interim FSGS partial remission of proteinuria endpoint following the 36-week interim period.

9 unchanged sentences

In addition, a review of the safety results through 108 weeks of treatment indicate sparsentan was generally well-tolerated and the overall safety profile in the study to date was generally consistent between treatment groups.

In December 2023, we announced that we completed a planned Type C meeting with the FDA to discuss results from the Phase 3 DUPLEX Study of sparsentan in FSGS.

In December 2023, we announced that we had completed a planned Type C meeting with the FDA to discuss 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.

3 unchanged sentences

The principal finding from PARASOL was that in FSGS, reduction in proteinuria over 24 months is strongly associated with a reduction in the risk of kidney failure, and responder definitions based on thresholds of proteinuria are both biologically plausible and strongly supported by epidemiological data.

Following the recent PARASOL public workshop in which a multi-stakeholder group of rare kidney disease experts aligned around a potential proteinuria-based clinical trial endpoint for FSGS, we scheduled a Type C meeting with the FDA to discuss a potential regulatory pathway for a sparsentan FSGS indication.

In February 2025, we announced that we had completed a Type C meeting with the FDA and that we plan to submit an sNDA around the end of the first quarter of 2025 seeking traditional approval of FILSPARI for FSGS.

The sNDA will be based on existing data from the Phase 3 DUPLEX and Phase 2 DUET studies of FILSPARI.

Together with CSL Vifor, we also plan 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, if the MAA for full approval of sparsentan in IgA nephropathy is approved.

Following the PARASOL public workshop in the fourth quarter of 2024, in which a multi-stakeholder group of rare kidney disease experts aligned around a potential proteinuria-based clinical trial endpoint for FSGS, we scheduled a Type C meeting with the FDA to discuss a potential regulatory pathway for a sparsentan FSGS indication.

In February 2025, we announced that we had completed a Type C meeting with the FDA and in March 2025, we announced that we had submitted an sNDA to the FDA seeking traditional approval of FILSPARI for the treatment of FSGS.

In May 2025, we announced that the FDA accepted the sNDA, assigned a PDUFA target action date of January 13, 2026, and initially indicated that it planned to hold an advisory committee meeting to discuss the application.

In September 2025, following further review of the sNDA, the FDA informed us that an advisory committee meeting was no longer needed.

In January 2026, we announced that the FDA extended the review timeline of the sNDA, and that the new PDUFA target action date is April 13, 2026.

The extension followed the recent submission of responses requested by the FDA to further characterize the clinical benefit of FILSPARI.

The FDA determined that the additional responses constituted a Major Amendment to the sNDA and extended the action date accordingly.

The sNDA remains under review by the FDA with a PDUFA target action date of April 13, 2026.

The sNDA is supported by two of the largest and most rigorous head-to-head interventional studies conducted to date in FSGS, the Phase 3 DUPLEX Study and the Phase 2 DUET Study.

In these studies, FILSPARI demonstrated rapid, superior and sustained reductions in proteinuria when compared with maximum labeled dose irbesartan across adult and pediatric patients.

As published in the New England Journal of Medicine, DUPLEX showed statistically significant and clinically meaningful proteinuria remission at 36 weeks that was durable through 2 years.

The treatment

effect of FILSPARI strengthened at more stringent thresholds down to complete remission.

Patients who achieved partial or complete proteinuria remission in the DUPLEX Study, irrespective of the treatment arm, had a 67% to 77% lower risk of kidney failure, respectively.

The results from these studies are in alignment with the findings of the independent PARASOL workgroup that support the importance of proteinuria in FSGS.

If approved, FILSPARI could become the first and only FDA-approved medicine indicated for FSGS.

Together with CSL Vifor and Chugai, we continue to evaluate the potential for a regulatory pathway forward for sparsentan in FSGS in Europe and Japan.

Under the terms of our exclusive license to CSL Vifor, CSL Vifor is responsible for all commercialization activities in its licensed territories.

We remain responsible for the clinical development of sparsentan in the applicable territories.

If sparsentan receives marketing authorization in any of the territories covered by the exclusive license to Renalys, Renalys will be responsible for all development, regulatory matters, and commercialization activities in such licensed territories.

We will retain all rights to sparsentan in the United States and rest of world outside of the territories licensed to CSL Vifor and Renalys, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada, China, Brazil and/or Mexico.

If sparsentan receives marketing authorization in any of the territories covered by the exclusive license to Chugai, Chugai will be responsible for all development, regulatory matters, and commercialization activities in such licensed territories.

We will retain all rights to sparsentan in the United States and rest of world outside of the territories licensed to CSL Vifor and Chugai, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada and/or Mexico.

