Unicycive Therapeutics, Inc. 10-K

ITEM 1. BUSINESS Overview We are a biotechnology company dedicated to developing treatments for certain medical conditions. Currently, two of our programs are focused on kidney disease, an area we believe we have the potential to offer medical benefit. As we grow the company and build our team, we intend to focus on identifying medical conditions within and outside of kidney disease. Our current development programs are focused on two novel therapies: Oxylanthanum Carbonate, for treatment of hyperphosphatemia in patients with chronic kidney disease on dialysis, and UNI 494, for treatment of acute kidney injury (AKI). Oxylanthanum Carbonate and UNI 494 were initially developed by and licensed to us from Spectrum Pharmaceuticals (“Spectrum”) and Sphaera Pharma, respectively. Spectrum conducted a Phase 1 clinical trial with Oxylanthanum Carbonate in 2012, prior to the grant of our license in 2018. Sphaera conceived and performed initial characterization of various potential pro-drug linkers, including the initial patent application, and performed some initial physiochemical characterization and preliminary animal pharmacokinetic studies. As discussed herein, after completing IND enabling preclinical studies, we have conducted a Phase I clinical study in healthy volunteers with UNI 494 in 2023. Chronic kidney disease (CKD) is the gradual loss of kidney (renal) function that can get worse over time leading to lasting damage and possibly Stage 5 or end-stage renal disease (ESRD). Our initial focus is on developing drugs and getting them approved in the U.S., and then to partner with global biopharmaceutical companies in the rest of the world. According to the United States Renal Data System (USRDS) 2022 Annual Data Report, 30 million (14%) of adults in the United States are estimated to have CKD and, of these, approximately 13 million patients have advanced CKD (stage 3-5). Approximately 550,000 patients (ESRD) are on dialysis and of those, approximately 450,000 patients (~80%) take phosphate binders to control hyperphosphatemia hyperphosphatemia (too much phosphorus in their blood). The number of patients with ESRD in the U.S. is increasing steadily and is projected to reach between 971,000 and 1,259,000 patients in 2030. AKI is a sudden episode of kidney failure or kidney damage (within the first 90 days of injury). After 90 days, the patient is considered to have progressed into CKD. AKI affects more than 2 million U.S. patients and costs the healthcare system in excess of $9 billion per year. More than 300,000 patients per year in the U.S. die due to AKI that has many causes. Our business model is to license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs. We believe, however, that our management team’s broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing these assets into our company. - 1 - Pipeline Our proprietary pipeline is comprised of our two product candidates – Oxylanthanum Carbonate and UNI 494 – which are described below. Figure 1 Unicycive Product Pipeline Oxylanthanum Carbonate Oxylanthanum Carbonate Purchase Agreement On September 20, 2018, we entered into an Assignment and Asset Purchase Agreement (the “Spectrum Agreement”) with Spectrum Pharmaceuticals, Inc. (“Spectrum”), pursuant to which we purchased certain assets from Spectrum, including Spectrum’s right, title, interest in and intellectual property related to Oxylanthanum Carbonate RZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known as SPI 014 (“SPI” and together with Renalan, the “Compounds”). Pursuant to the Spectrum Agreement, in consideration for the Compounds, we issued 313,663 shares of common stock to Spectrum. Additionally, the Spectrum Agreement provides that until the earlier of (i) 36 months from the first date on which our stock trades on a public market, or (ii) the date upon which we attain a public market capitalization of $50,000,000 or greater, we are required to issue additional shares of our common stock as may be needed to ensure Spectrum maintains a 4% ownership of our issued and outstanding common stock on a fully-diluted basis. Fully-diluted shares of common stock for purposes of the Spectrum Agreement assumes conversion of any security convertible into or exchangeable or exercisable for common stock or any combination thereof, including any common stock reserved for issuance under a stock option plan, restricted stock plan, or other equity incentive plan approved by the Board of Directors of the Company immediately following the issuance of additional shares of our common stock (but prior to the issuance of any additional shares of common stock to Spectrum). We are also required to pay Spectrum 40% of all of our sublicense income for any sublicense granted to certain sublicensees during the first 12 months after the Closing Date (as that term is defined in the Spectrum Agreement) and 20% of all other sublicense income. Our payment obligations to Spectrum will expire on the twentieth (20 th ) anniversary of the Closing Date of the Spectrum Agreement. - 2 - Disease overview: Hyperphosphatemia Chronic kidney disease (CKD) is the gradual loss of kidney function that can get worse over time leading to lasting damage. The stages of chronic kidney disease are shown below in Table 1. Table 1 Chronic Kidney Disease Stages Table 1: adapted from The Renal Association (https://renal.org/information-resources/the-uk-eckd-guide/ckd-stages/) eGFR = estimated glomerular filtration rate (a measure of kidney function) Complications of CKD include electrolyte imbalances, fluid build-up, anemia, bone disease, and heart disease. Hyperphosphatemia is an electrolyte disorder in which elevated phosphorus levels in the blood lead to cardiovascular complications and vascular calcification (hardening). According to Kidney Disease Improving Global Outcomes (KDIGO) guidelines, hyperphosphatemia is defined as an abnormally high serum phosphorus concentration >4.5 mg/dL. In healthy people, normal serum phosphorus levels are maintained s by absorbing from food and excreting (removing from the body) it in the urine and feces. In people with CKD, not enough phosphate is excreted, leading to elevated levels of phosphorus in the blood. In CKD, hyperphosphatemia is caused by a chronic dysregulation of serum phosphorus levels as a result of progressive kidney damage. According to a 2009 paper authored by Covic, hyperphosphatemia is associated with increased risk of cardiovascular disease, metabolic bone disease, and deaths from all-causes (all-cause mortality) mortality. According to a study completed by Palmer in 2011, it is estimated that all-cause mortality is increased by 18% for every 1 mg/dL increase in serum phosphorus concentration. Hyperphosphatemia is also a major cause of morbidity in CKD patients, which increases the economic and clinical burden on patients and the health system and results in Medicare expenditures of $70 billion in the U.S. According to the 2023 United States Renal Data System (USRDS) Annual Report, it is estimated that 14% of U.S. adults (approximately 31 million people) have CKD. Most patients with Stage 5 CKD (ESRD) either undergo kidney transplants or go on dialysis. The 2023 USRDS annual report indicates that there were 541,326 prevalent dialysis patients in 2021 (the latest reported year). The prevalent U.S. dialysis population has grown at an average yearly rate of 3.5% over the past decade. Furthermore, in a paper published by McCullough in 2019, the number of patients in the U.S. with ESRD is increasing steadily and is projected to reach between 971,000 and 1,259,000 in 2030. In 2020-21, the number of prevalent dialysis patients declined due to an increased death rate of dialysis patients as a consequence of COVID-19. - 3 - Current treatment of hyperphosphatemia The treatment goal for patients with hyperphosphatemia is focused on controlling the level of phosphate in the body. KDIGO guidelines recommend three main strategies for managing hyperphosphatemia: dietary intake restrictions, use of phosphate binders, and dialysis, as shown in Figure 2 below. Figure 2 KDIGO Guidelines Recommend Three Main Strategies While KDIGO guidelines do not recommend one phosphate binder over another, they do recommend restricting the dose of calcium-based binders and avoiding long-term us of aluminum-containing binders.. This means that physicians prescribe their medication of choice, usually based on clinical and patient factors. Utilization of calcium-based binders is discouraged by the most recent KDOQI/KDIGO guidelines due to mounting clinical evidence that excess calcium load from calcium-based phosphate binder is associated with hypercalcemia and cardiovascular calcification which has been associated with an increased risk of morbidity (disease) and mortality (death). According to data from the Dialysis Outcomes and Practice Patterns Study (DOPPS) in 2021, 82% of U.S. dialysis patients were prescribed phosphate binders, which equates to approximately 450,000 patients. - 4 - Unmet Medical Need in the Management of Hyperphosphatemia The brief descriptions of the mechanism of action and what we believe to be the advantages and disadvantages of various phosphate binders are shown below in Table 2 . Table 2: Adapted from Covic and Rastogi, 2013. - 5 - Despite the commercial availability of the six phosphate binders in the table above, 75% of U.S. dialysis patients fail to achieve the serum phosphorus target levels established by the KDIGO guidelines. Moreover, serum phosphorus outcomes are trending downward—underscoring the need for new and effective treatment options. Figure 3 Serum Phosphorus Target Achievement from 2012 to 2021 In 2005, Unruh, ML published a paper that showed poor adherence to treatment is common in patients with ESRD and has been associated with an increased risk of mortality. In addition, poor adherence to phosphate binder therapy has been associated with failure to adequately control serum phosphorus concentrations as shown in a publication by Arenas, MD and others in 2010. Results from a study of 233 patients on maintenance dialysis from three different dialysis units in the U.S. showed that patients took a mean of 11 ± 4 medications with a median daily pill intake of 19 as shown by Chiu, YW in 2009. Phosphate binders accounted for nearly 50% of the total pill burden, with a median daily pill count of nine. Only 38% of patients in this study reported that they were adherent to their prescribed phosphate binder therapy and adherence decreased significantly with increased pill count. Potential strategies to improve adherence to phosphate binders in patients with ESRD include: (i) a reduction in pill size and number, (ii) improvement of palatability, and (iii) a reduction in associated adverse effects as published in a study by Covic and Rastogi in 2013. Therefore, we believe there is a current need for better phosphate binders with high phosphate binding capacity, enabling a reduced pill burden for better medication compliance. Development of Oxylanthanum Carbonate Oxylanthanum Carbonate (lanthanum dioxycarbonate) is an investigational phosphate binding agent utilizing proprietary nanoparticle technology for the treatment of hyperphosphatemia in CKD patients on dialysis. - 6 - Oxylanthanum Carbonate Mechanism of Action Oxylanthanum Carbonate binds to phosphates and forms an insoluble lanthanum phosphate complex which is then excreted via the feces. This results in reduced absorption of phosphate leading to a reduction of serum phosphorus levels. In rat studies, Oxylanthanum Carbonate exhibited comparable reduction in the urine phosphorus excretion following administration of a lower dose of drug product (0.40g) vs a higher dose (0.57g) of Fosrenol® (lanthanum carbonate tetrahydrate) which is a currently approved lanthanum-based phosphate binder. While differing in the mass of drug product, each dose contained comparable amounts of the active moiety (elemental lanthanum). In the same study, at equivalent doses, Oxylanthanum Carbonate was superior to Sevelamer (the most commonly used phosphate binder) in reducing urine phosphorus excretion (see Fig 3). Figure 4 Urine Phosphate Levels in Rats Following Comparable Dosing of Oxylanthanum Carbonate, Fosrenol, or Sevelamer In animal toxicology studies with oxylanthanum carbonate no unexpected toxicity was found and systemic absorption of lanthanum was extremely low, which is consistent with similar studies conducted with Fosrenol. The chemical design of Oxylanthanum Carbonate was designed to allow for a smaller tablet size and require fewer pills compared with currently available phosphate binder alternatives, specifically with a dosing regimen of only one tablet per meal. The Oxylanthanum Carbonate tablet is designed to disintegrate rapidly in the stomach after swallowing and does not need to be chewed. Clinical Trial Experience First-in-Human Phase 1 Study In September 2012 a Phase 1 single-center clinical trial evaluating Oxylanthanum Carbonate in 32 healthy volunteers was completed in the United States. Four sequential dose cohorts of 8 subjects each (6 actives and 2 placebos) received Oxylanthanum Carbonate at 1500, 3000, 4500, or 6000 mg/day, taken orally in 3 divided doses within 15 minutes after meals, for five consecutive days. The primary endpoint of the