Akebia Therapeutics Inc

Previous wording

The following discussion and analysis should also be read in conjunction with the accompanying audited consolidated financial statements and related notes included in Part II, Item 8 of this Form 10-K. This section discusses 2023 and 2022 financial condition, and results of operations and year-to-year comparisons between 2023 and 2022. For discussion of 2022 items and year-over-year comparisons between 2022 and 2021 that are not included in this 2023 Form 10-K, refer to “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations” found in our Form 10-K/A for the year ended December 31, 2022, that was filed with the Securities and Exchange Commission on August 28, 2023.

Current wording

The following discussion and analysis should also be read in conjunction with the accompanying audited consolidated financial statements and related notes included in Part II, Item 8 of this Form 10-K. This section discusses 2024 and 2023 financial condition, and results of operations and year-to-year comparisons between 2024 and 2023. For discussion of 2023 items and year-over-year comparisons between 2023 and 2022 that are not included in this 2024 Form 10-K, refer to “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations” found in our Form 10-K for the year ended December 31, 2023, that was filed with the Securities and Exchange Commission on March 14, 2024.

Previous wording

•Vafseo™ (vadadustat) is an oral hypoxia-inducible factor prolyl hydroxylase, or HIF-PH, inhibitor, approved in 36 countries as a treatment for anemia due to CKD. In the European Union, or EU, the UK, Switzerland and Australia, vadadustat is approved under the trade name Vafseo for the treatment of symptomatic anemia associated with chronic kidney disease, or CKD, in adults on chronic maintenance dialysis. In May 2023, we entered into a License Agreement with MEDICE Arzneimittel Pütter GmbH & Co. KG, or Medice, pursuant to which we granted Medice an exclusive license to develop and commercialize vadadustat for the treatment of anemia in patients with CKD in the EEA, the UK, Switzerland and Australia, or the Medice Territory. In Japan, vadadustat is approved as a treatment for anemia due to CKD in both dialysis dependent and non-dialysis dependent patients under the trade name Vafseo, and is marketed and sold by our collaborator Mitsubishi Tanabe Pharma Corporation, or MTPC. In Taiwan, vadadustat is approved for the treatment of symptomatic anemia due to CKD in adult patients on chronic maintenance dialysis and in Korea as an anemia treatment for patients with CKD on hemodialysis. MTPC plans to commercialize vadadustat in Taiwan. We continue to pursue approval for vadadustat in the U.S., and in September 2023, we completed our resubmission to our New Drug Application, or NDA, for the treatment of anemia due to CKD for dialysis dependent patients to the U.S. Food and Drug Administration, or FDA. In October 2023, the FDA acknowledged that the resubmission was complete, classified it as a Class 2 response and set a user fee goal date, or PDUFA Date, of March 27, 2024. Beyond seeking U.S. approval, we have several lifecycle management and indication expansion opportunities currently under evaluation for vadadustat, including the potential for alternative dosing and label expansion for treatment of adult patients not on dialysis.

Current wording

In the European Union, or EU, the United Kingdom, or UK, Switzerland and Australia, Vafseo is approved for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. Our partner MEDICE Arzneimittel Pütter GmbH & Co. KG, or Medice, has an exclusive license to develop and commercialize Vafseo for the treatment of anemia in patients with CKD in defined territories and launched Vafseo in Germany, Austria, Switzerland, the Netherlands and certain other countries in Europe in 2024.

Previous wording

•Auryxia® (ferric citrate)is an an orally administered medicine approved and marketed in the United States, or 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 European Economic Area, or EEA, Turkey, Switzerland and the United Kingdom, or UK. We expect Averoa will apply for marketing authorization for ferric citrate in Europe.

