What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-13 compared with 2024-08-14 · 114 added, 118 removed, 356 unchanged (39% of the section changed)

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Forward Looking Statements

This Quarterly Report on Form 10-Q for the three-month

period ended June 30, 2024 contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended

(the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

This Quarterly Report on Form 10-Q for the nine-month

period ended September 30, 2024 contains “forward-looking statements” within the meaning of the Securities Act of 1933, as

amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

forward-looking statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization

efforts, business, financial condition, results of operations, strategies or prospects, and other similar matters.

These forward-looking

statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization efforts,

business, financial condition, results of operations, strategies or prospects, and other similar matters.

These forward-looking statements

are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties,

statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties,

risks and changes in circumstances that are difficult to predict.

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We are a biotechnology company dedicated to developing

treatments for kidney disease that have the potential to offer medical benefit.

treatments for kidney disease that have the potential to offer clinical benefit.

Our development programs are focused on the development

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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).

number of patients with ESRD in the U.S.

450,000 patients (~80%) take phosphate binders to control 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.

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these assets into the Company at an attractive price with limited upfront cost.

Since our formation we have devoted substantially all of our resources

to developing our product candidates.

Since our formation we have devoted substantially

all of our resources to developing our product candidates.

We have incurred significant operating losses to date.

Our net losses were $18.4 million and $11.1 million

for the six months ended June 30, 2023 and June 30, 2024, respectively.

As of June 30, 2024, we had an accumulated deficit of $75.6 million.

We expect that our operating expenses will increase significantly as we advance our product candidates through pre-clinical and clinical

development, seek regulatory approval, and prepare for and, if approved, proceed to commercialization;

acquire, discover, validate and

develop additional product candidates;

obtain, maintain, protect and enforce our intellectual property portfolio;

and hire additional

Our net losses were

$22.7 million and $15.2 million for the nine months ended September 30, 2023, and September 30, 2024, respectively.

As of September

30, 2024, we had an accumulated deficit of $79.7 million.

We expect that our operating expenses will increase significantly as we advance

our product candidates through pre-clinical and clinical development, seek regulatory approval, and prepare for and, if approved, proceed

to commercialization;

acquire, discover, validate and develop additional product candidates;

obtain, maintain, protect and enforce our

intellectual property portfolio;

and hire additional personnel.

We have funded our operations primarily from the

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Recent Developments

On March 13, 2024, we signed a securities purchase agreement with certain

healthcare-focused institutional investors that provided $50 million in gross proceeds to us through a private placement.

the securities purchase agreement, we issued to institutional investors $50.0 million in shares of our Series B Convertible Preferred

50,000 Shares of Series B Convertible Preferred Stock were issued at a price of $1,000.00 per share and are convertible into common

stock at $1.00 per share.

The COVID-19 Pandemic and its Impact on Our

In March 2020, the World Health Organization declared

the outbreak of COVID-19 a global pandemic.

This pandemic could result in difficulty securing clinical trial site locations, CROs, and/or

trial monitors and other critical vendors and consultants supporting our trial.

These situations, or others associated with COVID-19,

could cause delays in our clinical trial plans and could increase expected costs, all of which could have a material adverse effect on

our business and financial condition.

At the current time, we are unable to quantify the potential effects of this pandemic on our future

financial statements.

New Drug Application

On September 3, 2024, we submitted a New Drug Application (NDA) to the U.S.

Food and Drug Administration (FDA) for Oxylanthanum Carbonate

(OLC) for the treatment of hyperphosphatemia in patients with chronic kidney disease (CKD) on dialysis.

On November 11, 2024, we announced

that the FDA has accepted the NDA for OLC and has set a Prescription Drug User Fee Act (PDUFA) target action date of June 28, 2025.

Series B Preferred Financing

On March 13, 2024, we signed a securities purchase

agreement with certain healthcare-focused institutional investors that provided $50 million in gross proceeds to us through a private

Pursuant to the securities purchase agreement, we issued to institutional investors $50.0 million in shares of our Series B-1

Convertible Preferred Stock.

50,000 Shares of Series B-1 Convertible Preferred Stock were issued at a price of $1,000.00 per share and each share is convertible into shares of common stock at a rate equal to the initial $1,000 purchase price divided by the initial

conversion price of $1.00 per share.

On June 20, 2024, we held our annual stockholder meeting, and as a result, stockholder approval for the conversion of the Series B-1 Convertible

Preferred Stock was obtained.

On July 5, 2024, pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the

Series B Convertible Preferred Stock, the Company issued 42,118,000 shares of common stock and 7,882 shares of Series B-2 preferred stock

in settlement of the automatic conversion of the Series B-1 Convertible Preferred Stock

Components of Results of Operations

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Results of Operations

Comparison of the Three Months Ended June

Comparison of the Three Months Ended September

30, 2023 and 2024

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Three Months Ended

September 30,

Licensing revenues:

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Total other income (expenses)

Net income (loss)

Licensing Revenues

There was no Licensing revenue recorded in the

three months ended June 30, 2023 or in the three months ended June 30, 2024.