study was the evaluation of safety, and the secondary endpoint was the phosphate binding capacity of Oxylanthanum Carbonate as judged by the level of phosphorus in feces and urine. We believe the study indicated that Oxylanthanum Carbonate was minimally absorbed to the systemic circulation and was well-tolerated at doses up to 6000 mg/day. Oxylanthanum Carbonate significantly reduced urine phosphate excretion and significantly increased fecal phosphate excretion at doses at and above 3000 mg/day. The mean overall change in phosphorus from baseline in both urine and feces, across all treatment groups, showed a dose-response trend that was statistically significant (p<0.0001 and p=0.0004, respectively). The mean reduction in urine phosphorus excretion was not significant at 1500 mg/day (p=0.3676) but was significant at 3000 (p=0.0004), 4500 (p<0.0001), and 6000 (p=0.0001) mg/day, as shown in the figure below. The mean reduction in urine phosphorus excretion was significant (p<0.001) at all four doses of Oxylanthanum Carbonate ( Figure 4 ). - 7 - Figure 5 Daily Urine Phosphate Reduction in Healthy Volunteers Oxylanthanum Carbonate Bioequivalence Study in Healthy Volunteers We conducted a randomized, open label, two-way crossover bioequivalence BE study to establish the bioequivalence of the phosphate binding capacity of Oxylanthanum Carbonate and Fosrenol. The primary objective of the study was to demonstrate PD equivalence of orally administered Oxylanthanum Carbonate 1000 mg three-times daily (TID) to orally administered Fosrenol 1000 mg TID in healthy subjects, and the secondary objective was to compare the safety and tolerability of UNI-014 versus Fosrenol in healthy subjects. The study design, including the dose, primary endpoint and the sample size was reviewed by the Agency prior to the initiation of the study. The primary outcome measure was least squares (LS) mean change in urinary phosphorous excretion (in mg/day) from baseline to the evaluation period. The evaluation period was defined as the approximately 72-hour urine collection period starting on Day 1 and ending on Day 4. Baseline was defined as the approximately 48-hour urine collection period starting on Day -2 and ending on Day 1. PD equivalence was to be claimed if the 90% confidence interval (CI) of the primary PD variable for Oxylanthanum Carbonate was completely contained within the reference interval, which was defined as ±20% of the LS mean of the primary PD variable for lanthanum carbonate. The LS mean change from Baseline for Oxylanthanum Carbonate (-320.4 mg/day) was similar to the LS mean change from Baseline for Fosrenol (-324.0 mg/day). The 90% CI for the LS mean was (-45.88, 53.16), which is well within the acceptance range of (-64.80, 64,80) ( Table 3 ). It was concluded that UNI-014 was bioequivalent to Fosrenol. Primary outcome data is presented in the table below. Table 3: Summary of Mean Change in Urinary Phosphorus Excretion (mg/day) Phosphorus Excretion (mg/day) Visit Statistics Oxylanthanum Carbonate (N=75) Fosrenol (N=75) Baseline LS Mean 861.6 876.1 Evaluation Period LS Mean 546.7 546.8 Change from Baseline LS Mean Change -320.4 -324.0 90% Confidence Interval for the LS mean (Test-Reference) (-45.88, 53.16) Acceptance Range (-64.80, 64.799) Regulatory Guidance Unicycive is seeking approval for Oxylanthanum Carbonate from the U.S. Food and Drug Administration (FDA) through the 505(b)(2) regulatory pathway. The 505(b)(2) pathway allows for full approval of a drug using data from an approved drug with the same active moiety. The approved drug is called the Reference Listed Drug (RLD). The RLD for the Oxylanthanum Carbonate submission is Fosrenol (lanthanum carbonate). The FDA recommended conducting a BE study in healthy volunteers and a 6-month toxicity study in mice with both Oxylanthanum Carbonate and Fosrenol to be able to rely on the efficacy and safety of Fosrenol. We completed both studies and submitted the data for the FDA’s review during the pre-NDA (New Drug Application) meeting request. A summary of the human BE study is provided above. After reviewing the data, the Agency recommend that we conduct a tolerability study of Oxylanthanum Carbonate in chronic kidney disease patients on dialysis before filing the NDA. We gained alignment with the FDA on the study design, sample size, and endpoints of the proposed pivotal clinical study during a Type-C meeting in September 2023. This study was initiated in December 2023 and the topline data is expected at the end of Q2, 2024. We plan to submit the NDA soon after the completion of the clinical study. - 8 - Manufacturing We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates. We currently have no plans to build our own clinical or commercial scale manufacturing capabilities. If and when any of our product candidates are approved, we plan to obtain manufacturing capacity through contract manufacturing organizations (CMOs) to meet projected needs for commercial sale quantities and serve patient needs. With regards to manufacturing, testing and potential commercial supply of Oxylanthanum Carbonate, we have entered into an agreement with Shilpa Medicare Ltd based in India. According to the terms of the agreement, following Oxylanthanum Carbonate approval by the FDA, Unicycive will pay the vendor $2 million in the first calendar year when the net revenue reaches $10 million from sales of Oxylanthanum Carbonate and commercial supply of the product by the vendor (First Payment). Thereafter, we will pay $2 million per year for four consecutive years, after the first year’s payment, for the total payments of $10 million, provided all commercial supplies are continued to be manufactured and supplied by the vendor. Unicycive is not obligated to make any payments to the vendor until FDA approval of the product is obtained and commercial revenue is generated. Commercial Strategy for Oxylanthanum Carbonate The worldwide market for hyperphosphatemia agents is estimated at ~$2.5 billion and is growing at a 5.3% CAGR (Fortune Business Insights, Hyperphosphatemia Treatment Market, 2021-2028 ). According to a study conducted by Syneos Health for the Company, the U.S. market makes up over $1 billion of that total. We own commercial rights to Oxylanthanum Carbonate globally. For the U.S. market, we are preparing to launch Oxylanthanum Carbonate on our own by building out a specialty commercial operation to address the highly concentrated nephrology prescription market. Executive management of the company has considerable product launch experience in the nephrology space with specific working knowledge of the hyperphosphatemia market. While there are ~10,000 prescribers of phosphate binders, ~2,500 prescribers are responsible for over half of the ~2.5 million prescriptions written annually. We believe that we can efficiently create demand for Oxylanthanum Carbonate within the most productive segments of the market with a relatively small salesforce, while addressing the broader segments of prescribers through non-personal and digital promotion tactics. An alternative commercial strategy would be to out-license and/or co-promote Oxylanthanum Carbonate with and established biopharmaceutical company that has an existing commercial infrastructure in the renal disease space and/or enter into distribution agreement(s) with dialysis organizations for the commercialization of Oxylanthanum Carbonate. Collaboration Partners In July of 2022, we entered into an agreement granting exclusive rights to develop, market and commercialize Oxylanthanum Carbonate (lanthanum dioxycarbonate) to Lee’s Pharmaceutical (HK) in Mainland China, Hong Kong, and certain other Asian markets. Under the terms of the agreement, Lee’s Pharm will be responsible for development, registration filing and approval for Oxylanthanum Carbonate in the licensed territories. In addition, Lee’s Pharm will have sole responsibility for the importation of the drug product from Unicycive and for the costs of commercialization of Oxylanthanum Carbonate in the licensed territories. We received an upfront payment of $1.0 million upon signature and may receive up to $1.0 million in milestone payments upon product launch in China and will be eligible for tiered royalties upon achievement of prespecified regulatory and commercial achievements. In February of 2023, we entered into an exclusive license agreement with Lotus Pharmaceutical for the development and commercialization of Oxylanthanum Carbonate in the Republic of Korea. Under the terms of the agreement, Lotus will be responsible for development, registration filing and approval of Oxylanthanum Carbonate in the Republic of Korea. In addition, Lotus will have sole responsibility for the importation of the drug product from Unicycive and for the costs of commercialization of Oxylanthanum Carbonate in the Republic of Korea. We received an upfront payment of $750,000 and may receive up to $3.7 million in milestone payments and tiered royalties upon achievement of prespecified regulatory and commercial achievements. We will continue to seek licensing partners for Oxylanthanum Carbonate in other territories outside the U.S. (i.e., Europe, Japan, Canada, South America, and the Middle East.) - 9 - U.S. opportunity for Oxylanthanum Carbonate Oxylanthanum Carbonate is a phosphate binder for the treatment of hyperphosphatemia in patients with CKD on dialysis and is intended to be administered as a tablet that will be swallowed whole at mealtimes. CKD patients typically have co-morbidities, which often require them to be on strict pill schedules. Current phosphate binder products such as Renvela ® , Calcium Acetate, Auryxia ® , Velphoro ® , and Fosrenol ® involve patients needing to take large numbers and/or large sized, chewable pills each day, which often results in poor adherence to the prescribed drug therapy (Figure 4 below). By virtue of its novel nanoparticle technology, Oxylanthanum Carbonate leverages the high phosphate binding potency of lanthanum in a palatable dose form that has the potential to substantially reduce the pill burden volume for patients. In this regard, we believe that the combined effect of smaller pill size, lower number of pills, and improved palatability with Oxylanthanum Carbonate compared with currently available phosphate binders is likely to lead to improved patient compliance/adherence and more effective disease management. Figure 6 Phosphate Binders Tenapanor (Ardelyx): A New Hyperphosphatemia Market Player Tenapanor is a new oral treatment for hyperphosphatemia that utilizes a novel mechanism of action that inhibits paracellular transport of phosphorus into the bloodstream. Ardelyx filed an NDA for tenapanor with the FDA in June of 2020 which received a Complete Response Letter (“CRL”) from the FDA’s Division of Cardiology and Nephrology in July of 2021, According to the CRL, the Division characterized the treatment effect of tenapanor as “small and of unclear clinical significance.” Ardelyx appealed FDA’s decision and resubmitted their application and was granted approval in October of 2023. The labelled indication for Xphozah (tenapanor) is “…as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.” The limited indication as add-on therapy is presumably due to the drug’s relatively modest treatment effect when used as monotherapy in clinical trials (intent-to-treat (ITT) analysis of treatment effect of 0.70 mg/dL on serum phosphorus levels). Additionally, the product label lists diarrhea as the most common adverse event occurring in 43-53% of patients. We believe that due to its novel mechanism of action, Xphozah represents an important new addition to the nephrologist’s hyperphosphatemia treatment armamentarium. We believe that the relative competitive profile of Oxylanthanum Carbonate (OLC) has several advantages over Xphozah: 1) Based on our demonstration of pharmacodynamic equivalence of OLC to the reference-listed drug, Fosrenol, our label for OLC is expected to describe its treatment effect as a change of 1.91 mg/dL in serum phosphorus levels in an ITT analysis of patients treated with OLC as monotherapy. This represents more than a 2.7 times greater treatment effect compared to Xphozah. 2) The labelled indication for OLC is expected to be identical to that of Fosrenol which will support its use as monotherapy and will be not limited to add-on therapy, 3) The demonstrated adverse event profile of lanthanum-based phosphate binders (subject to validation of OLC’s GI tolerability profile currently being evaluated in a clinical trial) will compare favorably to high rate of reported GI adverse events of Xphozah. One of the key features of Xphozah’s value proposition as an add-on therapy is its low pill burden. Given its substantially lower pill burden than other phosphate binder options, we believe that OLC may be the most logical phosphate binder to combine with tenapanor making these two new medicines more complimentary than competitive as the combination would leverage two distinct mechanisms of action to control phosphorus with a much lower total pill burden than the current standard of care. - 10 - Changing Access and Reimbursement Environment By current federal regulation, phosphate lowering drugs (PLTs), which are currently provided to patients by Medicare Part D insurers, are scheduled to be included into the dialysis bundle in 2025 and will be paid for separately by CMS through a Transitional Drug Add-On Payment Adjustment (TDAPA) program for a minimum of 2 years. In the 2023 ESRD PPS Final Rule, CMS stated, “We have seen that incorporating Medicare Part D drugs into the ESRD PPS has had a significant positive effect of expanding access to such drugs for beneficiaries who do not have Medicare Part D coverage.” (federalregister.gov/d/2022-13449). We believe that the timing of this change coincides favorably with our anticipated launch timing of Oxylanthanum Carbonate (OLC) and could provide for a more rapid launch uptake and competitive pricing advantages. A key factor affecting initial launch uptake of OLC is the expanded access to our product to Medicare beneficiaries which make up over two-thirds of patients on dialysis. Currently under Part D, patients often face high co-pays for branded drugs which tends to restrict access to these drugs. Under the current TDAPA rules, CMS reimburses dialysis organizations for 100% of the average selling cost (ASP) of all phosphate lowering drugs—eliminating the access restrictions patients face from Part D plans. We also see a pricing benefit to OLC under TDAPA. In the current reimbursement environment, manufacturers often pay significant rebates to Part D plans for formulary access. Current branded PLTs have diluted their ASP as a result of these rebate agreements and under the Inflation Reduction Act (IRA) are limited in their ability to raise prices above the rate of inflation. Due to the expected launch timing of OLC, we expect to enjoy a pricing advantage over other branded competitors in the market. UNI-494 Disease overview: acute kidney injury (AKI) Acute kidney injury (AKI) is defined as a sudden loss of kidney function that is diagnosed by increased serum creatinine levels and decreased urine output and is limited to a duration of 7 days, whereas chronic kidney disease (CKD) is a defined as persistent decrease in kidney function beyond 90 days. Thus, AKI and CKD can form a continuum whereby initial kidney injury can lead to persistent renal injury, eventually leading to CKD. Acute kidney injury (AKI) is estimated to occur in approximately 20–200 per million population in the community, 7–18% of patients in hospital, and approximately 50% of patients admitted to the intensive care unit (ICU). Importantly, AKI is associated with morbidity and mortality; AKI affects 13 million people worldwide, and an estimated 2 million people die of AKI every year, whereas AKI survivors are at increased risk of developing chronic kidney disease (CKD) and end-stage renal disease (ESRD) — conditions that carry a high economic, societal, and personal burden (Chawla et al., Nature Reviews-Nephrology, 2017). Delayed Graft Function (DGF) Our initial target indication for UNI-494 is delayed graft function (DGF). DGF is a form of acute kidney injury (AKI) caused by the ischemia reperfusion injury (IRI) phenomenon in kidney transplantation surgery. DGF is a serious complication of kidney transplantation with no approved therapies. Patients who experience DGF have an increased risk of mortality that’s 59% higher than those without DGF. Patients with DGF are also more than 2 times more likely to be readmitted to the hospital within 30-days post-transplantation and are at 41% increased risk of long-term graft loss. Given the average cost of a kidney transplant of nearly $500,000, the economic implications of graft failure due to DGF are staggering. The potential commercial opportunity for UNI-494 in DGF is substantial. In the US, 46,630 kidney transplants were performed in 2023. This number would undoubtedly be higher were more donor organs available. Currently, there are over 80,000 Americans on the waitlist for a donor kidney. 15% of transplanted kidneys come from living donors meaning that the remaining 85% of donor organs come from deceased donors. While the incidence of DGF is relatively small (1.6 -3.6%) for living donor organs, the risk is considerably higher for deceased donor organs. The rate of DGF is 20 - 30.4% for DBD (donor brain death) organs and 45 – 55.1% for DCD (donor circulatory death) organs. Due to the shortage of donor kidneys and the size of the kidney transplant waitlist, the incidence of DGF is expected to increase as lower quality organs are transplanted. - 11 - Current treatment of delayed graft function and acute kidney injury Currently there are no FDA approved medicines to treat DGF and/or AKI. Treatment options for AKI include continuous renal replacement therapy, renal transplant, and dialysis. In most cases the damage to the kidney is irreversible, and the patient needs to have a renal transplant or be on dialysis for life. Therefore, there is a high unmet medical need. If approved, UNI-494 has the potential to be a first-in-class drug for the treatment of AKI. Role of Mitochondria in kidney diseases Mitochondria are where most of the energy in a cell is produced. The kidney has one of the highest mitochondrial densities in the body. Both acute and chronic kidney disease is associated with mitochondrial loss and impaired repair mechanisms, which subsequently result in increased oxidative damage, cellular injury and cell death. AKI and CKD not only form a continuum but are a bidirectional process, wherein maladaptive repair of AKI leads to CKD and patients with underlying CKD conditions are predisposed to the development of AKI. Mitochondrial dysfunction plays a crucial role in both AKI and CKD, as shown in the diagram below. Since mitochondrial dysfunction is an important factor in the pathogenesis of AKI and CKD, mitochondria have emerged as a therapeutic target for treatment of these diseases. Figure 7 Mitochondrial Damage from Acute Kidney Injury and Chronic Kidney Disease Adapted from Bhatia et al, Kidney Research and Practice 2020 39(3):244-258. UNI-494: a Novel Pro-drug of Nicorandil Nicorandil, marketed in such products as Ikorel and Dancor, is indicated for the treatment of chronic stable angina pectoris. It is currently not approved in the United States but has been approved for use in Australia, the United Kingdom and most of Europe, and in India, Japan, South Korea, and Taiwan. Nicorandil is a dual-action mitochondrial potassium (mitochondrial K ATP ) channel activator and nitrate-like vasodilator. Activation of mitochondrial K ATP channel leads to restoration of mitochondrial function and cytoprotection. Nicorandil has extensive safety and efficacy data from multiple clinical trials, including a 5,000-patient randomized controlled trial (IONA Study, Lancet 2002) and there is a consensus in the literature that the activation of mitochondrial K ATP channel is the biological basis for the observed cardio-protection and reno-protection in multiple clinical trials. Although nicorandil is known to be safe, gastrointestinal ulceration is a rare but severe side effect and it is dose-dependent. UNI-494 was rationally designed to be absorbed into the systemic circulation, and once absorbed, to release nicorandil into the bloodstream. By avoiding direct exposure to the gastrointestinal tract of nicorandil, it is believed that UNI-494 may be able to minimize or avoid the gastrointestinal side effects of nicorandil. Also, based on the rate of conversion of UNI-494 to nicorandil in the systemic circulation, UNI-494 may offer greater and/or more prolonged exposure to nicorandil for the treatment of patients with acute kidney injury. Our technology for UNI-494 is licensed from Sphaera Pharmaceutical Private Limited, a Singapore-based company (“Sphaera”), with offices in India and the U.S. We have the global, exclusive license to UNI-494. Sphaera conceived of and performed initial characterization of various potential pro-drug linkers, including the initial patent application, and performed some initial physiochemical characterization and preliminary animal pharmacokinetic studies. - 12 - Mechanism of Action of UNI-494 UNI-494 is a novel proprietary drug that selectively binds to the SUR2B subunit of the mitochondrial K ATP channel and activates it to restore mitochondrial function and reduce oxidative stress. UNI-494 is cleaved by esterase enzymes to form nicorandil, the active metabolite. The proposed mechanism of action of UNI-494 is shown in the diagram below: Figure 8 Mechanism of Action of UNI-494 Figure 6 Ischemia/reperfusion injury (IRI) is one of the main reasons for causing acute kidney injury (AKI) that results in DGF during kidney transplantation. Ischemic preconditioning, that works by activating K ATP channels in mitochondria, is a natural endogenous mechanism which protects cells from IRI in the heart, kidney, liver, and other organs. UNI-494 is a pharmacological approach that emulates and enhances this natural phenomenon of ischemic preconditioning. Efficacy of UNI-494 in Animal Models: We recently conducted pre-clinical pharmacology studies to evaluate the efficacy of UNI-494 in animal models. The ischemia reperfusion injury (IRI) model of DGF in rats was used to study the efficacy of UNI-494 in preventive mode on kidney injury with a special focus on kidney functional markers (serum creatinine [sCr], blood urea nitrogen [BUN], and urinary albumin/creatinine ratio [ACR]), tubular injury markers (urinary neutrophil gelatinase-associated lipocalin [NGAL] and proximal tubular damage (proximal tubular injury scores via histology. UNI-494 was administered 30 minutes prior to the induction of ischemia, IR induced significant increases of sCr, BUN, ACR, NGAL, β2-MG, and proximal tubular injury damage scores in the vehicle treated DGF group when compared to No DGF sham group (p<0.0001 – as per one-way ANOVA multiple comparison test). Following treatment with UNI-494, there was a statistically significant reduction of biomarkers and improvement in tubular injury as shown in the figure below. Figure 9 Effect of UNI-494 on Ischemia-Reperfusion Injury in Rats - 13 - UNI-494 Clinical Development Status We have completed non-clinical safety assessment studies required for regulatory filing and submitted a Clinical Trial Application (CTA) to the Medicines and Healthcare Products Regulatory Agency (MHRA) to initiate a Phase 1 study in healthy volunteers in the United Kingdom. The MHRA has completed review of our CTA and issued a notice of acceptance for UNI-494 first-in-human Phase 1 study in healthy volunteers. We initiated the Phase I study in healthy volunteers to evaluate the safety and tolerability of UNI-494. We expect to complete the study during the 2H of 2024. Clinical trials for UNI-494 in Acute Kidney Injury Phase I study in Healthy volunteers: This is a single-center, double-blind, placebo-controlled, randomized single ascending dose (SAD) (Part 1) and multiple ascending dose (MAD) (Part 2) study in healthy male and female subjects of non-childbearing potential. Part 1 will enroll up to approximately 40 subjects in 5 cohorts of 8 subjects each (randomized to a ratio of 6 active and 2 placebo per cohort). There will be an interim decision meeting after each cohort/period, to review the safety, tolerability, and PK data in order to decide the dose level for the subsequent cohort. Part 2 will enroll approximately 20 subjects in 2 cohorts of 10 subjects each, randomized to a ratio of 8 active treatment to 2 placebo who will be dosed for 5 days. The dose level for the Part 2 Cohort 1 will be selected based on the safety, tolerability and PK data from Part 1. The study is actively enrolling subjects in the UK. We have completed Part 1 of the study. Part 2 of the study is in progress and we expect to complete this study in 2H of 2024. Proof of Concept Phase 2 Study in DGF We are in discussions with our Key Opinion Leaders (KOLs) regarding target patient population, study design including dose, duration of treatment, and sample size for the proof of principle Phase 2 study to prevent DGF in kidney transplantation patients. Based on the mechanism of action of UNI-494, our goal is to identify the target kidney transplant patient population who are most likely to benefit from UNI-494. We have also identified patient populations where we would not likely evaluate UNI-494 in clinical trials, including patients with prior history of gastrointestinal ulcerations. This will become exclusion criteria in future clinical trials for UNI-494. We plan to file an Investigational New Drug (IND) application with the FDA to initiate a Phase 2 proof-of-concept trial for the prevention of Delayed Graft Function in Kidney Transplantation in Q4, 2024. - 14 - Regulatory Strategy for UNI-494 Orphan Drug Designation: In February 2024, the FDA granted orphan drug designation to UNI-494 for prevention of DGF in patients undergoing solid organ transplantation. The FDA, through its Office of Orphan Products Development (OOPD), grants orphan drug designation to drugs that have the potential to offer a safe and effective treatment, diagnosis or prevention of rare diseases that affect fewer than 200,000 patients in the United States. Orphan drug designation provides certain benefits to the drug developer that include the following: 1) tax credits for qualified clinical trials, 2) exemption of user fees and 3) potential for seven years of market exclusivity after approval. The FDA issued a guidance to industry in 2019 for development of drugs for prevention of DGF in kidney transplantation. This guidance outlines the study design, patient population, randomization, stratification, dose selection and primary endpoints required for registration of drugs in DGF. This guidance provides a clear path for development of drugs for prevention of DGF. Nicorandil is already approved in Europe and Asia for the treatment of heart disease. We believe there is a possibility these historical Nicorandil data, along with preclinical and clinical data with UNI-494 itself, can be utilized for streamlined U.S. FDA review of UNI-494. While the pre-clinical requirements to start a clinical program for an IND would be similar for UNI-494 as for NCE (New Chemical Entity), we believe that the vast clinical data set from Nicorandil will potentially help us to expedite the clinical development program with the FDA. Market Potential In Delayed Graft Function (DGF): A UNI-494 per patient treatment cost of $25,000 for the ~40,000 deceased donor kidney transplants per year values the DGF market at $1 billion. This estimate of the DGF market potential is only intended to be illustrative. The commercial potential of UNI-494 will be determined by the portion of the market ultimately addressable by UNI-494 and its actual launch price. Given the economic consequences of kidney graft failure, a clinically effective UNI-494 could reasonably command a significantly higher market price. In Acute Kidney Injury (AKI): According to a 2017 article by Silver and Chertow, the current cost of care for AKI in the U.S. is estimated to be between $5.4 billion to $24 billion per year. In England, inpatient costs related to AKI are estimated to make up 1% of the total National Health Service budget. With no effective treatment for AKI, it is not possible to definitively state a market figure. However, with the high cost and burden of caring for AKI patients, we believe a conservative market estimate is approximately $3 billion in the U.S. alone. The lack of effective therapeutic interventions for AKI means that UNI-494 has the potential to be the first drug approved for the treatment of AKI. AKI is a heterogeneous disease. We plan to target a more homogeneous AKI population for UNI-494 by focusing on kidney injury caused by complications from heart failure, surgeries, drugs, and contrast induced nephropathy. Sphaera License Agreement On October 1, 2017, we entered into an exclusive license agreement (the “Sphaera License Agreement”) with Sphaera Pharma Pte. Ltd., a Singaporean pharmaceutical corporation (“Sphaera”). Pursuant to the Sphaera License Agreement, we acquired an exclusive royalty-bearing worldwide license to develop, make, have made, use, practice, research, distribute, lease, sell, offer for sale, license, import or otherwise dispose of certain rights owned or controlled by Sphaera and/or any of its affiliates, related to UNI-494 (the “UNI-494 Rights”). We also acquired a non-exclusive license to certain know-how and technology related to the UNI-494 Rights. Sphaera conceived of and performed initial characterization of various potential pro-drug linkers, including the initial patent application, and performed some initial physicochemical characterization and preliminary animal pharmacokinetic studies. - 15 - Under the terms of the Sphaera License Agreement, we are obligated to pay to Sphaera, on a quarterly basis, a running royalty of 2% of our net sales (including our affiliates) in connection with the global sales of UNI-494; provided, however, that if we are required to make royalty payments to one or more third parties whose patent rights would be infringed by the exercise of the UNI-494 Rights, we may reduce such running royalty due to Sphaera by the amount of such third-party royalty rate. We are also required to pay to Sphaera certain milestone payments, including, upon our initiation of a second clinical trial; $50,000 at the time the first patient in such trial is dosed; an additional $50,000 within 30 days of completion of such trial; and at the time the FDA accepts a NDA for UNI494, $1.65 million. In addition, we are responsible for the prosecution of patent rights, and any related costs and expenses for patent prosecution and maintenance. We also have the right, but not the obligation, to defend the UNI-494 rights during the term of the Sphaera License Agreement; provided, however, that if we determine not to prosecute or maintain such rights in any country, we must provide ninety (90) days written notice to Sphaera. We may terminate the Sphaera License Agreement at any time by providing thirty (30) days’ written notice to Sphaera. Additionally, in the event that either we or Sphaera breach any of our respective material obligations, the non-breaching party may, in its sole discretion, have the right to terminate the Sphaera License Agreement, provided that it give the breaching party written notice specifying the nature of the breach and amounts of running royalty payments due, if any. In such an occurrence, the termination notice is effective ninety (90) days from receipt of the notice if the breaching party has failed to cure the breach. Competition We operate in a highly competitive and regulated industry that is subject to rapid and frequent changes. We face significant competition from organizations that are pursuing products that would compete with the product candidates we are developing and the same or similar products that target the same conditions we intend to treat. Due to our limited resources, we may not be able to compete successfully against these organizations, which include many large, well-financed and experienced pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies. Intellectual Property Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, as well as novel discoveries, product development technologies, and know-how. Our commercial success also depends in part on our ability to operate without infringing on the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is to develop and maintain protection of our proprietary position by, among other methods, filing or in-licensing U.S. and foreign patents and applications related to our technology, inventions, and improvements that are important to the development and implementation of our business. We also rely on trademarks, trade secrets, know-how, continuing technological innovation, confidentiality agreements, and invention assignment agreements to develop and maintain our proprietary position. The confidentiality agreements are designed to protect our proprietary information and the invention assignment agreements are designed to grant us ownership of technologies that are developed for us by our employees, consultants, or other third parties. We seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in our agreements and security measures, either may be breached, and we may not have adequate remedies. In addition, our trade secrets may otherwise become known or independently discovered by competitors. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of using and manufacturing the same. - 16 - Oxylanthanum Carbonate Patent Portfolio Our Oxylanthanum Carbonate patent portfolio includes one family of granted United States patents, with related applications pending, and an additional family of granted foreign patents, with related applications also pending. Granted and pending claims offer various forms of protection for Oxylanthanum Carbonate including claims to compositions of matter, pharmaceutical compositions, specific forms (such as polymorphs of lanthanum dioxycarbonate), methods of making the composition of matter, and methods for treating elevated levels of phosphate in the blood using Oxylanthanum Carbonate. These United States patents and applications, and their foreign equivalents, are described in more detail below. Both the U.S. patent family and the foreign patent family containing claims to Oxylanthanum Carbonate and related compounds were filed in 2011. Exclusive of patent term extension, the U.S. patents from this family containing claims covering Oxylanthanum Carbonate has a statutory expiration date in 2031. Corresponding patents granted in Canada, Europe (validated in multiple European Patent Convention member states), Japan, China, Australia, and other countries have statutory expiration dates in 2031. In some cases, granted United States patents claiming Oxylanthanum Carbonate have a longer statutory term than the corresponding foreign patents. This results from the USPTO’s practice of granting patent term adjustments for prosecution delays originating at the USPTO. Such adjustments are generally not available under foreign patent laws. If Oxylanthanum Carbonate is approved for marketing in the United States, under the Hatch-Waxman Act we may be eligible for up to five years patent term extension for a granted United States patent containing claims covering Oxylanthanum Carbonate. Similar term extensions may be available in Europe, Japan, Australia, and certain other foreign jurisdictions. The amount of any such term extension, and the identity of the patent to which it would apply, are dependent upon several factors including the duration of the development program and the date of marketing approval. The most relevant granted United States patents with claims covering Oxylanthanum Carbonate are listed below, along with their projected expiration dates exclusive of any patent term extension. Patent Number Title Projected Expiration 8,961,917 Lanthanum carbonate hydroxide, lanthanum oxycarbonate and methods of their manufacture and use May 12, 2031 10,350,240 Lanthanum carbonate hydroxide, lanthanum oxycarbonate and methods of their manufacture and use May 12, 2031 UNI 494 We believe that we have a strong global intellectual property position, substantial know-how and trade secrets relating to UNI 494. As of October 28, 2020, we have one granted U.S. patent that is exclusively licensed to us from Sphaera Pharma Pte Ltd. In addition, we have one application that we own. The granted U.S. patent is directed to methods of making UNI 494, and it is expected to expire in 2032. The PCT application is directed to methods of using UNI 494, and to other compositions of matter and their uses. Should U.S. and other global patents issue from this PCT application, they are expected to expire in 2040. Government Regulations Government authorities in the United States at the federal, state, and local level, including the FDA, the FTC and the DEA, extensively regulate, among other things, the research, development, testing, manufacturing, quality control, approval, labeling, packaging, storage, recordkeeping, promotion, advertising, distribution, marketing and export and import of products such as those we plan to develop and market. For both the products under development and to be marketed, failure to comply with applicable regulatory requirements can, among other things, result in suspension of regulatory approval and possible civil and criminal sanctions. Regulations, enforcement positions, statutes and legal interpretations applicable to the pharmaceutical industry are constantly evolving and are not always clear. Significant changes in regulations, enforcement positions, statutes and legal interpretations could have a material adverse effect on our financial condition and results of our operations. - 17 - Additionally, future healthcare legislation or other legislative proposals at the federal and state levels could bring about major changes in the affected health care systems, including statutory restrictions on the means that can be employed by brand and generic pharmaceutical companies to settle Paragraph IV patent litigations. We cannot predict the outcome of such initiatives, but such initiatives, if passed, could result in significant costs to us in terms of costs of compliance and penalties associated with failure to comply. Pharmaceutical Regulation in the United States In the United States, the FDA regulates drugs under the Food, Drug and Cosmetic Act (FDCA) and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, Warning or Untitled Letters, product recalls, product seizures, total or partial suspension of production or distribution of product(s), injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us. FDA approval is required before any new unapproved drug or dosage form, including a new use of a previously approved drug or a generic version of a previously approved drug, can be marketed in the United States. The process required by the FDA before a new drug may be marketed in the United States generally involves: ● Completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s current good laboratory practice (GLP) regulations; ● Submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin in the United States; ● Approval by an institutional review board (IRB) at each clinical site before each trial may be initiated; ● Performance of adequate and well-controlled human clinical trials in accordance with the FDA good clinical practice (GCP) requirements and other clinical trial-related regulations to establish the safety and efficacy of the proposed drug product for each intended use; ● Satisfactory completion of a pre-approval inspection by FDA of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s cGMP regulations and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; ● Submission to the FDA of an NDA; ● Satisfactory completion of a potential review by an FDA advisory committee, if applicable; and ● FDA review and approval of the NDA. Preclinical Studies When developing a branded product and bringing it to market, the first step in proceeding to clinical studies is preclinical testing. Preclinical tests are intended to provide a laboratory or animal study evaluation of the product to determine its chemistry, formulation, and stability. Toxicology studies are also performed to assess the potential safety of the product. The conduct of the preclinical tests must comply with federal regulations and requirements, including GLPs. The results of these studies are submitted to the FDA as part of an IND application along with other information, including product chemistry, manufacturing and controls and a proposed clinical trial protocol. Long-term preclinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue concurrently with the IND application. - 18 - Clinical Trials Once the IND has been approved by the FDA, the company may begin conducting clinical trials. Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it is initiated at that institution. Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on their www.clinicaltrials.gov website. Human clinical trials are typically conducted in three sequential phases, which may be distinct, or overlap or be combined: ● Phase 1 : The drug is initially introduced into healthy human subjects or patients with the target disease or condition, and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. ● Phase 2 : The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance. ● Phase 3 : The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. Phase 1, Phase 2, and Phase 3 trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if it is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. Marketing Approval After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before marketing of the product may begin in the United States. The NDA must include, among other things, the results of all preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture and controls. Under federal law, the submission of most NDAs is subject to a substantial application user fee, and the manufacturer or sponsor of an approved NDA is also subject to annual program fees. The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit its substantive review. The FDA may request additional information rather than accept an NDA for filing. In some events, the NDA may be required to be resubmitted with additional information and it may be subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. Under the Prescription Drug User Fee Act, as amended, the FDA has agreed to certain performance goals for itself for the review of NDAs through a two-tiered classification system, Standard Review and Priority Review. Priority Review designation is given to drugs that are intended to treat a serious condition and, if approved, would provide a significant improvement in safety or effectiveness over existing therapies. The FDA endeavors to review most applications subject to Standard Review within ten to twelve months whereas its goal is to complete most Priority Review applications within six to eight months, depending on whether the drug is a new molecular entity. - 19 - The FDA may refer applications for certain drug products which present difficult questions related to its safety or efficacy to an advisory committee for review, evaluation, and recommendation, and to seek advice as to whether the application should be approved and under what conditions. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP requirements. Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the NDA unless it determines that the manufacturing process and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications, and the NDA contains data that provide substantial evidence that the drug is safe and effective for the labeled indication. After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter to indicate that the review cycle for an application is complete and that the application is not ready for approval. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application. Even with submission of this additional information, the FDA may ultimately decide that an application does not satisfy the regulatory criteria for approval. If, or when, the deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy (REMS) to help ensure that the benefits of the drug outweigh the potential risks. If the FDA determines a REMS is necessary during review of the application, the drug sponsor must agree to the REMS plan at the time of approval. A REMS may be required to include various elements, such as a medication guide or patient package insert, a communication plan to educate healthcare providers of the drug’s risks, limitations on who may prescribe or dispense the drug, or other elements to assure safe use, such as special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. In addition, the REMS must include a timetable to periodically assess the strategy. The requirement for a REMS can materially affect the potential market and profitability of a drug. Sometimes, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy, and the FDA has the authority to prevent or limit further marketing of a product based on the results of these post-marketing programs. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or certain problems are identified following initial marketing. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling, and, even if the FDA approves a product, it may limit the approved indications for use for the product or impose other conditions, including labeling or distribution restrictions or other risk-management mechanisms. Further changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented, which may require us to develop additional data or conduct additional preclinical studies and clinical trials. An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses similar procedures in reviewing NDA supplements as it does in reviewing the original NDAs. Disclosure of Clinical Trial Information Sponsors of certain clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information on www.clinical trials.gov. Information related to the product, subject population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to discuss certain results of their clinical trials after their completion. Disclosure of the results of these trials can be delayed until the new product or new indication being studied has been approved. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. - 20 - Post-Approval Requirements Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to drug listing and registration, recordkeeping, periodic reporting, product sampling and distribution, adverse event reporting, and advertising, marketing and promotion, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. Drugs may be marketed only for the approved indications and in a manner consistent with the provisions of the approved labeling. While physicians may choose to prescribe a drug for off-label uses, manufacturers may only promote it for the approved indications and in accordance with the provisions of the approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. There also are extensive DEA regulations applicable to controlled substances. Adverse event reporting and submission of periodic reports is also required following FDA approval of an NDA. Additionally, the FDA may require post-marketing testing, known as Phase 4 testing, REMS, and/or surveillance to monitor the effects of an approved product. Alternatively, the FDA may place conditions on an approval that could restrict the distribution or use of the product. In addition, quality-control, drug manufacture, packaging and labeling procedures must continue to comply with cGMPs after its approval. Drug manufacturers and certain of their subcontractors are required to register their establishments and list their marketed products with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality-control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing or if previously unrecognized problems are subsequently discovered. The FDA may also impose a REMS requirement on a drug already on the market if the FDA determines, based on new safety information, that a REMS is necessary to ensure that the drug’s benefits outweigh its risks. In addition, regulatory authorities may take other enforcement action, including, among other things, Warning or Untitled Letters, the seizure of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, refusal to approve pending applications or supplements to approved applications, civil penalties and criminal prosecution. The Hatch-Waxman Amendments 505(b)(2) NDAs The FDA is also authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference from the data owner. The applicant may rely upon the FDA’s findings of safety and efficacy for an approved product that acts as the “listed drug.” The FDA may also require 505(b)(2) applicants to perform additional studies or measurements to support the change from the listed drug. The FDA may then approve the new product candidate for all, or some, of the conditions of use for which the branded reference drug has been approved, or for a new condition of use sought by the 505(b)(2) applicant. Abbreviated New Drug Applications The Hatch-Waxman amendments to the FDCA established a statutory procedure for submission and FDA review and approval of abbreviated new drug applications (ANDAs) for generic versions of listed drugs. An ANDA is a comprehensive submission that contains, among other things, data and information pertaining to the active pharmaceutical ingredient (API), drug product formulation, specifications, and stability of the generic drug, as well as analytical methods, manufacturing process validation data and quality control procedures. Premarket applications for generic drugs are termed abbreviated because they generally do not include clinical data to demonstrate safety and effectiveness. However, a generic manufacturer is typically required to conduct bioequivalence studies of its test product against the listed drug. The bioequivalence studies for orally administered, systemically available drug products assess the rate and extent to which the API is absorbed into the bloodstream from the drug product and becomes available at the site of action. Bioequivalence is established when there is an absence of a significant difference in the rate and extent for absorption of the generic product and the reference listed drug. For some drugs, other means of demonstrating bioequivalence may be required by the FDA, especially where rate or extent of absorption are difficult or impossible to measure. The FDA will approve the generic product as suitable for an ANDA application if it finds that the generic product does not raise new questions of safety and effectiveness as compared to the reference listed drug. A product is not eligible for ANDA approval if the FDA determines that it is not bioequivalent to the reference listed drug, if it is intended for a different use, or if it is not subject to, and requires, an approved Suitability Petition. - 21 - Orange Book Listing In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product. Upon approval of an NDA, each of the patents listed in the application for the drug is then published in the Orange Book. Any applicant who files an ANDA seeking approval of a generic equivalent version of a drug listed in the Orange Book or a 505(b)(2) NDA referencing a drug listed in the Orange Book must certify to the FDA (i) that there is no patent listed with the FDA as covering the relevant branded product, (ii) that any patent listed as covering the branded product has expired, (iii) that the patent listed as covering the branded product will expire prior to the marketing of the generic product, in which case the ANDA will not be finally approved by the FDA until the expiration of such patent or (iv) that any patent listed as covering the branded drug is invalid or will not be infringed by the manufacture, sale or use of the generic product for which the ANDA is submitted. A notice of the Paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers. The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. If the reference NDA holder and patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the Paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the Paragraph IV certification, expiration of the patent, settlement of the lawsuit or a decision in the infringement case that is favorable to the applicant. The ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the branded reference drug has expired as described in further detail below. Non-Patent Exclusivity In addition to patent exclusivity, the holder of the NDA for the listed drug may be entitled to a period of non-patent exclusivity, during which the FDA cannot approve an ANDA or 505(b)(2) application that relies on the listed drug. For example, for listed drugs that were considered new chemical entities at the time of approval, an ANDA or 505(b)(2) application referencing that drug may not be filed with the FDA until the expiration of five years after approval of that drug, unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval. A drug, including one approved under Section 505(b)(2), may obtain a three-year period of exclusivity for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical studies (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted/sponsored by the applicant. In addition, drugs approved for diseases for which the patient population is sufficiently small, or orphan indications, may be entitled to a seven-year data exclusivity period. Pharmaceutical Coverage, Pricing and Reimbursement In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities. Thus, even if a product candidate is approved, sales of the product will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage, and establish adequate reimbursement levels for, the product. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication. In addition, third-party payors may impose prior authorization or step edit requirements requiring patients to have tried other therapies prior to our products for coverage. Payors may also decline to include our products or product candidates on their formulary, which means that unless healthcare providers seek a medical exception for coverage, the payors will not pay for the product. In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable marketing approvals. Nonetheless, product candidates may not be considered medically necessary or cost effective. A decision by a third-party payor not to cover a product candidate could reduce physician utilization once the product is approved and have a material adverse effect on sales, results of operations and financial condition. Additionally, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor. - 22 - Dialysis-related drugs are included in the ESRD bundled prospective payment system (PPS) for renal dialysis services furnished to Medicare beneficiaries and are grouped into functional categories such as bone and mineral metabolism, except that oral-only drugs are exempted from inclusion until 2025. In a final ESRD PPS rule published in October 2022, CMS confirmed that it intends to end the oral-only exclusion of hyperphosphatemia drugs from the ESRD PPS on January 1, 2025. At this time a TDAPA (transitional drug add-on payment adjustment) will provide separate payment for hyperphosphatemia drugs for “no less than 2 years” based on the drug’s Average Sales Price, or ASP, that will be in addition to the base rate. The incremental cost associated with the addition of this class of drugs into the bundle will be assessed in the final year of the TDAPA and the base rate will be adjusted accordingly, and no further separate payment will be provided. Although there are several details that need further clarification, including precise timing related to receiving codes to allow for reimbursement under TDAPA, which are typically assigned on a quarterly basis, the rule provides some support for our assumption that all hyperphosphatemia drugs, including Oxylanthanum Carbonate, will be included in the ESRD PPS bundle and will be eligible for separate payment initially under TDAPA. The containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus in this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Outside the United States, ensuring adequate coverage and payment for a product also involves challenges. Pricing of prescription pharmaceuticals is subject to governmental control in many countries. Pricing negotiations with governmental authorities can extend well beyond the receipt of regulatory marketing approval for a product and may require a clinical trial that compares the cost effectiveness of a product to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in commercialization. In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular drug candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval. For example, the European Union provides options for its member states to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU member states may approve a specific price for a product or they may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other member states allow companies to fix their own prices for products but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the European Union have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union. The downward pressure on health care costs in general, particularly prescription drugs, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. Political, economic, and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various EU member states, and parallel trade, i.e., arbitrage between low-priced and high-priced member states, can further reduce prices. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries. - 23 - Dialysis Organizations Protocols Dialysis organizations have their own formularies that list primary or preferred therapeutic options based on contracting status with drug manufacturers. While a prescriber may make their own independent decision to prescribe what they determine most appropriate for a given patient, any non-formulary therapeutic options are only available through an exception process based on clinical need. Similar to how payor coverage may affect the sales of a product, formulary status within dialysis organizations may affect what products are prescribed within that specific organization. Therefore, if a product is not on a formulary, the prescribers within that organization may be less likely to prescribe that product or may have a difficult time prescribing that product, resulting in less sales. Further, one dialysis organization’s determination to add a product to their formulary does not assure that other dialysis organizations will also add the product to theirs. There is always a risk a dialysis organization will not contract with a drug manufacturer for a specific product, resulting in that product not being on that organization’s formulary. Additionally, dialysis organizations typically assess a product’s efficacy before adding it to their formulary. Their process for assessing a product may differ among organizations and the timing of such assessment could delay adding such treatment to formulary, further affecting product sales. Our ability to generate product revenue and achieve profitability depends on the overall success of Oxylanthanum Carbonate, UNI-494, and any current or future product candidates, including those that may be in-licensed or acquired, which depends on several factors, including: ● obtaining adequate or favorable pricing and reimbursement from private and governmental payors for UNI-494, and any other product or product candidate, including those that may be in-licensed or acquired; ● obtaining and maintaining market acceptance of Oxylanthanum Carbonate, UNI-494, and any other product candidate, including those that may be in-licensed or acquired; ● the size of any market in which Oxylanthanum Carbonate, UNI-494, and any other product or product candidate, including those that may be in-licensed or acquired, receives approval and obtaining adequate market share in those markets; ● the timing and scope of marketing approvals for Oxylanthanum Carbonate, UNI-494, and any other product candidate, if approved, including those that may be in-licensed or acquired; ● actual or perceived advantages or disadvantages of our products or product candidates as compared to alternative treatments, including their respective safety, tolerability and efficacy profiles, the potential convenience and ease of administration and cost; ● maintaining an acceptable safety and tolerability profile of our approved products, including the frequency and severity of any side effects; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies, based, in part, on their perception of our clinical trial data and/or the actual or perceived safety, tolerability and efficacy profile; - 24 - ● establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate supplies of products that are compliant with good manufacturing practices, or GMPs, to support the clinical development and the market demand for Oxylanthanum Carbonate, UNI-494, and any other product and product candidate, including those that may be in-licensed or acquired; ● current and future restrictions or limitations on our approved or future indications and patient populations or other adverse regulatory actions or in the event that the FDA requires Risk Evaluation and Mitigation Strategies, or REMS, or risk management plans that use restrictive risk minimization strategies; ● the effectiveness of our sales, marketing, manufacturing and distribution strategies and operations; ● competing effectively with any products for the same or similar indications as our products; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents and trade secrets; and ● the impact of the COVID-19 pandemic on the above factors, including the disproportionate impact of the COVID-19 pandemic on CKD patients, the adverse impact on the phosphate binder market in which we compete, and the limitation of our sales professionals to meet in person with healthcare professionals as the result of travel restrictions or limitations on access for non-patients. Risks Related to Commercialization Our business is substantially dependent on the commercial success of Oxylanthanum Carbonate, if approved. If we are unable to successfully commercialize Oxylanthanum Carbonate, our results or operations and financial condition will be materially harmed. Our ability to generate revenue depends on our ability to execute on our commercialization plans, and the size of the market for, and the level of market acceptance of, Oxylanthanum Carbonate and any other product or product candidate, including those that may be in-licensed or acquired. If the size of any market for which a product or product candidate is approved decreases or is smaller than we anticipate, our revenue and results of operations could be materially adversely affected. Market acceptance is also critical to our ability to generate significant product revenue. Any product may achieve only limited market acceptance or none at all. If Oxylanthanum Carbonate, or any of our product candidates that is approved, is not accepted by the market to the extent that we expect or market acceptance decreases, we may not be able to generate significant product revenue and our business would be materially harmed. Market acceptance of Oxylanthanum Carbonate or any other approved product depends on a number of factors, including: ● the availability of adequate coverage and reimbursement by and the availability of discounts, rebates, and price concessions from third party payors, pharmacy benefit managers, or PBMs, and governmental authorities; ● the safety and efficacy of the product, as demonstrated in clinical trials and in the post-marketing setting; ● the prevalence and complications of the disease treated by the product; ● the clinical indications for which the product is approved and the product label approved by regulatory authorities, including any warnings or limitations that may be required on the label as a consequence of potential safety risks associated with the product; - 25 - ● the countries in which marketing approvals are obtained; ● the claims we and our collaborators are able to make regarding the safety and efficacy of the product; ● the success of our physician and patient communications and education programs; ● acceptance by physicians and patients of the product as a safe and effective treatment and the willingness of the target patient population to try new therapies and of physicians to prescribe new therapies; ● the cost, safety and efficacy of the product in relation to alternative treatments; ● the timing of receipt of marketing approvals and product launch relative to competing products and potential generic entrants; ● relative convenience and ease of administration; ● the frequency and severity of adverse side effects; ● favorable or adverse publicity about our products or favorable or adverse publicity about competing products; and ● the effectiveness of our and our collaborators’ sales, marketing, and distribution efforts. In order to market Oxylanthanum Carbonate and any other approved product, we intend to invest in sales and marketing, which will require substantial effort and significant management and financial resources. Additionally, training a sales force to successfully sell and market a new commercial product is expensive and time-consuming and could delay any commercial launch of such product candidate. We may underestimate the size of the sales force required for a successful product launch and we may need to expand our sales force earlier and at a higher cost than we anticipated. We will devote significant effort, in particular, to recruiting individuals with experience in the sales and marketing of pharmaceutical products. Competition for personnel with these skills is significant and retaining qualified personnel with experience in our industry is difficult. As a result, we may not be able to retain our existing employees or hire new employees quickly enough to meet our needs. At the same time, we may face high turnover, requiring us to expend time and resources to source, train and integrate new employees. There are risks involved with building our own sales and marketing capabilities, including the following: ● potential inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; ● potential lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines, and ● costs and expenses associated with maintaining our own sales and marketing organization. - 26 - If we are unable to build our own sales and marketing capabilities, we will not be successful in commercializing Oxylanthanum Carbonate, UNI-494, and any other product candidate that may be approved. Furthermore, if we are unable to maintain our arrangements with third parties with respect to sales and marketing, if we are unsuccessful in entering into additional arrangements with third parties to sell and market our products or we are unable to do so on terms that are favorable to us, or if such third parties are unable to carry out their obligations under such arrangements, it will be difficult to successfully commercialize our product and product candidates, including Oxylanthanum Carbonate, if approved. Our, or our partners’, failure to obtain or maintain adequate coverage, pricing and reimbursement for Oxylanthanum Carbonate, if approved, or any other future approved products, could have a material adverse effect on our or our collaboration partners’ ability to sell such approved products profitably and otherwise have a material adverse impact on our business. Market acceptance and sales of any approved products, including Oxylanthanum Carbonate and UNI-494, depends significantly on the availability of adequate coverage and reimbursement from third party payors and may be affected by existing and future healthcare reform measures. Governmental authorities, third party payors, and PBMs decide which drugs they will cover, as well as establish formularies or implement other mechanisms to manage utilization of products and determine reimbursement levels. We cannot be sure that coverage or adequate reimbursement will be available for Oxylanthanum Carbonate, UNI-494, or any of our potential future products. Even if we obtain coverage for an approved product, third party payors may not establish adequate reimbursement amounts, which may reduce the demand for our product and prompt us to reduce pricing for the product. If reimbursement is not available or is limited, we may not be able to commercialize certain of our products. Coverage and reimbursement by a governmental authority, third-party payor or PBM may depend upon a number of factors, including the determination that use of a product is: ● a covered benefit under the health plan; ● safe, effective, and medically necessary; ● appropriate for the specific patient; and ● cost effective. Obtaining coverage and reimbursement approval for a product from a governmental authority, PBM or a third-party payor is a time consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor. In the United States, there are multiple governmental authorities, PBMs and third-party payors with varying coverage and reimbursement levels for pharmaceutical products, and the timing of commencement of reimbursement by a governmental payor can be dependent on the assignment of codes via the Healthcare Common Procedural Coding System, which codes are assigned on a quarterly basis. Within Medicare, for oral drugs dispensed by pharmacies and also administered in facilities, coverage and reimbursement may vary depending on the setting. CMS, local Medicare administrative contractors, Medicare Part D plans and/or PBMs operating on behalf of Medicare Part D plans, may have some responsibility for determining the medical necessity of such drugs, and therefore coverage, for different patients. Different reimbursement methodologies may apply, and CMS may have some discretion in interpreting their application in certain settings. Additionally, we may be required to enter into contracts with third party payors and/or PBMs offering rebates or discounts on our products in order to obtain favorable formulary status and we may not be able to agree upon commercially reasonable terms with such third party payors or PBMs, or provide data sufficient to obtain favorable coverage and reimbursement for many reasons, including that we may be at a competitive disadvantage relative to companies with more extensive product lines. We currently believe it is likely that Oxylanthanum Carbonate, if approved, will be reimbursed using the Transitional Drug Add-on Payment Adjustment, or TDAPA, followed by inclusion in the bundled reimbursement model for Medicare beneficiaries. For those that obtain dialysis through commercial insurance during the 30-month coordination period or through Medicaid prior to Medicare becoming primary payer after 90 days, patients may access Oxylanthanum Carbonate through contracts we negotiate with third party payors for reimbursement of Oxylanthanum Carbonate, which would be subject to the risks and uncertainties described above. Additionally, applying for and obtaining reimbursement under the TDAPA may take an undetermined amount of time following approval, which will affect adoption, uptake, and product revenue for Oxylanthanum Carbonate during that time, and if there are updates to the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected. Further, if Oxylanthanum Carbonate is approved in the United States and included in the fixed reimbursement model for a bundle of dialysis services, or the bundle, we would be required to enter into contracts to supply Oxylanthanum Carbonate to specific dialysis providers, instead of through distributors. - 27 - The dialysis market is unique and is dominated by two providers: DaVita and Fresenius, which account for a vast majority of the dialysis population in the United States. Similar to how payor coverage may affect the sales of a product, formulary status within dialysis organizations may affect what products are prescribed within that specific organization. Therefore, if a product is not on a formulary, the prescribers within that organization may be less likely to prescribe that product or may have a difficult time prescribing that product, resulting in less sales. Further, one dialysis organization’s determination to add a product to their formulary does not assure that other dialysis organizations will also add the product to theirs. There is always a risk a dialysis organization will not contract with a drug manufacturer for a specific product, resulting in that product not being on that organization’s formulary. If any dialysis organization does not add Oxylanthanum Carbonate, to the formulary, our business may be materially harmed. In addition, we may be unable to sell Oxylanthanum Carbonate to dialysis providers on a profitable basis if CMS significantly reduces the level of reimbursement for dialysis services and providers choose to use alternative therapies or look to re-negotiate their contracts with us. Adequate coverage and reimbursement of our products by government and private insurance plans are central to patient and provider acceptance of any products for which we receive marketing approval. Further, in many countries outside the United States, a drug must be approved for reimbursement before it can be marketed or sold in that country. In some cases, the prices that we intend to charge for our products are also subject to approval. Approval by the EMA or another regulatory authority does not ensure approval by reimbursement authorities in that jurisdiction, and approval by one reimbursement authority outside the United States does not ensure approval by any other reimbursement authorities. However, the failure to obtain reimbursement in one jurisdiction may negatively impact our ability to obtain reimbursement in another jurisdiction. We may not be able to obtain such reimbursement approvals on a timely basis, if at all, and favorable pricing in certain countries depends on a number of factors, some of which are outside of our control. In addition, if Oxylanthanum Carbonate is approved outside of the United States, we plan to rely on a partner to obtain approval by reimbursement authorities outside the United States. If we are unsuccessful or delayed in entering into an agreement with a new partner, the launch of Oxylanthanum Carbonate following approval outside the United States may be delayed, which could have an adverse effect on our results of operations. We expect to face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, we do. The development and commercialization of new drugs is highly competitive and subject to rapid and significant technological change. Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the development and commercialization of Oxylanthanum Carbonate, and any other product or product candidate, including those that may be in-licensed or acquired. Oxylanthanum Carbonate will compete in the hyperphosphatemia market in the United States with other FDA-approved phosphate binders such as Renagel® (sevelamer hydrochloride) and Renvela® (sevelamer carbonate), both marketed by Sanofi, PhosLo® and Phoslyra® (calcium acetate), marketed by Fresenius Medical Care North America, Fosrenol® (lanthanum carbonate), marketed by Shire Pharmaceuticals Group plc, Velphoro® (sucroferric oxyhydroxide), marketed by Fresenius Medical Care North America, and Auryxia (ferric citrate), marketed by Akebia Therapeutics, Xphozah® (tenapanor), marketed by Ardelyx, as well as over-the-counter calcium carbonate products such as TUMS® and metal-based options such as aluminum, lanthanum and magnesium. Most of the phosphate binders listed above are now also available in generic forms. In addition, other agents are in development, including OPKO Health Inc.’s Alpharen™ Tablets (fermagate tablets) that may impact the market for Oxylanthanum Carbonate. Smaller and other early-stage companies may also prove to be significant competitors. As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval, or discovering, developing and commercializing competitive products, before, or more effectively than, we do. If we are not able to compete effectively against potential competitors, our business will not grow and our financial condition and operations will suffer. - 28 - Healthcare Reform In the United States, there have been a number of federal and state proposals during the last several years regarding the pricing of pharmaceutical products, government control and other changes to the healthcare system of the United States. It is uncertain what other legislative proposals may be adopted or what actions federal, state, or private payors may take in response to any healthcare reform proposals or legislation. We cannot predict the effect such reforms may have on our business, and no assurance can be given that any such reforms will not have a material adverse effect. By way of example, in March 2010, the Affordable Care Act (the “ACA”), was signed into law, which, among other things, includes changes to the coverage and payment for drug products under government health care programs. The law includes measures that (i) significantly increase Medicaid rebates through both the expansion of the program and significant increases in rebates, (ii) substantially expand the Public Health System (340B) program to allow other entities to purchase prescription drugs at substantial discounts, (iii) extend the Medicaid rebate rate to a significant portion of Managed Medicaid enrollees, (iv) assess a rebate on Medicaid Part D spending in the coverage gap for branded and authorized generic prescription drugs, and (v) levy a significant excise tax on the industry to fund the healthcare reform. In addition to the changes brought about by the ACA, other legislative changes have been proposed and adopted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year and reduced payments to several types of Medicare providers. Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drug products. Any proposed measures will require authorization through additional legislation to become effective. There can be no assurance that Congress or the Biden Administration intend to provide for such authorizations. The Biden administration has also undertaken other actions – and may continue to do so – signaling a change in policy from the prior Trump administration. Such activities include Executive Order 13992, revoking several Trump administration orders that had certain deregulatory effects, and a letter to the United Nations retracting the United States’ intent to withdraw from the World Health Organization. Other actions by the Biden administration and/or legislation passed by the new Congress could further impact the pharmaceutical and broader healthcare industries in ways that are difficult to predict but that could also materially impact our operations. We cannot predict what other healthcare reforms will ultimately be implemented at the federal or state level or the effect of any future legislation, executive action or regulation and, accordingly, face uncertainties that might result from additional reforms. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Healthcare Regulations Pharmaceutical companies are subject to various federal and state laws that are intended to combat health care fraud and abuse and that govern certain of our business practices, especially our interactions with third-party payors, healthcare providers, patients, customers and potential customers through sales and marketing or research and development activities. These include anti-kickback laws, false claims laws, sunshine laws, privacy laws and FDA regulation of advertising and promotion of pharmaceutical products. - 29 - Anti-kickback laws, including the federal Anti-Kickback Statute, make it a criminal offense knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward referral of an individual for, or the purchase, order or recommendation of, any good or service reimbursable by, a federal health care program (including our products). The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing, or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. The penalties for violating the federal Anti-Kickback Statute include administrative civil money penalties, imprisonment for up to five years, fines of up to $25,000 per violation and possible exclusion from federal healthcare programs such as Medicare and Medicaid. The federal civil and criminal false claims laws, including the civil False Claims Act, prohibit knowingly presenting, or causing to be presented, claims for payment to the federal government (including Medicare and Medicaid) that are false or fraudulent (and, under the Federal False Claims Act, a claim is deemed false or fraudulent if it is made pursuant to an illegal kickback). Manufacturers can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. Actions under the False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government. Violations of the False Claims Act can result in significant monetary penalties, including fines ranging from $13,508 to $27,018 for each false claim, and treble damages. The federal government is using the False Claims Act, and the accompanying threat of significant liability, in its investigation and prosecution of pharmaceutical companies throughout the country, for example, in connection with the promotion of products for unapproved uses and other improper sales and marketing practices. The government has obtained multi-million and multi-billion-dollar settlements under the False Claims Act in addition to individual criminal convictions under applicable criminal statutes. In addition, companies have been forced to implement extensive corrective action plans and have often become subject to consent decrees or corporate integrity agreements, severely restricting the manner in which they conduct their business. Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating healthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws. The Federal Civil Monetary Penalties Law prohibits, among other things, the offering or transferring of remuneration to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of Medicare or Medicaid payable items or services. Noncompliance can result in civil money penalties ranging from $10,000 to $50,000 per violation and exclusion from the federal healthcare programs. Federal criminal statutes prohibit, among other actions, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Like the federal Anti-Kickback Statute, the ACA amended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Analogous state and foreign laws and regulations, including state anti-kickback and false claims laws, may apply to products and services reimbursed by non-governmental third-party payors, including commercial payors. Additionally, there are state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or that otherwise restrict payments that may be made to healthcare providers as well as state and foreign laws that require drug manufacturers to report marketing expenditures or pricing information and register sales representatives. Sunshine laws, including the Federal Open Payments law enacted as part of the ACA, require pharmaceutical manufacturers to disclose payments and other transfers of value to physicians and certain other health care providers or professionals, and in the case of some state sunshine laws, restrict or prohibit certain such payments. Pharmaceutical manufacturers are required to submit reports to the government by the 90 th day of each calendar year. Failure to submit the required information may result in civil monetary penalties of up to an aggregate of $100,000 per year, adjusted for inflation (or up to an aggregate of $1 million per year, adjusted for inflation for “knowing failures”) for all payments, transfers of value or ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws or regulations. Certain states and foreign governments require the tracking and reporting of gifts, compensation and other remuneration to physicians. - 30 - Privacy laws, such as the privacy regulations implemented under HIPAA, restrict covered entities from using or disclosing protected health information. Covered entities commonly include physicians, hospitals and health insurers from which we may seek to acquire data to aid in our research, development, sales and marketing activities. Although pharmaceutical manufacturers are not covered entities under HIPAA, our ability to acquire or use protected health information from covered entities may be affected by privacy laws. Specifically, HIPAA, as amended by HITECH, and their respective implementing regulations, including the final omnibus rule published on January 25, 2013, imposes specified requirements relating to the privacy, security, and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” defined as independent contractors or agents of covered entities that create, receive, maintain, or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways, thus complicating compliance efforts. The FDA regulates the sale and marketing of prescription drug products and, among other things, prohibits pharmaceutical manufacturers from making false or misleading statements and from promoting products for unapproved uses. There has been an increase in government enforcement efforts at both the federal and state level. Numerous cases have been brought against pharmaceutical manufacturers under the Federal False Claims Act, alleging, among other things, that certain sales or marketing-related practices violate the Anti-Kickback Statute or the FDA’s regulations, and many of these cases have resulted in settlement agreements under which the companies were required to change certain practices, pay substantial fines and operate under the supervision of a federally appointed monitor for a period of years. Due to the breadth of these laws and their implementing regulations and the absence of guidance in some cases, it is possible that our practices might be challenged by government authorities. Violations of fraud and abuse laws may be punishable by civil and criminal sanctions including fines, civil monetary penalties, as well as the possibility of exclusion of our products from payment by federal health care programs. Government Price Reporting Government regulations regarding reporting and payment obligations are complex, and we are continually evaluating the methods we use to calculate and report the amounts owed with respect to Medicaid and other government pricing programs. Our calculations are subject to review and challenge by various government agencies and authorities, and it is possible that any such review could result either in material changes to the method used for calculating the amounts owed to such agency or the amounts themselves. Because the process for making these calculations, and our judgments supporting these calculations, involve subjective decisions, these calculations are subject to audit. In the event that a government authority challenges or finds ambiguity with regard to our report of payments, such authority may impose civil and criminal sanctions, which could have a material adverse effect on our business. From time to time we conduct routine reviews of our government pricing calculations. These reviews may have an impact on government price reporting and rebate calculations used to comply with various government regulations regarding reporting and payment obligations. Many governments and third-party payors reimburse the purchase of certain prescription drugs based on a drug’s average wholesale price (AWP). In the past several years, state and federal government agencies have conducted ongoing investigations of manufacturers’ reporting practices with respect to AWP, which they have suggested have led to excessive payments by state and federal government agencies for prescription drugs. We and numerous other pharmaceutical companies have been named as defendants in various state and federal court actions alleging improper or fraudulent practices related to the reporting of AWP. - 31 - Drug Pedigree Laws State and federal governments have proposed or passed various drug pedigree laws which can require the tracking of all transactions involving prescription drugs from the manufacturer to the pharmacy (or other dispensing) level. Companies are required to maintain records documenting the chain of custody of prescription drug products beginning with the purchase of such products from the manufacturer. Compliance with these pedigree laws requires implementation of extensive tracking systems as well as heightened documentation and coordination with customers and manufacturers. While we fully intend to comply with these laws, there is uncertainty about future changes in legislation and government enforcement of these laws. Failure to comply could result in fines or penalties, as well as loss of business that could have a material adverse effect on our financial results. Federal Regulation of Patent Litigation Settlements and Authorized Generic Arrangements As part of the Medicare Prescription Drug Improvement and Modernization Act of 2003, companies are required to file with the U.S. Federal Trade Commission (“FTC”) and the U.S. Department of Justice (the “DOJ”) certain types of agreements entered into between brand and generic pharmaceutical companies related to the settlement of patent litigation or manufacture, marketing and sale of generic versions of branded drugs. This requirement could affect the manner in which generic drug manufacturers resolve intellectual property litigation and other disputes with brand pharmaceutical companies and could result generally in an increase in private-party litigation against pharmaceutical companies or additional investigations or proceedings by the FTC or other governmental authorities. Other The U.S. federal government, various states and localities have laws regulating the manufacture and distribution of pharmaceuticals, as well as regulations dealing with the substitution of generic drugs for branded drugs. Our operations are also subject to regulation, licensing requirements and inspection by the states and localities in which our operations are located or in which we conduct business. Certain of our activities are also subject to FTC enforcement actions. The FTC also enforces a variety of antitrust and consumer protection laws designed to ensure that the nation’s markets function competitively, are vigorous, efficient and free of undue restrictions. Federal, state, local and foreign laws of general applicability, such as laws regulating working conditions, also govern us. In addition, we are subject to numerous and increasingly stringent federal, state and local environmental laws and regulations concerning, among other things, the generation, handling, storage, transportation, treatment and disposal of toxic and hazardous substances, the discharge of pollutants into the air and water and the cleanup of contamination. We are required to maintain and comply with environmental permits and controls for some of our operations, and these permits are subject to modification, renewal and revocation by the issuing authorities. Our environmental capital expenditures and costs for environmental compliance may increase in the future as a result of changes in environmental laws and regulations or increased manufacturing activities at any of our facilities. We could incur significant costs or liabilities as a result of any failure to comply with environmental laws, including fines, penalties, third-party claims and the costs of undertaking a clean-up at a current or former site or at a site to which our wastes were transported. In addition, we have grown in part by acquisition, and our diligence may not have identified environmental impacts from historical operations at sites we have acquired in the past or may acquire in the future. Employees As of March 28, 2024, we had 14 full-time employees and no part-time employees. We are not a party to any collective bargaining agreements. We believe that we maintain good relations with our employees. Our Corporate History We were incorporated as a Delaware corporation on August 18, 2016. Our principal executive offices are located at 4300 El Camino Real, Suite 210, Los Altos, CA 94022 and our telephone number is (650) 351-4495. Available Information Our website address is http://www.unicycive.com . The contents of, or information accessible through, our website are not part of this Annual Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC. The public may read and copy the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov . The information contained in the SEC’s website is not intended to be a part of this filing. - 32 -