Current wording

Ferric citrate hydrate has also been approved in Japan, and is marketed and sold by our Japanese sublicensee, Japan Tobacco, Inc., and its subsidiary, Torii Pharmaceutical Co., Ltd., collectively, JT and Torii, as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and for the treatment of adult patients with IDA under the trade name as Riona in Japan. Averoa SAS, or Averoa, has an exclusive license to develop and commercialize ferric citrate in the European Economic Area, or EEA, Turkey, Switzerland, the UK, the Balkans and certain countries in Eastern Europe and the Middle East. Averoa applied for marketing authorization for ferric citrate in Europe in April 2024.

Previous wording

•Our HIF-based pipeline assetsare molecules being evaluated to target areas of unmet needs in acute care settings. The discovery of hypoxia-inducible factor, or HIF, laid the foundation to explore the central role of oxygen sensing in many diseases. As we have seen through the development of vadadustat as a treatment for anemia due to CKD, when stabilized, HIF triggers wide-ranging adaptive, protective responses during hypoxic or ischemic conditions. We have selected two additional HIF molecules for preclinical development: AKB-9090, for use in an acute care setting, potentially for acute kidney disease, or AKI, or acute respiratory distress syndrome, or ARDS, and AKB-10108 for retinopathy of prematurity, or ROP, in neonates.

Current wording

Our HIF-based product candidates and other pipeline assets are being evaluated to target areas of unmet needs. The discovery of HIF laid the foundation to explore the central role of oxygen sensing in many diseases. As we have seen through the development of Vafseo as a treatment for anemia due to CKD, when stabilized, HIF triggers wide-ranging adaptive, protective responses during hypoxic or ischemic conditions. We have selected two additional HIF molecules for preclinical development: AKB-9090, potentially for cardiac surgery-related acute kidney injury, or CS-AKI, or acute respiratory distress syndrome, or ARDS, and AKB-10108 for retinopathy of prematurity, or ROP, in neonates.

Previous wording

Factors Affecting Our Performance and Results of Operation

Current wording

Factors Affecting Our Performance and Results of Operations

Previous wording

We have incurred net losses in each year since inception. Our net losses were $51.9 million and $94.2 million for the years ended December 31, 2023 and 2022, respectively. Substantially all of our net losses resulted from costs incurred in connection with the continued commercialization of Auryxia and development efforts relating to vadadustat, including conducting clinical trials of, and seeking regulatory approval for, vadadustat, 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 $69.4 million and $51.9 million for the years ended December 31, 2024 and 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, providing general and administrative support for these operations and protecting our intellectual property.

Previous wording

We generate product revenue from commercial sales of Auryxia to a limited number of wholesale distributors as well as certain specialty pharmacy providers. Our net product revenue includes many variables, including judgments and estimates of discounts, rebates and product returns, which can fluctuate from quarter-to-quarter and year-over-year. We evaluate, at least annually and more frequently, if needed, the price of Auryxia, which will lose exclusivity, or LoE, in March 2025. We expect our product revenue to continue to be generated primarily from our commercial sales of Auryxia.

Current wording

We generate product revenue from commercial sales of Auryxia in the U.S. to a limited number of customers, including dialysis organizations, wholesale distributors and certain specialty pharmacy providers. Our net product revenue includes many variables, including judgments and estimates of discounts, rebates and product returns, which can fluctuate from quarter-to-quarter and year-over-year. We evaluate, at least annually and more frequently, if needed, the price of Auryxia, which will lose exclusivity in March 2025. We expect our product revenue to continue to be generated from our commercial sales of Auryxia as well as to be generated from our commercial sales of Vafseo following its U.S. market entry in January 2025.

Previous wording

License, collaboration and other revenue includes revenue earned under collaboration agreements, license fees, royalty payments and revenue from product we supply under our license and supply agreements with our collaboration partners.

Current wording

License, collaboration and other revenue includes revenue earned under our agreements with our partners, including license fees, royalty payments and revenue from product we supply.