We may earn additional licensing revenue in the future if

we negotiate business development arrangements with third parties.

three months ended September 30, 2023 or in the three months ended September 30, 2024.

We may earn additional licensing revenue in the

future if we negotiate business development arrangements with third parties.

Research and Development Expenses

Research and development expenses increased by approximately $2.6 million,

or 115%, from approximately $2.3 million for the three months ended June 30, 2023, to approximately $4.9 million for the three months

ended June 30, 2024.

The increase in research and development expenses was primarily due to a $2.2 million increase in drug development

Research and development expenses decreased by

approximately $0.4 million, or 10%, from approximately $3.4 million for the three months ended September 30, 2023, to approximately $3.0

million for the three months ended September 30, 2024.

The decrease in research and development expenses was primarily due to a $0.4 million

decrease in drug development costs.

Labor costs increased $151,000 from the prior period.

Consulting and other costs increased $89,000.

Non-cash stock compensation

costs increased $200,000.

Non-cash stock compensation costs decreased $176,000.

General and Administrative Expenses

General and administrative expenses increased by $478,000, or 23%,

from approximately $2.1 million for the three months ended June 30, 2023, to approximately $2.5 million for the three months ended June

30, 2024 primarily due to an increase of $297,000 in non-cash stock compensation costs.

Insurance expense decreased $68,000.

increased $92,000 from the prior period.

General and administrative expenses increased

by 640,000, or 25%, from approximately $2.6 million for the three months ended September 30, 2023, to approximately $3.2 million for the

three months ended September 30, 2024 primarily due to an decrease of $149,000 in non-cash stock compensation costs.

Insurance expense

decreased $2,000.

Labor costs increased $76,000 from the prior period.

Travel, rent, and other costs increased $715,000.

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Other income (expenses) increased $ 0.5 million,

or 3465%, from $0.5 in the three months ended June 30, 2023 to $17.3 million for the three months ended June 30, 2024 due primarily to

a change in fair value of our warrant liability.

Comparison of the Six Months Ended June

or 34%, from $1.6 million in the three months ended September 30, 2023 to $2.2 million for the three months ended September 30, 2024 due

primarily to a change in fair value of our warrant liability.

Comparison of the Nine Months Ended September

30, 2023 and 2024

Six Months Ended

Nine months Ended

September 30,

Licensing revenues:

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Licensing revenues decreased approximately $0.7

million, or 100%, from the six months ended June 30, 2023 due to an upfront payment of approximately $0.7 million associated with a licensing

agreement entered into with Lotus International Pte Ltd.

million, or 100%, from the nine months ended September 30, 2023 due to an upfront payment of approximately $0.7 million associated with

a licensing agreement entered into with Lotus International Pte Ltd.

in February 2023.

There was no comparable revenue earned in the current period.

There was no comparable revenue earned in the current

We may earn additional licensing revenue in the future if we negotiate business development arrangements with third parties.

Research and Development Expenses

Research and development expenses increased by approximately $6.4 million,

or 121%, from approximately $5.3 million for the six months ended June 30, 2023 to approximately $11.7 million for the six months ended

June 30, 2024.

The increase in research and development expenses was primarily due to a $5.8 million increase in drug development costs.

Research and development expenses increased by

approximately $6.0 million, or 70%, from approximately $8.7 million for the nine months ended September 30, 2023 to approximately $14.7

million for the nine months ended September 30, 2024.

The increase in research and development expenses was primarily due to a $5.4 million

increase in drug development costs.

Labor costs increased $272,000 from the prior period.

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General and Administrative Expenses

General and administrative expenses increased by $1.0 million, or 26%,

from approximately $3.9 million for the six months ended June 30, 2023 to approximately $4.9 million for the six months ended June 30,

2024 primarily due to an increase of $530,000 in noncash stock compensation expense.

General and administrative expenses increased

by $1.7 million, or 26%, from approximately 6.5 million for the nine months ended September 30, 2023 to approximately $8.1 million for

the nine months ended September 30, 2024 due to an increase of $380,000 in noncash stock compensation expense.

Labor costs increased $355,000.

Insurance, travel

and other costs increased $212,000 from the prior period.

Insurance, travel and other costs increased $928,000 from the prior period.

Other Income (Expenses)

Other income (expenses) increased by $15.5 million

(income), or 156%, from $9.9 million expense in the six months ended June 30, 2023 to $5.5 million income for the six months ended June

30, 2024 due primarily to the change in fair value of our warrant liability.

(income), or 178%, from $8.7 million expense in the nine months ended September 30, 2023 to $6.8 million income for the nine months ended

September 30, 2024 due primarily to the change in fair value of our warrant liability.

Liquidity and Capital Resources

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for the commercial launch of oxylanthanum carbonate in the U.S.

On March 13, 2024, we entered into a securities purchase agreement

with certain accredited investors pursuant to which we agreed to issue and sell, in a private placement, 50,000 shares of our Series B

Convertible Preferred Stock, par value $0.001 per share at a purchase price of $1,000 per share with an initial conversion price of $1.00

per share, for an aggregate purchase price of $50.0 million.

