Akebia Therapeutics Inc

Previous wording

•Vafseo™ (vadadustat) is an oral hypoxia-inducible factor prolyl hydroxylase inhibitor, approved in 37 countries as a treatment for anemia due to chronic kidney disease, or CKD. On March 27, 2024, the U.S. Food and Drug Administration, or FDA, approved Vafseo (vadadustat) Tablets for the treatment of anemia due to CKD in adults who have been receiving dialysis for at least three months. We are launching Vafseo in the U.S. and expect product availability in January 2025. We also have several lifecycle management and label expansion opportunities currently under evaluation for Vafseo, including the potential for alternative dosing and label expansion for the treatment of adult patients not on dialysis. In May 2023, we entered into a license agreement granting MEDICE Arzneimittel Pütter GmbH & Co. KG, or Medice, the rights to market and sell Vafseo in the European Economic Area, or EEA, the United Kingdom, or UK, Switzerland and Australia, or the Medice Territory, where Vafseo is approved for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. Vafseo is currently marketed and sold by Medice in certain countries in the Medice Territory. We retain the rights to develop and commercialize Vafseo in Europe for other indications. In Japan, Vafseo is approved as a treatment for anemia due to CKD in both dialysis dependent and non-dialysis dependent patients and is marketed and sold by our collaborator Mitsubishi Tanabe Pharma Corporation, or MTPC. In Taiwan and South Korea, Vafseo is approved for the treatment of symptomatic anemia due to CKD in adult patients on chronic maintenance dialysis. MTPC plans to commercialize Vafseo in Taiwan.

Current wording

•Vafseo® (vadadustat) is an oral hypoxia-inducible factor prolyl hydroxylase inhibitor, approved in 37 countries as a treatment for anemia due to chronic kidney disease, or CKD. On March 27, 2024, the U.S. Food and Drug Administration, or FDA, approved Vafseo (vadadustat) Tablets for the treatment of anemia due to CKD in adults who have been receiving dialysis for at least three months. We are launching Vafseo in the U.S. and expect product availability in January 2025. In October 2024, Centers for Medicare & Medicaid Services, or CMS, determined that Vafseo will be eligible for reimbursement under the Transitional Drug Add-on Payment Adjustment, or TDAPA, starting on January 1, 2025. We also have several lifecycle management and label expansion opportunities currently under evaluation for Vafseo, including the potential for alternative dosing and label expansion for the treatment of adult patients not on dialysis. In May 2023, we entered into a license agreement granting MEDICE Arzneimittel Pütter GmbH & Co. KG, or Medice, the rights to market and sell Vafseo in the European Economic Area, or EEA, the United Kingdom, or UK, Switzerland and Australia, or the Medice Territory, where Vafseo is approved for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. Vafseo is currently marketed and sold by Medice in certain countries in the Medice Territory. We retain the rights to develop and commercialize Vafseo in Europe for other indications. In Japan, Vafseo is approved as a treatment for anemia due to CKD in both dialysis dependent and non-dialysis dependent patients and is marketed and sold by our collaborator Mitsubishi Tanabe Pharma Corporation, or MTPC. In Taiwan and South Korea, Vafseo is approved for the treatment of symptomatic anemia due to CKD in adult patients on chronic maintenance dialysis. MTPC plans to commercialize Vafseo in Taiwan.

Previous wording

•Auryxia® (ferric citrate) is an orally administered medicine approved and marketed in the U.S. for two indications: (1) the control of serum phosphorus levels in adult patients with dialysis dependent chronic kidney disease, or DD-CKD, and (2) the treatment of iron deficiency anemia, or IDA, in adult patients with non-dialysis-dependent chronic kidney disease, or NDD-CKD. Today, we market Auryxia in the U.S. with our well-established, nephrology-focused commercial organization. Our Japanese sublicensee, Japan Tobacco, Inc., and its subsidiary, Torii Pharmaceutical Co., Ltd., collectively, JT and Torii, commercialize ferric citrate hydrate as Riona in Japan. Averoa SAS, or Averoa, has an exclusive license to develop and commercialize ferric citrate in the EEA, Turkey, Switzerland and the UK. In April 2024, Averoa submitted its marketing authorization application, or MAA, for ferric citrate in Europe.

Current wording

•Auryxia® (ferric citrate) is an orally administered medicine approved and marketed in the U.S. for two indications: (1) the control of serum phosphorus levels in adult patients with dialysis dependent chronic kidney disease, or DD-CKD, and (2) the treatment of iron deficiency anemia, or IDA, in adult patients with non-dialysis-dependent chronic kidney disease, or NDD-CKD. Today, we market Auryxia in the U.S. with our well-established, nephrology-focused commercial organization. Our Japanese sublicensee, Japan Tobacco, Inc., and its subsidiary, Torii Pharmaceutical Co., Ltd., collectively, JT and Torii, commercialize ferric citrate hydrate as Riona in Japan. Averoa SAS, or Averoa, has an exclusive license to develop and commercialize ferric citrate in the EEA, Turkey, Switzerland, UK, Turkey, Balkans and certain countries in eastern Europe and the Middle East. In April 2024, Averoa submitted its marketing authorization application, or MAA, for ferric citrate in Europe.

Previous wording

We have incurred net losses in each year since inception. Our net losses were $8.6 million and $26.6 million for the three and six months ended June 30, 2024, respectively, and $11.2 million and $38.1 million for the three and six months ended June 30, 2023, respectively. Substantially all of our net losses resulted from costs incurred in connection with the continued commercialization of Auryxia and development efforts relating to Vafseo, including conducting clinical trials of, and seeking regulatory approval for, Vafseo, and providing general and administrative support for these operations and protecting our intellectual property.

Current wording

We have incurred net losses in each year since inception. Our net losses were $20.0 million and $46.6 million for the three and nine months ended September 30, 2024, respectively, and $14.5 million and $52.5 million for the three and nine months ended September 30, 2023, respectively. Substantially all of our net losses resulted from costs incurred in connection with the continued commercialization of Auryxia and development and commercialization efforts relating to Vafseo, including conducting clinical trials of, and seeking regulatory approval for, Vafseo, and providing general and administrative support for these operations and protecting our intellectual property.

Previous wording

Due to the buying patterns of our customers, we tend to have seasonality from quarter to quarter. In general, our first quarter usually has lower revenues than the preceding fourth quarter, the second and third quarters have higher revenues than the first quarter, and the fourth quarter revenues are the highest in the year. While seasonality may affect quarterly comparisons within a fiscal year, it generally is not material to our annual consolidated financial results. However, absent further legislation or regulation, Auryxia will be included in the ESRD bundle starting in January 2025, which coupled with Auryxia's LoE in March 2025 may impact the buying patterns of our existing customers during 2024 and future years, and therefore their buying pattern in 2024 and future years may be different than their historical practices.

Current wording

Due to the buying patterns of our customers, we tend to have seasonality from quarter to quarter. In general, our first quarter usually has lower revenues than the preceding fourth quarter, the second and third quarters have higher revenues than the first quarter, and the fourth quarter revenues are the highest in the year. While seasonality may affect quarterly comparisons within a fiscal year, it generally is not material to our annual consolidated financial results. However, absent further legislation or regulation, Auryxia will be included in the end-stage renal disease, or ESRD, bundle starting in January 2025, which we believe will impact the buying patterns of some of our existing customers in the fourth quarter of 2024 and lead to lower inventory levels at certain customers in the fourth quarter of 2024. In addition, based on these changes, and coupled with Auryxia's LoE in March 2025, the buying pattern of certain customers in future years may be different than their historical practices.

Previous wording

We believe the Centers for Medicare & Medicaid Services', or CMS, decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with payors and providers to seek to continue the use of Auryxia beyond LoE.

Current wording

We believe CMS's decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with payors and providers to seek to continue the use of Auryxia beyond LoE. However, our ability to continue to generate revenue from sales of Auryxia following LoE will depend on many factors, including our ability to successfully contract with dialysis organizations, the timing and number of generics that enter the market and other products on the market that compete with Auryxia.

Previous wording

Cost of product and other revenue for a newly launched product does not include the full cost of manufacturing until the initial pre-launch inventory is depleted and additional inventory is manufactured and sold. Until we received regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory, such as raw materials, drug substance and drug product conversion costs as R&D expense.

Current wording

Cost of product and other revenue for a newly launched product does not include the full cost of manufacturing until the initial pre-launch inventory is depleted and additional inventory is manufactured and sold. Until we received regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory, such as raw materials, drug substance and drug product conversion costs as research and development, or R&D, expense.

Previous wording

Research and development, or R&D, expenses consist primarily of costs incurred for the development of Vafseo and costs associated with our pipeline which includes:

Current wording

R&D expenses consist primarily of costs incurred for the development of Vafseo and costs associated with our pipeline which includes:

Previous wording

•the cost of acquiring, developing and manufacturing clinical trial materials through contract manufacturing organizations, or CMOs;

Current wording

•the cost of acquiring, developing and manufacturing clinical trial materials through CMOs;

Previous wording

Other income (expense), net consists primarily of interest income on our interest-bearing accounts, interest expense related to our term loans, accretion of the debt discount on our term loans as well as amortization of the discount on the liability related to the termination fees associated with the termination agreement with BioVectra Inc., or BioVectra, entered into in December 2022, or the BioVectra Termination Agreement, and the amortization of the discount and deferred gain related to our refund liability to Vifor (International) Ltd. (now a part of CSL Limited), or CSL Vifor. See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the BioVectra Termination Agreement.

Current wording

Other income (expense), net consists primarily of interest income on our interest-bearing accounts, interest expense related to our term loans, accretion of the debt discount on our term loans as well as amortization of the discount on the liability related to the termination fees associated with the termination agreement with BioVectra Inc., or BioVectra, entered into in December 2022, or the BioVectra Termination Agreement. See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the BioVectra Termination Agreement. Other income (expense) also includes non-cash interest on our liability related to settlement royalties and the amortization of the discount and deferred gain related to our Working Capital Fund (as defined below) liability to Vifor (International) Ltd. (now a part of CSL Limited), or CSL Vifor. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the Company's arrangements with CSL Vifor.

Previous wording

U.S. Approval and Commercialization of Vafseo (vadadustat) Tablets

Current wording

U.S. Approval and Reimbursement of Vafseo (vadadustat)

Previous wording

See Note 7, Indebtedness, and Note 16, Subsequent Events, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Current wording

See Note 7, Indebtedness, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Previous wording

We are experiencing rising costs for certain inflation-sensitive operating expenses such as labor and certain service providers that are heavily dependent on labor. We do not believe these impacts were material to our net loss during the three and six months ended June 30, 2024 or will be going forward. However, significant sustained inflation driven by the macroeconomic environment or other factors could negatively impact our margins, profitability and results of operations in future periods.

Current wording

We are experiencing rising costs for certain inflation-sensitive operating expenses such as labor and certain service providers that are heavily dependent on labor. We do not believe these impacts were material to our net loss during the three and nine months ended September 30, 2024 or will be going forward. However, significant sustained inflation driven by the macroeconomic environment or other factors could negatively impact our margins, profitability and results of operations in future periods.

Previous wording

Net product revenue was $41.2 million for the three months ended June 30, 2024, compared to $42.2 million for the three months ended June 30, 2023. The decrease was primarily due to a reduction in volume partially offset by price increases and execution of our contracting strategy with third-party payors.

Current wording

Net product revenue was $35.6 million for the three months ended September 30, 2024, compared to $40.1 million for the three months ended September 30, 2023. The decrease was primarily due to a reduction in volume partially offset by price increases and execution of our contracting strategy with third-party payors.

Previous wording

Auryxia will lose exclusivity in the U.S. in March 2025, which may have a negative impact on revenue. We believe CMS's decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with third-party payors and providers to continue the use of Auryxia beyond LoE.

Current wording

Auryxia will lose exclusivity in the U.S. in March 2025, which may have a negative impact on revenue. We believe CMS's decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with third-party payors and providers to seek to continue the use of Auryxia beyond LoE. However, our ability to continue to generate revenue from sales of Auryxia following LoE will depend on many factors, including our ability to successfully contract with dialysis organizations, the timing and number of generics that enter the market and other products on the market that compete with Auryxia.

Previous wording

Cost of Goods Sold—Cost of Product and Other Revenue—Cost of product and other revenue was $8.0 million for the three months ended June 30, 2024 compared to $8.3 million for the three months ended June 30, 2023. The decrease was primarily due to a $4.9 million gain that we recorded during the three months ended June 30, 2024 due to our ability to commercially sell inventory previously written-down as excess inventory, which was partially offset by a charge of $2.1 million related to our firm purchase commitment liability. During the second half of 2024, we anticipate realizing lower costs of up to $3.7 million related to our ability to commercially sell inventory previously written-down as excess inventory.

Current wording

Cost of Goods Sold—Cost of Product and Other Revenue—Cost of product and other revenue was $5.2 million for the three months ended September 30, 2024 compared to $9.0 million for the three months ended September 30, 2023. The decrease was primarily due to a $3.7 million benefit that we recorded during the three months ended September 30, 2024 due to our ability to commercially sell inventory previously written-down as excess inventory and lower year-over-year sales volume.

Previous wording

R&D Expenses—R&D expenses were $7.6 million for the three months ended June 30, 2024, compared to $20.2 million for the three months ended June 30, 2023. The decrease was largely due to the completion of activities related to certain clinical trials, a reduction in consulting expenses associated with pursuing Vafseo regulatory approval in the Medice Territory and lower headcount related costs. Additionally, during the three months ended June 30, 2023, prior to receiving regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory as R&D expenses.

Current wording

R&D Expenses—R&D expenses were $8.5 million for the three months ended September 30, 2024, compared to $13.3 million for the three months ended September 30, 2023. The decrease was largely due to the completion of activities related to certain clinical trials, lower headcount related costs and decreased professional service and consulting expenses. Additionally, during the three months ended September 30, 2023, prior to receiving regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory as R&D expenses. The decrease in R&D expense was partially offset by increased costs related to the start-up of an outcomes study for Vafseo.

Previous wording

Restructuring Expenses—There was no restructuring expenses and a $0.1 million benefit to restructuring expense for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Restructuring Expenses—There were no restructuring expenses and $0.2 million of restructuring expenses for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Change in Fair Value of Warrant Liability—Change in fair value of warrant liability was $2.3 million for the three months ended June 30, 2024. There was no change in fair value of warrant liability for the three months ended June 30, 2023 since the warrant agreement was entered into in January 2024.

Current wording

Change in Fair Value of Warrant Liability—Change in fair value of warrant liability was $0.9 million for the three months ended September 30, 2024. There was no change in fair value of warrant liability for the three months ended September 30, 2023 since the warrant agreement was entered into in January 2024.

Previous wording

Net product revenue was $72.2 million for the six months ended June 30, 2024, compared to $77.0 million for the six months ended June 30, 2023. The decrease was primarily due to a reduction in volume partially offset by price increases and execution of our contracting strategy with third-party payors.

Current wording

Net product revenue was $107.8 million for the nine months ended September 30, 2024, compared to $117.1 million for the nine months ended September 30, 2023. The decrease was primarily due to a reduction in volume partially offset by price increases and execution of our contracting strategy with third-party payors.

Previous wording

Auryxia will lose exclusivity in the U.S. in March 2025, which may have a negative impact on revenue. We believe CMS's decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with third-party payors and providers to continue the use of Auryxia beyond LoE.

Current wording

Auryxia will lose exclusivity in the U.S. in March 2025, which may have a negative impact on revenue. We believe CMS's decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with third-party payors and providers to seek to continue the use of Auryxia beyond LoE. However, our ability to continue to generate revenue from sales of Auryxia following LoE will depend on many factors, including our ability to successfully contract with dialysis organizations, the timing and number of generics that enter the market and other products on the market that compete with Auryxia.

Previous wording

License, Collaboration and Other Revenue—License, collaboration and other revenue was $4.0 million for the six months ended June 30, 2024, compared to $19.4 million for the six months ended June 30, 2023. The decrease was primarily due to a one-time $10.0 million upfront payment recognized in connection with the Medice License Agreement during the six months ended June 30, 2023 as well as a reduction in revenue under our supply agreement with MTPC as a result of the assignment of our supply agreement with Esteve Química, S.A. to MTPC in December 2022. We also recognized $2.2 million in revenue in connection with the Packaging Validation Transfer Agreement we entered into with Otsuka during the six months ended June 30, 2023.

Current wording

License, Collaboration and Other Revenue—License, collaboration and other revenue was $5.9 million for the nine months ended September 30, 2024, compared to $21.4 million for the nine months ended September 30, 2023. The decrease was primarily due to a one-time $10.0 million upfront payment recognized in connection with the Medice License Agreement during the nine months ended September 30, 2023 as well as a reduction in revenue under our supply agreement with MTPC as a result of the assignment of our supply agreement with Esteve Química, S.A. to MTPC in December 2022. We also recognized $2.2 million in revenue in connection with the Packaging Validation Transfer Agreement we entered into with Otsuka during the nine months ended September 30, 2023.

Previous wording

Cost of Goods Sold—Cost of Product and Other Revenue—Cost of product and other revenue was $10.6 million for the six months ended June 30, 2024 compared to $19.5 million for the six months ended June 30, 2023. The decrease of $8.8 million was primarily due to lower year-over-year sales volume, and the realization of lower cost of product and other revenue of $8.6 million during the six months ended June 30, 2024 due to our ability to commercially sell inventory previously written-down as excess inventory, which was partially offset by a $2.1 million charge related to our firm purchase commitment liability.

Current wording

Cost of Goods Sold—Cost of Product and Other Revenue—Cost of product and other revenue was $15.8 million for the nine months ended September 30, 2024 compared to $28.5 million for the nine months ended September 30, 2023. The decrease was primarily due to a $12.3 million benefit that we recorded during the nine months ended September 30, 2024 due to our ability to commercially sell inventory previously written-down as excess inventory and lower year-over-year sales volume, which was partially offset by a $2.1 million charge related to our firm purchase commitment liability.

Previous wording

Cost of Goods Sold—Amortization of Intangible Asset—Amortization of intangible asset relates to the acquired developed product rights for Auryxia, which is being amortized using a straight-line method over its estimated useful life of approximately six years. Amortization of intangible asset during each of the six months ended June 30, 2024 and 2023 was $18.0 million and will continue through the end of 2024.

Current wording

Cost of Goods Sold—Amortization of Intangible Asset—Amortization of intangible asset relates to the acquired developed product rights for Auryxia, which is being amortized using a straight-line method over its estimated useful life of approximately six years. Amortization of intangible asset during each of the nine months ended September 30, 2024 and 2023 was $27.0 million and will continue through the end of 2024.

Previous wording

R&D Expenses—R&D expenses were $17.4 million for the six months ended June 30, 2024, compared to $39.9 million for the three months ended June 30, 2023. The decrease was largely due to the completion of activities related to certain clinical trials, a reduction in consulting expenses associated with pursuing Vafseo regulatory approval in the Medice Territory in 2023 and lower headcount related costs. Additionally, during the six months ended June 30, 2023, prior to receiving regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory as R&D expenses.

Current wording

R&D Expenses—R&D expenses were $25.9 million for the nine months ended September 30, 2024, compared to $53.2 million for the three months ended September 30, 2023. The decrease was largely due to the completion of activities related to certain clinical trials, a reduction in consulting expenses associated with pursuing Vafseo regulatory approval in the Medice Territory in 2023, lower headcount related costs, including stock-based compensation, and decreased professional service expenses. Additionally, during the nine months ended September 30, 2023, prior to receiving regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory as R&D expenses.

Previous wording

License Expenses—License expenses related to royalties due to Panion relating to sales of Riona in Japan were $1.5 million for each of the six months ended June 30, 2024 and 2023.

Current wording

License Expenses—License expenses related to royalties due to Panion relating to sales of Riona in Japan were $2.2 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Restructuring Expenses—Restructuring expenses were $0.1 million and immaterial for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Restructuring Expenses—Restructuring expenses were $0.1 million and $0.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Other Expense, Net—Other expense, net, was $4.6 million for the six months ended June 30, 2024, compared to $2.9 million for the six months ended June 30, 2023. The increase of $1.7 million was primarily due to lower interest income on our interest-bearing accounts and a decrease in sublease income due to the assignment of our lease for office space in Boston, Massachusetts.

Current wording

Other Expense, Net—Other expense, net, was $11.3 million for the nine months ended September 30, 2024, compared to $4.4 million for the nine months ended September 30, 2023. The increase was primarily due to non-cash interest expense related to the settlement royalty liability in connection with the Vifor Termination Agreement and a decrease in sublease income due to the assignment of our lease for office space in Boston, Massachusetts, or the Boston Lease. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Previous wording

Change in Fair Value of Warrant Liability—Change in fair value of warrant liability was $2.2 million for the six months ended June 30, 2024. There was no change in fair value of warrant liability for the six months ended June 30, 2023 since the warrant agreement was entered into in January 2024.

Current wording

Change in Fair Value of Warrant Liability—Change in fair value of warrant liability was $1.3 million for the nine months ended September 30, 2024. There was no change in fair value of warrant liability for the nine months ended September 30, 2023 since the warrant agreement was entered into in January 2024.

Previous wording

Loss on Extinguishment of Debt—During the six months ended June 30, 2024, we recorded $0.5 million loss on the extinguishment of debt in connection with the repayment of the Pharmakon Term Loans.

Current wording

Loss on Extinguishment of Debt—During the nine months ended September 30, 2024, we recorded $0.5 million loss on the extinguishment of debt in connection with the repayment of the Pharmakon Term Loans.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $39.5 million and restricted cash of $1.7 million.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $34.0 million and restricted cash of $1.7 million.

Previous wording

To date, we have funded our operations principally through sales of our common stock, including through our employee stock purchase plan, product sales, payments received from our collaboration and licensing partners, borrowings under term loans, a working capital payment from CSL Vifor also referred to as a refund liability and a royalty transaction. From inception through June 30, 2024, we raised approximately $838.9 million of net proceeds from the sale of equity, including $519.8 million from various underwritten public offerings, $249.1 million from at-the-market offerings pursuant to our sales agreement with Jefferies LLC and prior sales agreements with Cantor Fitzgerald & Co., and $70.0 million from the sale of 7,571,429 shares of common stock to CSL Vifor.

Current wording

To date, we have funded our operations principally through sales of our common stock, including through our employee stock purchase plan, product sales, payments received from our collaboration and licensing partners, borrowings under term loans, a working capital payment from CSL Vifor also referred to as a Working Capital Fund liability and a royalty transaction. From inception through September 30, 2024, we raised approximately $840.6 million of net proceeds from the sale of equity, including $519.8 million from various underwritten public offerings, $250.8 million from at-the-market offerings pursuant to our current sales agreement with Jefferies LLC and prior sales agreements with Jefferies LLC and Cantor Fitzgerald & Co., and $70.0 million from the sale of 7,571,429 shares of common stock to CSL Vifor.

Previous wording

We have incurred recurring losses and negative cash flow from operations in each year since inception and anticipate net losses and negative operating cash flows for the near future. We incurred net operating losses of $8.6 million and $26.6 million during the three and six months ended June 30, 2024, respectively, and $11.2 million and $38.1 million during the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and December 31, 2023, we had an accumulated deficit of $1.6 billion.

Current wording

We have incurred recurring losses and negative cash flow from operations in each year since inception and anticipate net losses and negative operating cash flows for the near future. We incurred net operating losses of $20.0 million and $46.6 million during the three and nine months ended September 30, 2024, respectively, and $14.5 million and $52.5 million during the three and nine months ended September 30, 2023, respectively. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $1.7 billion and $1.6 billion, respectively.

Previous wording

We currently have exclusive rights under a series of patents and patent applications to commercialize Auryxia in the U.S. that protect us from generic drug competition until March 2025. Following LoE, in the U.S., we may not be able to realize enough product revenue from sales of Auryxia to realize net profits from product sales. While we believe CMS's decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with payors and providers to continue the use of Auryxia beyond LoE, Auryxia product sales have not generated, and may not generate, now or following LoE in the U.S., sufficient product revenue to realize net profits from product sales to cover our current or long-term operating costs.

Current wording

We currently have exclusive rights under a series of patents and patent applications to commercialize Auryxia in the U.S. that protect us from generic drug competition until March 2025. Following LoE in the U.S. in March 2025, we may not be able to realize enough product revenue from sales of Auryxia to realize net profits from product sales. While we believe CMS's decision to include phosphate binders in the dialysis bundle could potentially lead to higher sales of Auryxia after the LoE date than in other LoE scenarios, and plan to work with payors and providers to seek to continue the use of Auryxia beyond LoE, Auryxia product sales have not generated, and may not generate, now or following LoE in the U.S., sufficient product revenue to realize net profits from product sales to cover our current or long-term operating costs. Our ability to continue to generate revenue from sales of Auryxia following LoE will depend on many factors, including our ability to successfully contract with dialysis organizations, the timing and number of generics that enter the market and other products on the market that compete with Auryxia.

Previous wording

On January 29, 2024, or the Closing Date, we entered into the BlackRock Credit Agreement, which provides for a senior secured term loan facility, in the aggregate principal amount of up to $55.0 million, or the Term Loan Facility. The Term Loan Facility is available in three tranches (i) Tranche A — $37.0 million was funded on the Closing Date and used to repay the Pharmakon Term Loans; (ii) Tranche B — $8.0 million was funded on April 19, 2024, and (iii) Tranche C — $10.0 million is available in a single draw through December 31, 2024, collectively, the Term Loans. Tranche C is available subject to receipt of a certain amount of cumulative gross cash proceeds after the Closing Date in the form of equity or equity linked securities in one or more series of transactions. The Term Loan Facility matures on January 29, 2028, or the BlackRock Maturity Date.

Current wording

Pharmakon Term Loans; (ii) Tranche B — $8.0 million was funded on April 19, 2024, and (iii) Tranche C — $10.0 million is available in a single draw through December 31, 2024, collectively, the Term Loans. Tranche C is available subject to receipt of a certain amount of cumulative gross cash proceeds after the Closing Date in the form of equity or equity linked securities in one or more series of transactions. The Term Loan Facility matures on January 29, 2028, or the BlackRock Maturity Date.

Previous wording

On July 10, 2024, in connection with the Vifor Termination Agreement, we and Kreos entered into a First Amendment to the Agreement for the Provision of a Loan Facility, which amends certain provisions of the BlackRock Credit Agreement. See Note 16, Subsequent Events, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Current wording

On July 10, 2024, in connection with the Vifor Termination Agreement, we and Kreos entered into a First Amendment to the Agreement for the Provision of a Loan Facility, which amends certain provisions of the BlackRock Credit Agreement. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Previous wording

We have recorded the Working Capital Fund as a refund liability under ASC 606, Revenue from Contracts with Customers. The refund liability is considered a debt arrangement with zero coupon interest and we impute interest on the refund liability at a rate of 15.0% per annum. As of June 30, 2024, the $40.0 million refund liability is classified as a long-term liability based on management’s estimated timing of the repayment of the refund liability to CSL Vifor exceeding one-year.

Current wording

The Working Capital Fund is considered a debt arrangement with zero coupon interest and we impute interest on the Working Capital Fund liability at a rate of 15.0% per annum. As of September 30, 2024, the $40.2 million Working Capital Fund liability is classified as a long-term liability based on management’s estimated timing of the repayment of the Working Capital Fund liability to CSL Vifor exceeding one-year.

Previous wording

We received $44.8 million from HCR, net of certain transaction expenses, which we recorded as a liability at the transaction date. We amortize the liability related to the sale of future royalties using the effective interest method over the life of the arrangement. The annual effective interest rate as of June 30, 2024 was 0%. We retain the right to receive all potential future regulatory milestones for Vafseo under the MTPC Agreement. We recorded $0.5 million and $0.9 million of non-cash royalty revenue during each of the three and six months ended June 30, 2024 and 2023, respectively. See Note 8, Deferred Revenue, Refund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information.

Current wording

We received $44.8 million from HCR, net of certain transaction expenses, which we recorded as a liability at the transaction date. We amortize the liability related to the sale of future royalties using the effective interest method over the life of the arrangement. The annual effective interest rate as of September 30, 2024 was 0%. We retain the right to receive all potential future regulatory milestones for Vafseo under the MTPC Agreement. We recorded $0.5 million and $1.4 million of non-cash royalty revenue during each of the three and nine months ended September 30, 2024 and 2023, respectively.

Previous wording

We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation. In addition, we contract with various organizations to conduct R&D activities with remaining contract costs to us of approximately $46.7 million as of June 30, 2024. The scope of the services under these R&D contracts can be modified and the contracts cancelled by us upon written notice. In some instances, the contracts may be cancelled by the third party upon written notice.

Current wording

We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non- cancellable obligations of service providers, up to the date of cancellation. In addition, we contract with various organizations to conduct R&D activities with remaining contract costs to us of approximately $47.0 million as of September 30, 2024. The scope of the services under these R&D contracts can be modified and the contracts cancelled by us upon written notice. In some instances, the contracts may be cancelled by the third party upon written notice.

Previous wording

Net cash used in operating activities was $29.5 million for the six months ended June 30, 2024. Net cash used in operating activities for the six months ended June 30, 2024 consisted of a net loss of $26.6 million reduced by net non-cash adjustments of $25.9 million, including amortization of our intangible asset of $18.0 million, a change in excess inventory purchase commitments of $2.1 million and a change in fair value of the warrant liability of $2.2 million, offset by a reduction of $28.8 million in working capital.

Current wording

Net cash used in operating activities was $36.2 million for the nine months ended September 30, 2024. Net cash used in operating activities for the nine months ended September 30, 2024 consisted of a net loss of $46.6 million reduced by net non-cash adjustments of $46.9 million, including amortization of our intangible asset of $27.0 million, a change in excess inventory purchase commitments of $2.1 million and a change in fair value of the warrant liability of $1.3 million, offset by a reduction of $36.4 million in working capital.

Previous wording

Net cash used in operating activities was $13.9 million for the six months ended June 30, 2023. Net cash used in operating activities consisted of a net loss of $38.1 million reduced by net non-cash adjustments of $24.5 million, including amortization of our intangible asset of $18.0 million, offset by a reduction of $0.3 million in working capital.

Current wording

Net cash used in operating activities was $21.1 million for the nine months ended September 30, 2023. Net cash used in operating activities consisted of a net loss of $52.5 million reduced by net non-cash adjustments of $36.0 million, including amortization of our intangible asset of $27.0 million and a noncash write-off of $0.8 million related to the termination of our Boston Lease, offset by a reduction of $4.5 million in working capital.