Pegtibatinase

14 unchanged sentences

In September 2024, we announced a voluntary pause of enrollment in the Phase 3 HARMONY Study.

The voluntary enrollment pause enables us to work to address necessary process improvements in manufacturing scale-up to support commercial scale manufacturing as well as full enrollment in the HARMONY Study.

Patients currently enrolled in pegtibatinase studies continue to receive study medication from small scale batches which are unaffected by the scale-up process.

Currently enrolled patients will be able to continue on study medication as scheduled for the duration of the trials they are participating in.

The voluntary enrollment pause was enacted following our determination that the desired drug substance profile was not achieved in the recent scale-up process.

We are making progress on necessary process improvements in manufacturing scale-up and currently anticipate that we should be in position to restart enrollment in the Phase 3 HARMONY Study in 2026.

The voluntary enrollment pause was enacted following our determination that the desired drug substance profile was not achieved in the initial scale-up process, and it enabled us to address necessary process improvements in manufacturing scale-up to support initial commercial scale manufacturing as well as full enrollment in the HARMONY Study.

Currently enrolled patients will be able to continue on study medication as scheduled for the duration of the trials in which they are participating.

Following further optimization of the manufacturing process in 2025, we restarted enrollment activities for the pivotal Phase 3 HARMONY Study in the first quarter of 2026.

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

Preclinical Program:

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

Other Commercial Products:

13 unchanged sentences

These generic versions of the original formulation of Thiola have impacted our sales, and these or additional generic versions of either formulation could have a material adverse impact on sales.

As of December 31, 2024, several generic options for the 100mg and 300mg versions of Thiola EC have been approved by the FDA and become available.

To date, several generic options for the 100mg and 300mg versions of Thiola EC have been approved by the FDA and become available.

Accordingly, Thiola EC is subject to generic competitio n.

Sale of Bile Acid Product Portfolio

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

In July 2023, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Mirum Pharmaceuticals, Inc.

("Mirum Pharmaceuticals" or “Mirum”), pursuant to which Mirum agreed to purchase substantially all of the assets primarily related to our 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, we consummated the transactions contemplated by the Purchase Agreement (the "Closing").

In August 2023, we consummated the transactions contemplated by the Purchase Agreement (the "Closing").

In connection with the Closing, we received an upfront cash payment of $210.0 million.

Pursuant to the Purchase Agreement, after the Closing, we are 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.

A $226.0 million gain, net of tax, was recognized on the transaction as a component of net income from discontinued operations in the Consolidated Statements of Operations.

Mirum achieved the first such milestone based on its annual net sales in 2025, we recognized a milestone payment of $25.0 million during 2025, and expect to receive payment in the second quarter of 2026, as a result of such achievement.

For the year ended December 31, 2023 we recognized a $226.0 million gain, net of tax, on the transaction as a component of net income from discontinued operations in the Consolidated Statements of Operations.

The bile acid business has been classified as a discontinued operation for all periods presented and is excluded from the following discussion of the results of our continuing operations in the results of operations.

3 unchanged sentences

These restructuring adjustments are expected to result in an estimated annualized savings of approximately $25.0 million beginning in 2024.

As of December 31, 2024, we have incurred total non-recurring charges of $13.8 million in connection with the restructuring, and are no longer incurring restructuring expenses.

As of December 31, 2024, we had recognized total costs of $13.8 million in connection with the restructuring and no such expenses were incurred for the year ended December 31, 2025.

Critical Accounting Estimates

19 unchanged sentences

These provisions are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable (if the amount is payable to the customer) or as a current liability (if the amount is payable to a party other than a customer).

Calculating these provisions involves estimates and judgements.

Calculating these provisions involves estimates and judgments.

Where appropriate, these reserves take into consideration our historical experience, current contractual and statutory requirements and specific known market events and trends.

22 unchanged sentences

Payments received under collaboration and licensing agreements may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements and royalties on the sale of products.

At the inception of arrangements that include milestone payments, we use judgement to evaluate whether the milestones are probable of being achieved and estimates the amount to include in the transaction price utilizing the most likely amount method.

At the inception of arrangements that include milestone payments, we use judgment to evaluate whether the milestones are probable of being achieved and estimates the amount to include in the transaction price utilizing the most likely amount method.

If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price.

1 unchanged sentence

At the end of each reporting period, we re-evaluate the probability of achievement of development milestones and any related constraint and adjust the estimate of the overall transaction price, if necessary.

As of December 31, 2024, our evaluation concluded that all such milestones associated with our collaboration and licensing agreements remained constrained and therefore no adjustment to the respective transaction price was necessary.

Our evaluation concluded that all such milestones not recognized as of December 31, 2025 associated with our collaboration and licensing agreements remained constrained and therefore no adjustment to the respective transaction price was necessary.

We recognize 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.

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

We utilize significant judgment to develop estimates of the stand-alone selling price for each distinct performance obligation based upon the relative stand-alone selling price.

Variable consideration that relates specifically to our efforts to satisfy specific performance obligations is allocated entirely to those performance obligations.

The stand-alone selling price for license-related performance obligations requires judgement in developing assumptions to project probability-weighted cash flows based upon estimates of forecasted revenues, clinical and regulatory timelines and discount rates.

The stand-alone selling price for license-related performance obligations requires judgment in developing assumptions to project probability-weighted cash flows based upon estimates of forecasted revenues, clinical and regulatory timelines and discount rates.

The stand-alone selling price for clinical development performance obligations is based on forecasted expected costs of satisfying a performance obligation plus an appropriate margin.

8 unchanged sentences

We evaluate these cost estimates and the progress each reporting period and adjust the measure of progress, if necessary.

Changes in assumptions where management utilizes significant judgement could have a material impact on the revenue we recognize.

Changes in assumptions where management utilizes significant judgment could have a material impact on the revenue we recognize.

Clinical Trial Expenses

3 unchanged sentences

Expenses related to clinical trials are accrued based on our estimates of the progress of services performed, including actual level of patient enrollment, completion of patient studies and progress of the clinical trials or the delivery of goods.

We currently have four Phase 3 clinical trials in

process that are in varying stages of activity, with ongoing non-clinical support trials that are significant and changes in estimates could have a material impact on expenses we recognize.

Impairment of Intangible Assets subject to amortization

Intangible assets subject to amortization include certain license agreements and purchased technologies.

Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable and are also reviewed annually to determine whether any impairment is necessary.

We are subject to generic competition, and if additional generic versions of Thiola and Thiola EC, any generic versions of FILSPARI following the expiration of patent or regulatory exclusivity for the product, or any of our current or future products, are approved, sales of that product likely would be negatively impacted, which could have a material adverse impact on the recoverability of certain related intangible assets.

Generic versions of Thiola and Thiola EC have been approved, and these or additional generic versions of either formulation could have a material adverse impact on sales and the recoverability of the intangible assets depending on the timing of the market entry and the related impact on net sales.

The assumptions we use represent our best estimates of the activity and expenses at the time of our accrual and involve inherent uncertainties and the application of our judgment.

Upon settlement, these costs may differ materially from the amounts accrued in our consolidated financial statements.

Our historical accrual estimates have not been materially different from our actual amounts.

We currently have four Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials that are significant and changes in estimates could have a material impact on expenses we recognize.

Recently Issued Accounting Pronouncements

12 unchanged sentences

Net product sales

The $99.2 million increase in total net product revenues for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to growth in sales of FILSPARI, including a full twelve months of sales in 2024, following the February 2023 launch.

The decrease in net sales of our tiopronin products was a driven by increased competition.

The $183.8 million increase in total net product sales for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to growth in sales of FILSPARI.

The decrease in net sales of our tiopronin products was driven by increased competition.

License and collaboration revenue

The decrease in license and collaboration revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a $8.5 million decrease in collaboration revenue associated with the CSL Vifor License Agreement due to a decrease in amortization of deferred revenue, and the $3.3 million sale of active pharmaceutical ingredients to CSL Vifor in March 2023.

We estimate that the remainder of the deferred revenue balance associated with these clinical development activities, $2.8 million, will be fully realized by mid-2025.

We recognize costs for clinical development activities in research and development;

costs related to sale of active pharmaceutical ingredients are recognized in cost of goods sold.

The $73.8 million increase in license and collaboration revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to market access and regulatory milestones totaling $57.5 million associated with CSL Vifor, recognition of Renalys deferred revenue of $9.3 million, $5.9 million for royalties earned in 2025 on net sales of FILSPARI and sales totaling $4.7 million of active pharmaceutical ingredients to CSL Vifor.

We recognize costs related to the sale of active pharmaceutical ingredients in cost of goods sold.

Operating Expenses

14 unchanged sentences

For the year ended December 31, 2025, sales of FILSPARI primarily consisted of zero-cost inventories, and therefore cost of goods sold did not increase proportionally to the increase in product sales.

As of December 31, 2024, we had $2.3 million of zero-cost inventory remaining, the majority of which we expect will be consumed in 2025.

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

At December 31, 2023, our 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 sold included a $2.1 million write-down of inventory balances and $1.1 million accrued for firm purchase commitments.

For the year ended December 31, 2024 compared to the year ended December 31, 2023, our cost of goods sold - license and collaboration decreased by $2.7 million, primarily due to the sale of active pharmaceutical ingredients to CSL Vifor in the first quarter of 2023.

As of December 31, 2025 the zero-cost inventory remaining was immaterial.

For the year ended December 31, 2025 compared to the year ended December 31, 2024, our cost of goods sold - license and collaboration increased by $4.2 million, primarily due to the sale of active pharmaceutical ingredients to CSL Vifor in 2025.

Research and development expenses

6 unchanged sentences

We currently have four Phase 3 clinical trials in process that are in various stages of activity, with ongoing non-clinical support trials.

As such, clinical trial expenses will vary depending on the all the factors set forth above and may fluctuate significantly from quarter to quarter and year to year.

As such, clinical trial expenses will vary depending on all the factors set forth above and may fluctuate significantly from quarter to quarter and year to year.

We routinely engage vendors and service providers for scientific research, clinical trial, regulatory compliance, manufacturing and other consulting services.

12 unchanged sentences

For the year ended December 31, 2025 compared to the year ended December 31, 2024, our research and development expenses decreased by $11.5 million.

Internal personnel costs to support all programs decreased by $10.8 million, primarily as a result of restructuring initiatives.

External service provider costs decreased by $16.7 million, which was largely driven by a decrease in costs associated with the development of sparsentan as our Phase 3 programs advance towards completion, offset by an increase in costs associated with the development of pegtibatinase following the December 2023 initiation of the Phase 3 HARMONY Study.

External service provider costs decreased by $17.7 million, which was largely driven by a decrease in costs associated with the development of pegtibatinase due to the pause of the HARMONY Study in September 2024 and a decrease in costs associated with the development of sparsentan as our Phase 3 programs advance towards completion.

Internal personnel costs to support all programs increased by $6.2 million.

Selling, general and administrative expenses

Selling, general and administrative expenses consist of salaries and bonuses, benefits, non-cash share-based compensation, legal and other professional fees, rent, depreciation and amortization, travel, insurance, business development, sales and marketing programs, and other operating expenses.

For the year ended December 31, 2025 compared to the year ended December 31, 2024, our selling, general and administrative expenses increased by $73.1 million, primarily as a result of an increase in intangible asset amortization from capitalized FILSPARI royalties, an increase in commercial investment to support FILSPARI in IgAN following full approval by the FDA in September 2024 and commercial investments in preparation for the potential launch of FSGS, if approved.

In-process research and development expense

1 unchanged sentence

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

Restructuring expenses

In December 2023, we implemented an approximate 20% workforce reduction focused on non-field-based employees in an effort to align our resources on the ongoing FILSPARI launch and the pivotal Phase 3 HARMONY Study to support the potential approval of pegtibatinase as the first potential disease-modifying treatment for HCU.

These restructuring initiatives were expected to result in an estimated non-recurring charge of approximately $12.0 million to $14.0 million, the majority of which was recognized in the fourth quarter of 2023.

Of the $13.8 million recognized to date, $2.4 million was recognized during the year ended December 31, 2024, including $1.2 million related to impairment and disposal costs and initial direct costs to obtain a sublease.

Restructuring costs were primarily comprised of one-time termination benefits, including severance, continuation of health insurance coverage, and other benefits for a specified period of time.

In 2024, we recognized charges for impairment of operating lease right-of-use assets and related leasehold improvements, as well as disposal costs on furniture and fixtures associated with available office space that we decided to sublease as a result of the reduction in occupancy.

As of December 31, 2024, we are no longer incurring restructuring expenses.

Other Income/Expenses

Other income/expenses consists of interest income and expense, finance expense and miscellaneous other income/expenses.

Other income/expenses consist of interest income and expense, finance expense and miscellaneous other income/expenses.

The following table provides information regarding other income (expenses) ( in thousands ):

3 unchanged sentences

Interest expense (10,748) (11,182) 434

Other (expense) income, net (3,318) 1,594 (4,912)

Total other income (expense), net $ 3,317 $ 12,028 $ (8,711)

The $8.7 million change in our total other income (expense), net for the year ended December 31, 2024 compared to the year ended December 31, 2023, is primarily attributable to a $4.0 million decrease in interest income in 2024.

Additionally, for the year ended December 31, 2024, we recognized $3.4 million in other expense in connection with our equity investment in Renalys, related to its characterization as IPR&D as measured at inception.

Other income (expense), net 11,578 (3,318) 14,896

Total other income, net $ 13,551 $ 3,317 $ 10,234

The $10.2 million change in our total other income, net for the year ended December 31, 2025 compared to the year ended December 31, 2024, is primarily attributable to a $10.2 million gain on the sale of our equity investment in Renalys to Chugai during the year ended December 31, 2025.

Discontinued Operations

2 unchanged sentences

2025 2024 Change

(Loss) income from discontinued operations, net of tax $ (915) $ 264,934 $ (265,849)

The $265.8 million change in (loss) income from discontinued operations, net of tax for the year ended December 31, 2024 compared to the year ended December 31, 2023 is primarily due to the August 31, 2023 sale of our bile acid business, which resulted in a gain, net of tax, of $226.0 million.

The 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.

Income (loss) from discontinued operations, net of tax $ 24,715 $ (915) $ 25,630

The $25.6 million change in income (loss) from discontinued operations, net of tax for the year ended December 31, 2025 compared to the year ended December 31, 2024 is due to the recognition of a $25.0 million sales milestone from Mirum related to the achievement of an annual net sales milestone in 2025.

See Note 19 to our Consolidated Financial Statements for further discussion.

2 unchanged sentences

We experienced significant growth in recent years in the number of our employees and the scope of our operations.

We also expanded our sales and marketing, compliance and legal functions in addition to expansion of all functions to support a commercial organization, including by adding additional members to our sales force in connection with the recent commercial launch of FILSPARI in the United States for IgAN.

We also expanded our sales and marketing, compliance and legal functions in addition to expansion of all functions to support a commercial organization, including by adding additional members to our sales force in connection with the commercial launch of FILSPARI in the United States for IgAN and for the potential commercial launch of FILSPARI in the United States for FSGS, if approved.

We believe that our available cash and short-term investments as of the date of this filing, together with anticipated cash generated from operations, will be sufficient to fund our anticipated level of operations beyond the next 12 months from the date of this filing.

We expect that our operating results will vary from quarter-to-quarter and year-to-year depending upon various factors including revenues, selling, general and administrative expenses, and research and development expenses, particularly with respect to our clinical and preclinical development activities.

Our ability to fund our operations in subsequent years will depend upon certain factors which are beyond our control and may require us to obtain additional debt or equity capital or refinance all or a portion of our debt, including the 2025 Notes and 2029 Notes, on or before maturity.

Though we generate revenues from product sales arrangements, we may incur significant operating losses over the next several years.

Our ability to achieve profitable operations in the future will depend in large part upon completing development of products in our pipeline, obtaining regulatory approvals for these products and bringing these products to market, along with potential in-licensing of additional products approved by the FDA and selling and manufacturing these products.

Though we generate revenues from product sales, we may incur significant operating losses over the next several years.

For the years ended December 31, 2025 and 2024, we had the following balances and financial performance ( in thousands ):

December 31, 2024 December 31, 2023

Year Ended December 31,

Cash and cash equivalents $ 93,035 $ 58,535

8 unchanged sentences

As of December 31, 2025, we had cash and cash equivalents of $93.0 million and available-for-sale marketable debt securities of $229.8 million.

Substantial sources of funds since the beginning of 2024, as summarized further below, include net proceeds of $134.7 million from an underwritten public offering of our common stock.

Over the next 12 months, our expected financial obligations include, but are not limited to, funding our operations, operating lease payments, interest payments on our outstanding debt, anticipated milestone payments, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, expenses associated with the launch of FILSPARI and the anticipated repayment of the outstanding principal of approximately $68.9 million on the 2025 Notes which mature on September 15, 2025.

Sources of cash over this period include net revenues from sales of our products, the sale or maturity of investments in our portfolio of marketable debt securities, and certain earned and potential milestone payments.

We anticipate achieving milestones with FILSPARI that will result in us receiving payments of approximately $17.5 million during the next 12 months, with the potential for additional milestone payments depending on timing and outcomes that are currently uncertain.

Substantial sources of funds since the beginning of 2025, as summarized further below, include milestone payments from CSL Vifor totaling $57.5 million and $10.2 million from the sale of Renalys stock to Chugai.

Over the next 12 months, our expected financial obligations include, but are not limited to, funding our operations, operating lease payments, interest payments on our outstanding debt, anticipated milestone payments, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, expenses associated with the ongoing launch of FILSPARI and expenses associated with the preparations for a potential commercial launch of FILSPARI in FSGS.

Sources of cash over this period include net revenues from sales of our products, the sale or maturity of investments in our portfolio of marketable debt securities, FILSPARI royalties and certain earned and potential milestone payments.

Beyond the next 12 months and over the foreseeable future, our known commitments and potential financial obligations will likely include ongoing operations funding, operating lease payments, interest payments on our outstanding debt, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, milestone and royalty payments associated with FILSPARI, pegtibatinase, and other developmental programs based upon the achievement of certain agreement-specific criteria, along with sales-based royalties and the repayment of principal on the outstanding 2029 Notes, which mature on September 1, 2029.

Potential sources of cash over this time horizon may include net revenues from sales of our existing products and, if commercialized, our pipeline products, licensing revenue, the sale or maturity of marketable debt securities in our investment portfolio, the refinancing of all or a portion of our debt, on or before maturity, or the issuance of additional debt or equity.

In addition, depending on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors, we may also from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.

We may not be able to successfully conduct financing or refinancing activity on favorable terms or at all.

2 unchanged sentences

In July 2023, we entered into the Purchase Agreement with Mirum, pursuant to which Mirum agreed to purchase substantially all of the assets primarily related to our business of development, manufacture and commercialization of the Products, which comprised our bile acid business.

Upon the Closing of the transaction on August 31, 2023, we received an upfront cash payment of $210.0 million.

Upon the Closing of the transaction in August 2023, we received an upfront cash payment of $210.0 million.

Pursuant to the Purchase Agreement, we are 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.

Collaboration and License Proceeds

Mirum achieved the first such milestone based on its annual net sales in 2025, and we expect to receive a milestone payment of $25.0 million in the second quarter of 2026, as a result of such achievement.

License and Collaboration Agreement with CSL Vifor

In September, 2021, we entered into a License Agreement with CSL Vifor, pursuant to which we granted an exclusive license to CSL Vifor for the commercialization of sparsentan in the Licensed Territories.

In September, 2021, we entered into a license agreement with CSL Vifor, pursuant to which we granted an exclusive license to CSL Vifor for the commercialization of FILSPARI in the licensed territories.

Under the terms of the license agreement, we will be eligible for up to $135.0 million in aggregate regulatory and market access related milestone payments and up to $655.0 million in aggregate sales-based milestone payments for a total potential value of up to $845.0 million.

Through December 31, 2025, we have received milestone payments totaling $57.5 million associated with the license agreement.

We are also entitled to receive tiered double-digit royalties of up to 40 percent of annual net sales of sparsentan in the licensed territories.

See Note 4 to Consolidated Financial Statements for further discussion.

Licensing Agreement with Renalys

Licensing Agreement with Chugai

In January 2024, our license agreement with Renalys Pharma, Inc.

came into effect.

Under the terms of the agreement, we granted an exclusive license to Renalys for the commercialization of sparsentan in Japan and other countries in Asia.

Pursuant to the terms of the agreement, we are eligible to receive up to $120.0 million in regulatory, development and sales-based milestone payments.

Under the terms of the agreement, we granted an exclusive license to Renalys for the development and commercialization of sparsentan in Japan and other specified countries in Asia.

Pursuant to the terms of the agreement, we are eligible to receive up to $120.0 million in aggregate regulatory, development and sales-based milestone payments.

We are also entitled to receive tiered double-digit to mid-20 percent royalties of annual net sales of sparsentan in the licensed territories.

In addition, we received an option to purchase shares of common stock of Renalys (“Option Agreement”), which we exercised in January 2024.

We also have the option to purchase all equity securities of Renalys at any time prior to the top-line results of the Phase 3 trial in Japan (“Buyout Right”).

In addition, we received an option to purchase shares of common stock of Renalys, which we exercised in January 2024.

In the fourth quarter of 2025, Renalys was acquired by and merged into Chugai.

Through the acquisition, Chugai gained exclusive rights to develop and commercialize sparsentan in Japan, South Korea, and Taiwan.

Under the terms of the licensing agreement, Chugai is responsible for development, regulatory matters, and commercialization in the licensed territories.

See Note 4 to Consolidated Financial Statements for further discussion.

Equity Offerings

1 unchanged sentence

In November 2024, we sold an aggregate of approximately 9.0 million shares of our common stock in an underwritten public offering, at a price to the public of $16.00 per share of common stock.

The net proceeds to us from the offering, after deducting the underwriting discounts and offering expenses, were approximately $134.7 million.

The net proceeds from the offering, after deducting the underwriting discounts and offering expenses, were approximately $134.7 million.

2023 Underwritten Public Offering of Common Stock

7 unchanged sentences

333-281194), pursuant to which we may offer and sell, from time to time through Jefferies LLC, as agent (“Jefferies”), up to $100.0 million of our common stock pursuant to an Amended and Restated Open Market Sale Agreement ("ATM Agreement") with Jefferies dated October 2024.

We did not sell any shares under the ATM Agreement during the year ended December 31, 2024.

We have not sold any shares under the ATM Agreement.

Operating Leases

Future Minimum Rental Commitments

As of December 31, 2024, we have future minimum rental commitments totaling $25.4 million arising from our operating leases.

As of December 31, 2025, we have future minimum rental commitments totaling $18.5 million arising from our operating lease and sublease income totaling $3.5 million.

These commitments represent the aggregate base rent through August 2028.

6 unchanged sentences

In 2012, we entered into an agreement with Ligand Pharmaceuticals, Inc.

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

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

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

Through December 31, 2024, we have capitalized $47.2 million for contractual milestones achieved under the Ligand License Agreement, which includes a $5.8 million regulatory milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) in the second quarter of 2024.

Following commercialization of sparsentan or any products containing related compounds, we are obligated to pay to Ligand an escalating royalty between 15% and 17% of net sales of all such products, with payments due quarterly.

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

For the year ended December 31, 2024, we capitalized $20.3 million to intangible assets for royalties owed on net sales of FILSPARI.

Through December 31, 2025, we have paid $47.2 million for contractual milestones achieved under the Ligand License Agreement.

Pursuant to the terms of the Ligand License Agreement, we are obligated to pay to Ligand an escalating royalty between 15% and 17% of net sales of FILSPARI and any other products containing FILSPARI or related compounds, with payments due quarterly.

We began incurring costs associated with such royalties following the February 2023 approval of FILSPARI.

The Ligand License Agreement will continue until neither party has any further payment obligations under the agreement and is expected to continue for up to 20 years from the effective date.

Ligand may terminate the Ligand License Agreement due to (i) our insolvency, (ii) our material uncured breach of the agreement, (iii) our failure to use commercially reasonable efforts to develop and commercialize sparsentan as described above or (iv) certain other conditions.

Ligand may terminate the Ligand License Agreement due to (i) our insolvency, (ii) our material uncured breach of the agreement, (iii) our failure to use commercially reasonable efforts to develop and commercialize FILSPARI as described above or (iv) certain other conditions.

We may terminate the Ligand License Agreement due to a material uncured breach of the agreement by Ligand.

9 unchanged sentences

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.

We made a $65.0 million payment to Orphan in the second quarter of 2024 following the achievement of a development milestone.

Stock Purchase and Collaboration Agreement with PharmaKrysto

On March 8, 2022, we entered into a Collaboration Agreement with PharmaKrysto Limited (“PharmaKrysto”), a privately held pre-clinical stage company related to PharmaKrysto's early-stage cystinuria discovery program, and concurrently therewith entered into a Stock Purchase Agreement with PharmaKrysto (together, the "Agreements").

Pursuant to the terms of the Agreements, we acquired 5% of the outstanding common shares and are required to purchase an additional 5% of the outstanding common shares for $1.0 million upon the occurrence of a specified pre-clinical milestone.

The Agreements also require us to fund all research and development expenses for the pre-clinical activities associated with the cystinuria program, which are expected to be approximately $5.0 million.

In addition, the Agreements grant us an option 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 we elect to exercise the option, we would be required to perform commercially reasonable clinical diligence obligations.

In addition, we 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.

We have the right to terminate the Agreements and sell the shares back for a nominal payment at any time upon 60 days' notice, subject to survival of contingent obligations, if any.

See Note 5 to Consolidated Financial Statements for further discussion.

We made a $65.0 million payment in the second quarter of 2024 following the achievement of a development milestone.

French Rebate Accrual

In October 2021, our distributor in France for our previously marketed product Kolbam informed us that they had received a notice that the price previously paid for Kolbam during its period on the market in France had been recalculated by the agency responsible for pharmaceutical pricing in France.

As of December 31, 2023, $5.4 million for estimated amounts to be repaid was recorded in Accrued Expenses in the Consolidated Balance Sheets.

In October 2024, we received an invoice from the government authority in the amount of $6.2 million (€5.6 million) for reimbursement of amounts previously paid for Kolbam, which we paid in November 2024.

We have appealed the pricing decision and will pursue an appeal of the amount paid with the Competent Administrative Court.

In October 2024, we received an invoice from the government authority in the amount of approximately $6.2 million for reimbursement of amounts previously paid for Kolbam, which we paid in November 2024.

We have appealed the pricing decision and will pursue an appeal of the amount owed with the Competent Administrative Court.

Convertible Senior Notes Due 2029

4 unchanged sentences

The 2029 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by us.

Convertible Senior Notes Due 2025

On September 10, 2018, we completed a registered underwritten public offering of $276.0 million aggregate principal amount of 2.50% Convertible Senior Notes due 2025 ("2025 Notes"), and entered into a base indenture and supplemental indenture agreement ("2025 Indenture") with respect to the 2025 Notes.

The 2025 Notes will mature on September 15, 2025, unless earlier repurchased, redeemed, or converted.

The 2025 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 2.50%, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2019.

On March 11, 2022, coinciding with the issuance of the 2029 Notes, we completed our repurchase of $207.1 million aggregate principal amount of 2025 Notes for cash.

After giving effect to the repurchase, the total remaining principal amount outstanding under the 2025 Notes as of December 31, 2024 was $68.9 million.

The 2025 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by us.

See Note 7 to Consolidated Financial Statements for further discussion.

8 unchanged sentences

• our ability to successfully commercialize FILSPARI for the treatment of IgAN, and to obtain regulatory approval for, and successfully commercialize, sparsentan for FSGS and our other or future product candidates;

• increases or decreases in revenue from our marketed products, including decreases in revenue resulting from generic entrants or health epidemics or pandemics;

• debt service obligations on the 2025 Notes and 2029 Notes;

• increases or decreases in revenue from our marketed products, including decreases in revenue resulting from generic entrants, changes in reimbursement or rebates, and/or health epidemics or pandemics;

• payment obligations related to the 2029 Notes;

• the number and development requirements of other product candidates that we pursue;

5 unchanged sentences

• the emergence of competing technologies or other adverse market or technological developments;

• the potential impacts of actions taken by the current administration, including but not limited to tariffs and changes at the FDA and other government agencies;

• the impacts of inflation and resulting cost increases.

4 unchanged sentences

2025 2024 2023

Net cash used in operating activities - continuing operations $ (230,024) $ (325,357) $ (260,846)

Net cash provided by (used in) operating activities - continuing operations $ 37,784 $ (230,024) $ (325,357)

Net cash provided by (used in) investing activities - continuing operations 27,892 99,325 (151,626)

Net cash provided by financing activities - continuing operations 139,422 220,134 120,052

Cash flows from continuing operations 8,723 (256,849) (173,347)

Cash flows from discontinued operations (7,451) 251,356 72,076

Net cash (used in) provided by financing activities - continuing operations (33,467) 139,422 220,134

Cash flows provided by (used in) continuing operations 32,209 8,723 (256,849)

Cash flows (used in) provided by discontinued operations — (7,451) 251,356

Effect of exchange rate changes on cash 2,291 (913) 1,981

7 unchanged sentences

Cash Flows from Operating Activities

Cash used in operating activities from continuing operations for the year ended December 31, 2024 was $230.0 million compared to cash used of $325.4 million for the year ended December 31, 2023.

The decrease in cash used was due to a $99.2 million increase in total net product sales, along with a decrease in operational spending as a result of the restructuring plan initiated in December 2023.

Cash provided by operating activities from continuing operations for the year ended December 31, 2025 was $37.8 million compared to cash used of $230.0 million for the year ended December 31, 2024.

The change in cash provided was due to a $183.8 million increase in total net product sales, and an increase in license and collaboration revenue of $73.8 million.

Cash Flows from Investing Activities

Cash provided by investing activities from continuing operations for the year ended December 31, 2025 was $27.9 million compared to cash provided of $99.3 million for the year ended December 31, 2024.

The change was due to a decrease in net purchases of marketable debt securities, offset by a $65.0 million payment to Orphan in the second quarter of 2024 following the achievement of a development milestone.

The change was due to a decrease in net proceeds from the sale and maturity of marketable debt securities and an increase in the purchase of intangible assets, offset by a $65.0 million payment to Orphan in the second quarter of 2024 following the achievement of a development milestone.

Cash Flows from Financing Activities

Cash provided by financing activities from continuing operations for the year ended December 31, 2024 was $139.4 million compared to cash provided of $220.1 million for the year ended December 31, 2023.

The change was due to the November 2024 issuance of common stock through an underwritten public offering that provided $134.7 million in net proceeds, compared to $215.8 million in net proceeds from the March 2023 issuance of common stock and pre-funded warrants.

Cash used in financing activities from continuing operations for the year ended December 31, 2025 was $33.5 million compared to cash provided of $139.4 million for the year ended December 31, 2024.

The change was due to the $68.9 million repayment of convertible notes upon maturity in September 2025 and the November 2024 issuance of common stock through an underwritten public offering that provided $134.7 million in net proceeds.

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 7. Management’s Discussion and Analysis