Previous wording

We expect to continue to generate revenue from our collaboration and, if applicable, supply agreements with Medice, MTPC, JT and Torii and any other collaborations into which we have entered or may enter, including our collaboration with Vifor (International) Ltd. (now a part of CSL Limited), or CSL Vifor, if vadadustat is approved in the U.S.

Current wording

We expect to continue to generate revenue from our collaboration, license, and supply agreements with Medice, MTPC, JT and Torii and any other collaborations into which we have entered or may enter.

Previous wording

Cost of goods sold, or COGS, - Cost of product and other revenue - COGS - Cost of product and other revenue includes costs closely correlated or directly related to the costs to manufacture commercial drug substance and drug product for Auryxia, including at our contract manufacturing organizations, or CMOs, as well as indirect costs. Direct and indirect costs include fees for packaging, shipping, insurance and quality assurance, idle capacity charges, changes in reserves for excess inventory, write-offs for inventory that fails to meet specifications or is otherwise no longer suitable for commercial sale, including scrap, changes in our firm purchase commitment liability and royalties due to the licensor of Auryxia related to U.S. and Japan product sales recognized during the period.

Current wording

Cost of goods sold, or COGS, - Cost of product and other revenue includes costs closely correlated or directly related to the costs to manufacture commercial drug substance and drug product, including at our contract manufacturing organizations, or CMOs, as well as indirect costs. Direct and indirect costs include fees for packaging, shipping, insurance and quality assurance, idle capacity charges, changes in reserves for excess inventory, write-offs for inventory that fails to meet specifications or is otherwise no longer suitable for commercial sale, including scrap, changes in our firm purchase commitment liability and royalties due to the licensor of Auryxia related to U.S. and Japan product sales recognized during the period.

Previous wording

COGS also includes costs to manufacture drug product provided to MTPC and Medice for commercial sale of Vafseo in Japan and the Medice Territory, respectively, as well as personnel-related costs, including salaries and bonuses, employee benefits and stock-based compensation attributable to employees in particular functions and associated directly with the manufacturing of our commercial products.

Current wording

COGS also includes costs to manufacture drug product provided to MTPC and Medice for commercial sale of Vafseo in Japan and the European Economic Area, or EEA, the United Kingdom, or UK, Switzerland and Australia, or the Medice Territory, respectively, as well as personnel-related costs, including salaries and bonuses, employee benefits and stock-based compensation attributable to employees in particular functions and associated directly with the manufacturing of our commercial products.

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. Unless and until we receive regulatory approval for vadadustat, in the U.S. we record 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. Likewise, the cost of product and other does not include the full cost of manufacturing until the initial pre-launch inventory, for the supply of vadadustat product to Medice which was previously expensed as R&D is depleted.

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

Cost of goods sold - Amortization of intangible asset - In addition, COGS includes the amortization of development product rights for Auryxia through the end of 2024.

Current wording

Cost of goods sold - Amortization of intangible asset - In addition, COGS included the amortization of development product rights for Auryxia through the end of 2024.

Previous wording

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

Current wording

R&D expenses consist primarily of costs incurred for the development of Vafseo prior to regulatory approval 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

•costs associated with the pre-launch inventory build for vadadustat in the U.S., for which the FDA set a PDUFA date of March 27, 2024 for our NDA resubmission, and in Europe prior to the European Commission, or EC, approval in April 2023.

Current wording

•costs associated with the pre-launch inventory build for Vafseo in the U.S. prior to FDA approval in March 2024 and in Europe prior to the European Commission, or EC, approval in April 2023.

Previous wording

We cannot determine with certainty the duration and completion costs of our R&D projects, the costs of related clinical development, or if, when, or to what extent we will generate revenue from the commercialization or sale of any of our product candidates. In addition, we may never obtain marketing approval for vadadustat in the U.S.

Current wording

We cannot determine with certainty the duration and completion costs of our R&D projects, the costs of related clinical development, or if, when, or to what extent we will generate revenue from the commercialization or sale of any of our product candidates.

Previous wording

From inception through December 31, 2023, we have incurred $1.6 billion in R&D expenses. We expect to incur significant R&D expenditures for the foreseeable future as we continue the development of Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired.

Current wording

From inception through December 31, 2024, we have incurred $1.7 billion in R&D expenses. We expect to incur significant R&D expenditures for the foreseeable future as we continue the development of Auryxia, Vafseo and any other product or product candidate, including those that may be in-licensed or acquired.

Previous wording

A significant portion of our R&D costs have been external costs, which we track on a program-by-program basis as well as costs related to possible new manufacturing processes and methods associated with our commercial product. These external costs include fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials and costs related to acquiring and manufacturing clinical trial materials, including costs paid to CMOs to manufacture clinical trial materials.

Current wording

A significant portion of our R&D costs have been external costs, which we track on a program-by-program basis as well as costs related to possible new manufacturing processes and methods associated with our commercial products. These external costs include fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials and costs related to acquiring and manufacturing clinical trial materials, including costs paid to CMOs to manufacture clinical trial materials.

Previous wording

Each of our products and product candidates has technical, clinical, regulatory, and commercial risk, including those discussed more fully under the heading “Risk Factors” in Part I, Item 1A of this Form 10-K. A change in the outcome of any of the variables with respect to the development of Auryxia, vadadustat or any other product or product candidate could result in a significant change in the costs and timing associated with that development.

Current wording

Each of our products and product candidates has technical, clinical, regulatory, and commercial risk, including those discussed more fully under the heading “Risk Factors” in Part I, Item 1A of this Form 10-K. A change in the outcome of any of the variables with respect to the development of Auryxia, Vafseo or any other product or product candidate could result in a significant change in the costs and timing associated with that development.

Previous wording

Selling, general and administrative, or SG&A, expenses consist primarily of compensation for personnel, including stock-based compensation related to commercial, marketing, executive, finance and accounting, information technology, corporate and business development and human resource functions. Other SG&A expenses include costs for marketing initiatives for our commercial products, market research and analysis on our commercial product and potential product candidates, conferences and trade shows, travel expenses, professional services fees (including legal, patent, accounting, audit, tax, and consulting fees), insurance costs, general corporate expenses and allocated facilities-related expenses, including rent and maintenance of facilities.

Current wording

Selling, general and administrative, or SG&A, expenses consist primarily of compensation for personnel, including stock-based compensation related to commercial, marketing, executive, finance and accounting, information technology, corporate and business development and human resource functions. Other SG&A expenses include costs for marketing initiatives for our commercial products, market research and analysis on our commercial products and potential product candidates, conferences and trade shows, travel expenses, professional services fees (including legal, patent, accounting, audit, tax, and consulting fees), insurance costs, general corporate expenses and allocated facilities-related expenses, including rent and maintenance of facilities.

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 changes in the fair value of our derivative liabilities, 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 CSL Vifor. See Note 10, Commitments and

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 changes in the fair value of our derivative liability and 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 consolidated financial statements included in Part II, Item 8 of this Form 10-K for further information on the BioVectra Termination Agreement. Other income (expense), net 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 consolidated financial statements included in Part II, Item 8 of this Form 10-K for further information on our arrangements with CSL Vifor.

Previous wording

On January 29, 2024, we entered into a secured term loan facility with Kreos Capital VII (UK) Limited, or Kreos, which are funds and accounts managed by BlackRock Inc., collectively BlackRock, or the BlackRock Credit Agreement, that provides for an aggregate principal amount of up to $55.0 million made available under the following three tranches:

Current wording

On February 3, 2025, we and Kreos, which are funds and accounts managed by BlackRock Inc., collectively, BlackRock, entered into the Second Amendment to the Agreement for the Provision of a Loan Facility, or the Second Amendment, which amended certain provisions of the Agreement for the Provision of a Loan Facility, dated January 29, 2024, or the BlackRock Credit Agreement. The BlackRock Credit Agreement provides for a senior secured term loan facility in the aggregate principal amount of up to $55.0 million, subject to certain customary conditions, or the Term Loan Facility.

Previous wording

On January 29, 2024, we also entered into a warrant agreement with Kreos Capital VII Aggregator SCSp, an affiliate of Kreos, pursuant to which we (i) issued a warrant to purchase 3,076,923 shares of our common stock, at an exercise price per share of $1.30 (subject to standard adjustments for stock splits, stock dividends, rights offerings and pro rata distributions), or the Exercise Price, and (ii) will issue at the time of drawdown of the Tranche C Loan, if applicable, a warrant to purchase 1,153,846 shares of our common stock, at the Exercise Price. Each warrant shall be exercisable for eight years from date of issuance.

Current wording

On February 3, 2025, in connection with the drawdown of the Extended Tranche C Loan, in accordance with the warrant agreement, dated as of January 29, 2024, between the Company and Kreos Capital VII Aggregator SCSp, or the Warrant Holder, we issued a warrant to the Warrant Holder to purchase 1,153,846 shares of our common stock, at an exercise price per share of $1.30. The warrant shall be exercisable for eight years from the date of issuance.

Previous wording

On April 7, 2022, we entered into an Open Market Sale Agreement SM, or Sales Agreement, with Jefferies LLC as agent, to sell up to $26.0 million of our common stock at current market prices from time to time. During the quarter and year ended December 31, 2023, we sold 6,189,974 shares of common stock under this program with net proceeds of $6.7 million, after deducting commissions and other offering expenses. Including the amount sold during the year ended December 31, 2023, through the date of the filing of this Form 10-K, we sold 19,451,285 shares of our common stock under the Sales Agreement with net proceeds of $25.4 million, after deducting commissions and other offering expenses.

Current wording

On September 3, 2024, in connection with the filing of a new shelf registration statement on Form S-3, we filed a prospectus related to our amended and restated sales agreement with Jefferies LLC (which amended and restated the prior sales agreement), pursuant to which we are able to offer and sell up to $75.0 million of our common stock at current market prices from time to time. Since September 12, 2024 (the date our shelf registration statement on Form S-3 went effective) through December 31, 2024, we sold 14,271,631 shares of our common stock under this program with gross proceeds of $24.3 million ($23.8 million, net of offering expenses). Including the amount sold during the year ended December 31, 2024 through the date of the filing of this Form 10-K, we sold 23,708,995 shares of our common stock under the sales agreement with gross proceeds of $43.0 million ($42.2 million, net of offering expenses).

Previous wording

In 2022, we recorded a nonrefundable, non-creditable termination fee pursuant to the terms of the Termination and Settlement Agreement, or Termination Agreement, with Otsuka Pharmaceutical Co. Ltd, or Otsuka. Furthermore, in 2023 we recorded a payment received from Otsuka, in connection with the Packaging Validation Transfer Agreement, to license, collaboration and other revenue. Also in 2022, we recorded revenue from cost sharing agreements under which we were reimbursed by our collaboration partner for expenses incurred by us for research and development, or R&D, activities and, may in the future generate revenue from potential co-promotion activities, under our collaboration agreements. We do not expect to recognize any future revenue under any of our collaboration agreements with Otsuka, which were terminated on June 30, 2022.

Current wording

CSL Vifor Termination and Settlement Agreement

Previous wording

Annually, or more frequently upon certain indicators of impairment, we review our estimates and assumptions underlying the fair value of our long-lived assets when indicators of impairment are present. If an impairment indicator exists, we perform a recoverability test by a comparison of the carrying amount of an asset or reporting unit to the future undiscounted net cash flows expected to be generated by the asset or reporting unit. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset or reporting unit.

Current wording

Comparison of the years ended December 31, 2024 and 2023

Previous wording

Product Revenue, Net—Net product revenue is derived from sales of our only commercial product in the U.S., Auryxia. We distribute Auryxia principally through a limited number of wholesale distributors as well as certain specialty pharmacy providers.

Current wording

Product Revenue, Net—Net product revenue was derived solely from sales of Auryxia in the U.S. until Vafseo's U.S. market entry in January 2025. We distribute Auryxia principally through a limited number of dialysis organizations, wholesale distributors and certain specialty pharmacy providers.

Previous wording

Net product revenue was $170.3 million for the year ended December 31, 2023, compared to net product revenue of $176.9 million for the year ended December 31, 2022. The decrease was primarily due to a reduction in volume, partially offset by price increases, favorable payor mix and execution of our contracting strategy with third party payors.

Current wording

Net product revenue was $152.2 million for the year ended December 31, 2024, compared to net product revenue of $170.3 million for the year ended December 31, 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

License, Collaboration and Other Revenue—License, collaboration and other revenue was $24.3 million for the year ended December 31, 2023, compared to $115.5 million for the year ended December 31, 2022. The decrease was due primarily to the termination of the Otsuka agreements in June 2022 under which we recognized $92.3 million and a reduction of $12.5 million in revenue recognized from the supply of drug product to MTPC, partially offset by a one-time $10.0 million upfront payment from Medice received in 2023 in connection with entering into our license agreement with Medice for their development and commercialization of vadadustat in the EU.

Current wording

License, Collaboration and Other Revenue—License, collaboration and other revenue was $8.0 million for the year ended December 31, 2024, compared to $24.3 million for the year ended December 31, 2023. The decrease was due primarily to a one-time $10.0 million upfront payment recognized in connection with the Medice License Agreement during the year ended December 31, 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 year ended December 31, 2023.

Previous wording

Cost of Goods Sold: Cost of Product and Other Revenue—Cost of product and other revenue was $38.1 million for the year ended December 31, 2023, compared to $49.5 million for the year ended December 31, 2022. The decrease was driven by lower year-over-year sales volume and a reduction in the write-downs of inventories to net realizable value in 2023. In addition, for the year ended December 31, 2023, we realized a lower cost of product and other revenue of $4.3 million due to our ability to commercially sell inventory previously written-down as excess inventory. Primarily during the first half of 2024, we anticipate realizing lower costs of up to $12.3 million related to our ability to commercially sell inventory previously written-down as excess inventory. For the year ended December 31, 2023, we recorded $1.5 million 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 $27.1 million for the year ended December 31, 2024, compared to $38.1 million for the year ended December 31, 2023. The decrease was primarily due to a $12.3 million benefit that we recorded during the year ended December 31, 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 the intangible asset during each of the years ended December 31, 2023 and 2022 was $36.0 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 was amortized using a straight-line method over its estimated useful life of approximately six years. Amortization of the intangible asset during each of the years ended December 31, 2024 and 2023 was $36.0 million. The intangible asset was fully amortized as of December 31, 2024.

Previous wording

We expect to incur significant R&D expenses in future periods in support of ongoing or planned studies with respect to the development of potential product candidates and our product candidate portfolio as well as vadadustat.

Current wording

We expect to incur significant R&D expenses in future periods in support of ongoing or planned studies with respect to the development of our product candidates as well as Vafseo.

Previous wording

License Expenses—License expense related to royalties due to Panion for sales of Riona in Japan were $3.2 million for each of the years ended December 31, 2023 and 2022.

Current wording

License Expenses—License expenses related to royalties due to Panion for sales of Riona in Japan were $3.2 million for each of the years ended December 31, 2024 and 2023.

Previous wording

Restructuring Expenses—Restructuring expenses were $0.2 million for the year ended December 31, 2023, compared to $15.9 million for the year ended December 31, 2022. Following the receipt of the complete response letter, or CRL, for vadadustat in the second quarter of 2022, we implemented a reduction of our workforce which reduced our headcount by approximately 42% and impacted all departments, including several members of senior management. On November 7, 2022, we implemented a further reduction in our workforce by approximately 14% consisting solely of individuals within the commercial organization as a result of our decision to shift to a strategic account management focused model for our commercial efforts. These actions reflected our determination to refocus our strategic priorities around our commercial product, Auryxia, and our development portfolio, and were steps in a broader cost savings plan to significantly reduce our operating expense profile. We continue to decrease our operating expenses by seeking to operate more efficiently and curtail non-headcount related expense growth. We expect to slightly increase our headcount primarily on our commercial and medical affairs teams in 2024 in connection with a vadadustat launch, if approved.

Current wording

Restructuring Expenses—Restructuring expenses were $0.1 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively.

Previous wording

Loss on Extinguishment of Debt—During the year ended December 31, 2022, we recorded a debt extinguishment loss of $0.9 million related to the principal prepayments made on the Pharmakon Term Loans pursuant to the Second Amendment and Waiver.

Current wording

Loss on Extinguishment of Debt—During the year ended December 31, 2024, we recorded a $0.5 million loss on the extinguishment of debt in connection with the repayment of the Pharmakon Term Loans.

Previous wording

Loss on Lease Termination—On May 26, 2023 we incurred a loss on lease termination of $0.5 million in connection with the assignment of our Boston Lease. In accordance with ASC 842, Leases, we wrote off the right-of-use asset and lease liability associated with the Boston Lease, and recognized the difference between the right-of-use asset and the lease liability offset by the payment we made to LG Chem Life Sciences Innovation Center, Inc. in connection with the assignment of $1.3 million. See Note 9, Leases, in the accompanying notes to the consolidated financial statements included in Part II, Item 8 of this Form 10-K for further information.

Current wording

Loss on Lease Termination—On May 26, 2023 we incurred a loss on lease termination of $0.5 million in connection with the assignment of our Boston Lease. In accordance with ASC 842, Leases, we wrote off the right-of-use asset and lease liability associated with the Boston Lease, and recognized the difference between the right-of-use asset and the lease liability offset by the $1.3 million payment we made to LG Chem Life Sciences Innovation Center, Inc. in connection with the assignment.

Previous wording

As of December 31, 2023, we had cash and cash equivalents of approximately $42.9 million and restricted cash of $1.7 million.

Current wording

As of December 31, 2024, we had cash and cash equivalents of approximately $51.9 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 December 31, 2023, we raised approximately $820.2 million of net proceeds from the sale of equity, including $519.8 million from various underwritten public offerings, $230.4 million from at-the-market offerings, or ATM 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. From January 1, 2024 through February 23, 2024, we sold 13,261,311 shares of our common stock under our Sales Agreement, resulting in proceeds to us of $18.7 million, net of offering expenses, which are not included in the above amounts reported under the ATM sales agreement.

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 December 31, 2024, we raised approximately $862.8 million of net proceeds from the sale of equity, including $519.8 million from various underwritten public offerings, $273.0 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. From January 1, 2025 through the date of the filing of this Form 10-K, we sold 9,437,364 shares of our common stock under our current sales agreement with Jefferies LLC, resulting in proceeds to us of $18.4 million, net of offering expenses, which are not included in the above amounts reported under the ATM sales agreement.

Previous wording

We have incurred recurring losses and negative cash flow from operations in each year since inception and anticipate net losses and negative cash flows for the near future. For the years ended December 31, 2023 and 2022, we incurred net operating losses of $51.9 million and $94.2 million, respectively. As of December 31, 2023 and 2022, 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 for the near future. For the years ended December 31, 2024 and 2023, we incurred net operating losses of $69.4 million and $51.9 million, respectively. As of December 31, 2024 and 2023, we had an accumulated deficit of $1.7 billion.