On March 13, 2024, we entered into a securities

purchase agreement with certain accredited investors pursuant to which we agreed to issue and sell, in a private placement, 50,000 shares

of our Series B Convertible Preferred Stock, par value $0.001 per share at a purchase price of $1,000 per share with an initial conversion

price of $1.00 per share, for an aggregate purchase price of $50.0 million.

Future Funding Requirements

We have incurred net losses since our inception.

For the six months

ended June 30, 2024, we had a net loss of $11.1 million, and we expect to incur substantial additional losses in future periods.

June 30, 2024, we had an accumulated deficit of $75.6 million.

For the nine months ended September 30, 2024, we had a net loss of $15.2 million, and we expect to incur substantial additional losses

in future periods.

As of September 30, 2024, we had an accumulated deficit of $79.7 million.

We expect to continue incurring losses in the

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additional capital, the requirements for which will depend on many factors, including:

● the scope, timing, rate of

progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our

current product candidates and future product candidates;

● the number and scope of clinical

programs we decide to pursue;

● the cost, timing and outcome

of preparing for and undergoing regulatory review of our current product candidates and future product candidates;

● the scope and costs of development

and commercial manufacturing activities;

● the cost and timing associated

with commercializing our current product candidates and future product candidates, if they receive marketing approval;

● the extent to which we acquire

or in-license other product candidates and technologies;

● the costs of preparing, filing

and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related

● our ability to establish and

maintain collaborations on favorable terms, if at all;

● our efforts to enhance operational

systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current

product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval;

● the impact, if any, of the

coronavirus pandemic on our business operations;

the scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our current product candidates and future product candidates;

the number and scope of clinical programs we decide to pursue;

the cost, timing and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates;

the scope and costs of development and commercial manufacturing activities;

the cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing approval;

the extent to which we acquire or in-license other product candidates and technologies;

the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

our ability to establish and maintain collaborations on favorable terms, if at all;

our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval;

the impact, if any, of the coronavirus pandemic on our business operations;

our ability to access capital;

● our implementation of operational,

financial and management systems;

● the costs associated with being

a public company.

our implementation of operational, financial and management systems;

the costs associated with being a public company.

A change in the outcome of any of these or other

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and uses of cash for each of the periods presented below (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Net cash (used in) provided by:

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Net cash used in operating activities was $ 22.0

million for the six months ended June 30, 2024.

million for the nine months ended September 30, 2024.

Cash used in operating activities was primarily due to the use of funds for development

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Net cash used in operating activities was $13.8

million for the six months ended June 30, 2023.

million for the nine months ended September 30, 2023.

Cash used in operating activities was primarily due to the use of funds for development

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Cash Flows from Investing Activities

Net cash used in investing activities was $26,000 for the six months

ended June 30, 2024 and was due to the purchase of lab equipment.

Net cash used in investing activities was $50,000

for the six months ended June 30, 2023 and was due to the purchase of furniture and fixtures for our corporate office.

for the nine months ended September 30, 2024 and was due to the purchase of lab equipment.

Net cash used in investing activities was $12,000

for the nine months ended September 30, 2023 and was due to the purchase of furniture and fixtures for our corporate office.

Cash Flows from Financing Activities

Net cash provided by financing activities was

$44.9 million during the six months ended June 30, 2024 due primarily to the private placement financing agreement we signed on March

$44.7 million during the nine months ended September 30, 2024 due primarily to the private placement financing agreement we signed on

March 13, 2024 , partially offset by dividends paid to preferred stockholders.

Net cash provided by financing activities was

$27.8 million during the six months ended June 30, 2023 due primarily to the private placement financing agreement we signed on March

$27.7 million during the nine months ended September 30, 2023 due primarily to the private placement financing agreement we signed on

March 3, 2023.

Critical Accounting Policies, Significant Judgments and Use of Estimates

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warrant liabilities.

There have been no other material changes to our critical accounting policies and estimates during the six months

ended June 30, 2024 from those used for the year ended December 31, 2023.

There have been no other material changes to our critical accounting policies and estimates during the nine months

ended September 30, 2024 from those used for the year ended December 31, 2023.

The below policies represent our critical accounting policies.

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Warrant Liabilities

In conjunction with the issuance of Series A-1 Preferred Stock (see

Note 10), we established a warrant liability as of March 3, 2023, representing the fair value of warrants that may be issued, subject

to shareholder approval, upon conversion of the Series A-1 Preferred Stock.

We account for these warrants as liabilities (in accordance

with ASC 480, Distinguishing Liabilities from Equity ) on the balance sheets as a result of certain redemption clauses

In conjunction with the issuance of Series A-1

Preferred Stock (see Note 10), we established a warrant liability as of March 3, 2023, representing the fair value of warrants that may

be issued, subject to shareholder approval, upon conversion of the Series A-1 Preferred Stock.

We account for these warrants as liabilities

(in accordance with ASC 480, Distinguishing Liabilities from Equity ) on the balance sheets as a result of certain redemption clauses

that are not within the control of the Company.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis