Table of Co n t e n t s

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________________

FORM 10-K

____________________________________________________

(Mark One) x☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR~~For ~~THE~~the ~~FISCAL~~fiscal ~~YEAR~~year ~~ENDED~~ended ~~DECEMBER~~December 31, ~~2024~~2025

o☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR~~For ~~THE~~the ~~TRANSITION~~transition ~~PERIOD~~period ~~FROM~~from to TO

~~COMMISSION~~Commission ~~FILE~~file ~~NUMBER~~number: 001-36485

____________________________________________________

ARDELYX, INC.

(~~EXACT~~Exact ~~NAME~~Name OFof ~~REGISTRANT~~Registrant ASas ~~SPECIFIED~~Specified INin ~~ITS~~Its ~~CHARTER~~Charter)

____________________________________________________

DELAWARE			26-1303944
Delaware			26-1303944
(STATE OR OTHER JURISDICTION OF			(I.R.S. EMPLOYER
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)
INCORPORATION OR ORGANIZATION)			IDENTIFICATION NO.)
400 Fifth Avenue, Suite 210, Waltham, Massachusetts			02451
(Address of Principal Executive Offices)			(Zip Code)

400 FIFTH AVE., SUITE 210, WALTHAM, MASSACHUSETTS 02451

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

(510) 745-1700

(~~REGISTRANT~~Registrant’Ss ~~TELEPHONE~~Telephone ~~NUMBER~~Number, ~~INCLUDING~~Including ~~AREA~~Area ~~CODE~~Code)

____________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $0.0001 per share

ARDX

The Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

____________________________________________________

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x☒ No o☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o☐ No x☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No o☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes x☒ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x☒ Accelerated filer o☐ Non-accelerated filer o☐ Smaller reporting company o☐ Emerging growth company o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x☒

The aggregate market value of the Registrant’s common stock held by non-affiliates of the Registrant as of the last business day of the Registrant’s most recently completed second fiscal quarter, June 30, ~~2024~~2025, based on the last reported sales price of the Registrant’s common stock on the Nasdaq Global Market of $73.4192 per share was $1923,~~744~~706,~~324,359~~456.

The number of shares of Registrant’s Common Stock outstanding as of February 1412, ~~2025~~2026, was ~~238~~245,~~356~~247,~~222~~427.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Registrant’s Definitive Proxy Statement for its ~~2025~~2026 Annual Meeting of Stockholders, which will be filed with the Commission within 120 days of December 31, ~~2024~~2025, the close of the Registrant’s ~~2024~~2025 fiscal year, are incorporated by reference into Part III of this Report.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Unless the context requires otherwise, in this Annual Report on Form 10-K, the terms “Ardelyx,” “weCompany,” “uswe,” “~~our~~us” and “~~the Company~~our” refer to Ardelyx, Inc.

This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•estimates of our expenses, future revenue, capital requirements, our needs for additional financing and our ability to obtain additional capital; and

•other risks and uncertainties, including those under the caption “Risk Factors.”

We have based these forward-looking statements largely on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions, and these forward-looking statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control, that could cause actual outcomes or results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results or conditions to differ from those anticipated by these and other forward-looking statements include those more fully described in the “Item 1A. Risk Factors” section and elsewhere in this Annual Report on Form 10-K. Except as required by law, we assume no obligation to update any forward-looking statement publicly, or to revise any forward-looking statement to reflect events or developments occurring after the date of this Annual Report on Form 10-K, even if new information becomes available in the future. Thus, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in any such forward-looking statement.

Table of Contents

SUMMARY OF PRINCIPAL RISKS ASSOCIATED WITH OUR BUSINESS

The principal risks and uncertainties affecting our business include the following:

•We have incurred losses in each year since our inception, and if we ~~expect~~are unable to continue to ~~incur~~increase ~~operating~~revenue ~~losses~~and/or, independing ~~the~~upon our pursuit of future asbusiness opportunities, we ~~incur~~may ~~additional~~not ~~expenses~~achieve ~~related~~expected cash flow positivity, and even if we do, we may not be able to ~~our~~sustain ~~ongoing~~cash ~~operations~~flow ~~and~~positivity ~~our~~quarter ~~pursuit~~over ofquarter ~~future~~and ~~business~~year ~~opportunities~~over year.

•We ~~will~~may require additional financing for the foreseeable future as we invest in the growth of IBSRELA and XPHOZAH in the U.S. and ~~building~~build a pipeline. The inability to access necessary capital when needed on acceptable terms, or at all, could force us to ~~reduce our efforts to commercialize IBSRELA and/or XPHOZAH, or to~~ delay or limit our pursuit of other future business opportunities.

•We have generated limited revenue from product sales and may never be profitable for a full fiscal year.

•We are substantially dependent on the successful commercialization of IBSRELA, and there is no guarantee that we will maintain sufficient market acceptance for IBSRELA, grow market share for IBSRELA, secure and maintain adequate coverage and reimbursement for IBSRELA, or generate sufficient revenue from product sales of IBSRELA.

•There is no guarantee that we will achieve sufficient market acceptance for XPHOZAH, or that we will be able to secure and maintain adequate coverage and reimbursement for XPHOZAH, or generate sufficient revenue from ~~product sales of XPHOZAH.~~

~~•XPHOZAH~~Table is now included in the ESRD PPS, effective January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D, and as a result the revenue that we may generate on sales of ~~XPHOZAH will be negatively and materially impacted.~~Contents

~~•IBSRELA~~product ~~and/or~~sales of XPHOZAH. ~~may~~The ~~cause~~inclusion ~~undesirable~~of ~~side~~XPHOZAH ~~effects~~in orthe ~~have~~ESRD ~~other~~PPS ~~properties~~creates ~~that~~additional ~~could~~uncertainty ~~limit~~as to the commercial ~~success~~opportunity offor ~~the product~~XPHOZAH.

•XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D; this resulted in a negative and material impact on our XPHOZAH revenue in 2025; and the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS.

•Current and future healthcare reform legislation, regulation or action by the current administration may increase the difficulty and cost for us to commercialize our approved products and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations.

•IBSRELA and/or XPHOZAH may cause undesirable side effects or have other properties that could limit the commercial success of the products.

•Third-party payor coverage and reimbursement status of newly commercialized products are uncertain. Failure to obtain or maintain adequate coverage and reimbursement for IBSRELA and XPHOZAH could limit our ability to market those products and decrease our ability to generate revenue.

•We rely completely on third parties, including certain single-source suppliers, to manufacture IBSRELA and XPHOZAH. If they are unable to comply with applicable regulatory requirements, unable to source sufficient raw materials, experience manufacturing or distribution difficulties or are otherwise unable to manufacture sufficient quantities to meet demand, our commercialization of IBSRELA and XPHOZAH may be materially harmed.

•Our future results depend on CMOs, many of whom are our single source manufacturers.

•Our operating activities may be restricted as a result of covenants related to the indebtedness under our loan and security agreement with SLR, as amended, and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our business.

The summary risk factors described above should be read together with the text of the full risk factors below in the section ~~entitled~~titled “Risk Factors” and the other information set forth in this Annual Report on Form 10-K, including our financial statements and the related notes, as well as in other documents that we file with the U.S. SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations, and future growth prospects.

NOTE REGARDING TRADEMARKS

ARDELYX®, IBSRELA®, and XPHOZAH® are trademarks of Ardelyx. All other trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners.

Table of Co n t e n t s

ARDELYX, INC.

FORM 10-K ~~FOR~~TABLE ~~THE~~OF ~~FISCAL YEAR ENDED DECEMBER 31, 2024~~CONTENTS

~~TABLE~~FISCAL YEAR OFENDED ~~CONTENTS~~DECEMBER 31, 2025

		Page
		Page No.
	PART I
Item 1.	Business	3
Item 1A.	Risk Factors	1617
Item 1B.	Unresolved Staff Comments	5053
Item 1C.	Cybersecurity	5053
Item 2.	Properties	5155
Item 3.	Legal Proceedings	5155
Item 4.	Mine Safety Disclosures	5155
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	5256
Item 6.	[Reserved]	5257
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5257
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	6167
Item 8.	Financial Statements and Supplementary Data	6369
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	9399
Item 9A.	Controls and Procedures	9399
Item 9B.	Other Information	95101
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent ~~Inspection~~Inspections	95101
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	96102
Item 11.	Executive Compensation	96102
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	96102
Item 13.	Certain Relationships and Related Transactions, and Director Independence	96102
Item 14.	Principal Accounting Fees and Services	96102
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	97103
Item 16.	Form 10-K Summary	97103
	Signatures	~~102~~108
	Summary of Abbreviated Terms	~~104~~110

Table of Co n t e n t s

PART I

ITEM 1. BUSINESS

Overview

We are a commercial-stage biopharmaceutical company ~~founded~~focused ~~with~~on athe ~~mission~~development ~~to discover, develop~~ and ~~commercialize~~commercialization of innovative, ~~first-in-class~~ medicines that meet significant unmet medical needs. We ~~developed~~currently amarket ~~unique~~two ~~and~~therapies ~~innovative~~from ~~platform that enabled~~ the ~~discovery~~active ofingredient ~~new~~tenapanor, ~~biological~~a ~~mechanisms~~sodium/hydrogen ~~and~~exchanger ~~pathways~~(NHE3) toinhibitor ~~develop potent and efficacious therapies~~ that ~~minimize~~was ~~the~~discovered ~~side effects~~ and ~~drug-drug~~developed ~~interactions~~by ~~frequently~~Ardelyx. ~~encountered~~NHE3 ~~with~~is ~~traditional,~~an ~~systemically~~antiporter ~~absorbed~~expressed ~~medicines.~~on ~~The~~the ~~first~~apical ~~molecule~~surface weof ~~discovered~~the small and ~~developed~~large ~~was~~intestines. ~~tenapanor,~~Tenapanor is a minimally absorbed, first-in-class, oral, small molecule therapy. Tenapanor, branded as IBSRELA®, is approved in the U.S. for the treatment of adults with irritable bowel syndrome with constipation. Tenapanor, branded as XPHOZAH®, is approved in the U.S. to reduce serum phosphorus in adults with chronic kidney disease on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

Tenapanor, branded as IBSRELA®, is approved in the U.S. for the treatment of adults with irritable bowel syndrome with constipation. We believe that IBSRELA can bring meaningful benefit to the approximately 13 million Americans who suffer from the symptoms of IBS-C, many of whom continue to experience symptoms despite intervention with other therapies. We are seeking to further expand the IBSRELA eligible patient population to include patients with chronic idiopathic constipation (CIC), and have initiated a Phase 3 clinical trial evaluating tenapanor in adult CIC patients.

Tenapanor, branded as XPHOZAH®, is approved in the U.S. to reduce serum phosphorus in adults with chronic kidney disease on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy. We believe XPHOZAH can bring meaningful relief to adult chronic kidney disease patients on dialysis, the vast majority of whom have elevated levels of serum phosphorus and are unable to achieve target serum phosphorus levels with phosphate binders alone. Continually elevated levels of serum phosphorus can result in severe cardiovascular health complications.

In addition to commercializing IBSRELA and XPHOZAH, we are also developing a next-generation NHE3 inhibitor that we believe can have application across multiple therapeutic areas.

Refer to the Summary of Abbreviated Terms at the end of this Annual Report on Form 10-K for definitions of terms used throughout the document.

Strategy

We are committed to our mission of ~~discovering,~~ developing and commercializing ~~first-in-class~~innovative medicines that address unmet patient needs. Our principal strategy is to ~~maintain~~continue our commercial momentum with our current products while ~~identifying~~advancing ~~additional assets that leverage our core capabilities, including clinical, developmental~~ and ~~regulatory~~expanding ~~expertise~~a ~~and~~portfolio ~~commercial~~of ~~excellence~~important ~~while~~medicines ~~maintaining~~for apatients ~~solid~~with ~~financial~~unmet ~~foundation,~~medical ~~to support our future growth~~needs.

Our priorities include: (i) ~~accelerating~~driving significant IBSRELA growth, ~~momentum;~~ (ii) ~~executing~~maintaining ~~our~~ XPHOZAH ~~strategy~~commercial tomomentum, ~~grow utilization;~~ (iii) ~~building~~further aadvancing our pipeline ~~focused~~and onportfolio ~~areas of unmet patient need;~~ and (iv) ~~continuing~~maintaining toa ~~deliver~~solid ~~strong~~financial ~~commercial~~foundation ~~and~~to ~~financial~~support ~~performance~~our future growth.

We ~~expect~~have toincurred ~~continue~~losses toin ~~incur~~each ~~operating~~year ~~losses~~since ~~for~~our ~~the~~inception ~~foreseeable~~in ~~future~~October as2007. weWe continue to ~~invest~~incur ~~in the~~ commercialization ~~of IBSRELA and XPHOZAH~~, ~~incur manufacturing and~~ development ~~costs for tenapanor,~~ and ~~incur~~ additional expenses related to our ongoing operations and ~~our~~ pursuit of future business opportunities. We have historically funded our operations primarily from ~~the sale of common stock,~~ product sales, ~~funds~~sales ~~from~~of our ~~collaboration~~common ~~partnerships~~stock, funds from our loan agreements with SLR, funds from our collaboration partnerships, as well as ~~sales~~the sale of future royalties and commercialization milestones to HCR. We expect that we will increasingly rely on cash generated from our commercial operations to fund our operating plan while maintaining financial flexibility ~~from our ability~~ to source cash from future equity sales and debt financing.

Our Commercial Products

IBSRELA for IBS-C

IBSRELA, ~~our first commercial product,~~ is a first-in-class NHE3 inhibitor approved by the ~~U.S.~~ FDA for the treatment of IBS-C in adults. IBSRELA acts locally in the gut and is minimally absorbed. IBS-C is a gastrointestinal disorder characterized by both ~~altered~~constipation ~~bowel habits~~ and abdominal pain. IBS-C is associated with significantly impaired quality of life, reduced productivity and substantial economic burden. We recognized our first sales of IBSRELA in the U.S. in March 2022.

We ~~recognized~~deploy ~~our~~a ~~first~~market-responsive ~~sales~~commercial ofstrategy for IBSRELA and have a commercial organization highly experienced in ~~the~~commercializing ~~U.S.~~novel therapies in ~~March~~specialty ~~2022~~areas. ~~Throughout~~The ~~2024~~dynamics of the IBS-C market reflect an established patient base, welimited ~~continued~~number of competitors all confined to ~~build~~a onsingle ~~the~~mechanism ~~commercial~~of ~~success~~action (secretagogues), concentrated number of ~~IBSRELA.~~prescribers Wewho see a large number of IBS-C patients, and recognized ~~approximately~~unmet ~~$158~~need.3 ~~million~~These indynamics ~~net~~enable ~~revenue~~a ~~related~~targeted topromotional ~~sales~~focus ofon ~~IBSRELA~~IBS-C inpatients ~~the~~currently Ubeing managed by high-writing healthcare providers.S. ~~during~~Central ~~the~~to ~~year~~our ~~ended~~commercial ~~December 31,~~strategy ~~2024,~~for anIBSRELA ~~increase~~has ofbeen ~~$78.2~~our ~~million~~highly ~~compared~~experienced tospecialty ~~the~~sales ~~year~~force, ~~ended~~many ~~December 31~~with existing relationships across their gastrointestinal target base, ~~2023.~~

We deploy a market-responsive commercial strategy for IBSRELA and have a commercial organization highly experienced in launching and commercializing novel therapies into specialty areas. The dynamics of the IBS-C market reflect an established patient base, limited number of competitors all confined to a single mechanism of action (secretagogues), concentrated number of prescribers and recognized unmet need. In addition, market research indicated a favorable response to the IBSRELA product profile as a novel mechanism therapy. These dynamics enabled a targeted promotional focus on IBS-C patients currently being managed by high-writing healthcare providers. Central to our go to market strategy for IBSRELA has been our highly experienced specialty sales force, composed of many with existing relationships across their gastrointestinal target base, omnichannel digital initiatives and our patient services programs, including ArdelyxAssist, that support patient access to our therapies.

Table of Co n t e n t s

Weomnichannel ~~believe~~digital ~~competition~~initiatives ~~for IBSRELA comes largely from three prescription products indicated for IBS-C: Linzess (linaclotide), Amitiza (lubiprostone)~~ and ~~Trulance~~our ~~(plecanatide).~~patient ~~Generic~~services ~~lubiprostone is also available in the U.S. Additionally~~programs, ~~over-the-counter~~including ~~products and prescription therapies~~ArdelyxAssist, ~~not~~that ~~indicated~~support ~~for~~patient ~~IBS-C~~access ~~are commonly used~~ to ~~treat~~our ~~the constipation component of IBS-C, alone and in combination with the IBS-C-indicated prescription~~ therapies.

~~XPHOZAH~~We tobelieve ~~Reduce~~competition ~~Serum~~for ~~Phosphorus~~IBSRELA incomes ~~Adults~~largely ~~with~~from ~~CKD~~prescription onproducts ~~Dialysis~~indicated asfor ~~Add~~IBS-onC: ~~Therapy~~branded inproducts, ~~Patients~~Linzess ~~Who~~(linaclotide) ~~Have~~and anTrulance ~~Inadequate~~(plecanatide), ~~Response~~as towell ~~Phosphate~~as ~~Binders~~generic ~~or Who Are Intolerant of Any Dose of Phosphate Binder Therapy~~lubiprostone.

~~XPHOZAH,~~In ~~our~~January ~~second commercial product~~2026, ~~was~~we ~~approved~~initiated byACCEL ~~the U.S. FDA in October 2023. XPHOZAH is a first~~(ten-in03-~~class~~301), ~~phosphate~~a ~~absorption~~Phase ~~inhibitor~~3 ~~approved~~clinical intrial ~~the~~designed ~~U.S.~~ to ~~reduce~~assess ~~serum~~the ~~phosphorus~~safety inand ~~adults~~efficacy ~~with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant~~ of ~~any~~tenapanor ~~dose~~for ofthe ~~phosphate~~treatment ~~binder therapy. XPHOZAH has a differentiated mechanism~~ of ~~action and acts locally in the gut to inhibit NHE3~~CIC. ~~This~~Enrollment ~~results~~ in ~~the~~ACCEL ~~tightening~~is ofexpected ~~the~~throughout ~~epithelial cell junctions~~2026, ~~thereby~~with ~~significantly~~topline ~~reducing~~data ~~paracellular~~read ~~uptake~~out ofin ~~phosphate,~~ the ~~primary~~second ~~pathway~~half of ~~phosphate absorption~~2027. ItCIC is ~~estimated~~characterized ~~that~~by ~~there are more than 550~~difficult,~~000~~ ~~adult~~infrequent ~~patients~~or ~~with~~incomplete ~~CKD~~bowel onmovements, ~~dialysis in the U.S.~~ and ~~approximately~~is ~~80%~~associated ~~of those patients are being treated~~ with ~~phosphate~~significantly ~~lowering~~impaired ~~therapies.~~quality Inof ~~addition~~life, ~~approximately~~disrupted ~~70%~~productivity ofand ~~patients~~high ~~treated with phosphate binders to treat hyperphosphatemia were unable to consistently maintain phosphorous levels <=5.5 mg/dL over a six~~healthcare-~~month~~related ~~period.~~costs ~~XPHOZAH~~and is ~~the~~estimated ~~first~~to ~~therapy~~affect ~~for~~more ~~phosphate~~than ~~management~~34 ~~that~~million ~~blocks phosphate absorption at the primary site of uptake~~Americans.

~~We recognized our first sales of~~ XPHOZAH infor ~~the~~Hyperphosphatemia ~~U.S.~~ in ~~December~~CKD ~~2023.~~Patients Weon ~~recognized approximately $160.9 million in net revenue related to sales of XPHOZAH in the U.S. during the year ended December 31, 2024 – the first full year of commercialization of XPHOZAH.~~Dialysis

~~For~~XPHOZAH ~~our~~was ~~commercial~~approved ~~launch~~by ofthe ~~XPHOZAH,~~FDA wein ~~designed~~October 2023. XPHOZAH is a ~~market~~first-~~responsive~~in-class ~~commercial~~phosphate ~~strategy~~absorption ~~and~~inhibitor ~~built~~approved ain ~~commercial~~the ~~organization~~U.S. ~~highly~~to ~~experienced~~reduce ~~and~~serum ~~knowledgeable~~phosphorus ofin ~~the~~adults ~~nephrology~~with ~~market.~~CKD ~~The~~on ~~dynamics~~dialysis ofas ~~the~~add-on ~~hyperphosphatemia~~therapy ~~market~~in ~~reflect~~patients who have an ~~established~~inadequate ~~patient~~response ~~base,~~to ~~limited~~phosphate ~~number~~binders or who are intolerant of ~~competitors~~any ~~all~~dose ~~confined~~of tophosphate binder therapy. XPHOZAH has a ~~single~~differentiated mechanism of action ~~(phosphate~~and ~~binders),~~acts ~~concentrated~~locally ~~number~~in ofthe ~~prescribers~~gut ~~and~~to ~~recognized~~inhibit ~~unmet need~~NHE3. InThis ~~addition~~results in the tightening of the epithelial cell junctions, ~~market~~thereby ~~research~~significantly ~~indicated~~reducing aparacellular ~~high~~uptake ~~level~~of phosphate, the primary pathway of ~~awareness~~phosphate absorption. It is estimated that there are more than 550,000 ~~interest~~adult ~~and~~patients ~~intent~~with toCKD ~~adopt~~on ~~XPHOZAH~~dialysis ~~upon~~in ~~approval~~the U.S. and ~~favorable~~approximately ~~response~~80% toof ~~the~~those ~~XPHOZAH~~patients ~~product~~are ~~profile~~being astreated awith ~~novel~~phosphate ~~mechanism~~lowering ~~therapy~~therapies. ~~Central~~In addition, approximately 70% of patients treated with phosphate binders to ~~our~~treat gohyperphosphatemia were unable to ~~market~~consistently ~~strategy~~maintain ~~for~~phosphorous ~~XPHOZAH~~levels ~~has~~<=5.5 ~~been~~mg/dL ~~our~~over ~~highly~~a ~~experienced~~six-month ~~specialty~~period. ~~sales~~XPHOZAH ~~force,~~is ~~many~~the ~~with~~first ~~existing~~therapy ~~relationships~~for ~~across~~phosphate ~~their~~management ~~nephrology~~that ~~target~~blocks ~~base,~~phosphate ~~innovative~~absorption ~~omnichannel~~at ~~digital~~the ~~initiatives~~primary ~~and~~site ~~our~~of ~~patient~~uptake. ~~services~~We ~~programs,~~recognized ~~including~~our ~~ArdelyxAssist,~~first ~~that~~sales ~~support~~of ~~patient~~XPHOZAH ~~access~~in tothe ~~our~~U.S. ~~therapies~~in December 2023.

~~Beginning~~We ~~January~~have 1,a ~~2025,~~commercial ~~XPHOZAH,~~organization ~~along~~highly ~~with~~experienced ~~other~~and ~~oral~~knowledgeable ~~ESRD~~of ~~related~~the ~~drugs~~nephrology ~~without~~market. ~~injectable~~The ordynamics ~~intravenous~~of ~~equivalents, are now included in~~ the ~~End-Stage~~hyperphosphatemia ~~Renal~~market ~~Disease~~reflect ~~Prospective~~an ~~Payment~~established ~~System~~patient base, ~~thereby~~limited ~~eliminating~~number ~~coverage~~of ~~for~~competitors ~~XPHOZAH~~all ~~and~~confined ~~these~~to ~~other~~a ~~ESRD~~single ~~related~~mechanism ~~drugs~~of ~~under~~action ~~Medicare~~(phosphate ~~Part~~binders), Dconcentrated asnumber of ~~such~~prescribers ~~date.~~and ~~XPHOZAH~~significant ~~patients~~unmet ~~with~~need. ~~Medicare~~Central ~~Part~~to Dour ~~accounted~~commercial ~~for~~strategy ~~approximately~~is ~~60%~~our ofhighly ~~all~~experienced ~~XPHOZAH~~specialty ~~patients~~sales inforce, ~~2024.~~many ~~Our~~with ~~strategy~~existing ~~for~~relationships ~~XPHOZAH~~across ~~remains~~the ~~a targeted promotional focus on~~ nephrology ~~healthcare~~target ~~providers~~base, ~~with~~innovative aomnichannel ~~focus~~digital oninitiatives ~~preserving~~and ~~access~~our ~~for~~patient ~~patients~~services ~~determined~~programs, toincluding beArdelyxAssist, ~~appropriate~~that ~~candidates~~support ~~for~~patient ~~XPHOZAH~~access byto ~~their~~our ~~healthcare provider~~therapies.

~~XPHOZAH~~On isJanuary ~~indicated~~1, to2025, ~~reduce~~XPHOZAH, ~~serum~~along ~~phosphorus~~with inother ~~adults~~oral ~~with~~drugs ~~CKD~~for ESRD patients on dialysis aswithout ~~add-on~~injectable ~~therapy~~or inintravenous ~~patients~~equivalents, ~~who~~became ~~have~~part anof ~~inadequate~~the ~~response~~ESRD toProspective ~~phosphate~~Payment ~~binders~~System orand ~~who~~coverage ~~are~~for ~~intolerant~~XPHOZAH ofand ~~any~~these ~~dose~~other oforal ~~phosphate~~drugs ~~binder~~under ~~therapy~~Medicare Part D was eliminated. ~~The~~We ~~various~~made ~~types~~the ofdecision ~~phosphate~~to ~~binders~~preserve ~~commercialized~~access into ~~the~~XPHOZAH ~~U.S.~~for ~~include~~all ~~the~~appropriate ~~following:~~patients. ~~Calcium~~Although ~~acetate~~more ~~(several~~patients ~~prescription~~had ~~brands~~access ~~including~~to ~~PhosLo~~XPHOZAH and ~~Phoslyra);~~we ~~Lanthanum~~increased ~~carbonate~~the ~~(Fosrenol);~~number ~~Sevelamer~~of ~~hydrochloride~~patients ~~(Renagel);~~on ~~Sevelamer~~treatment ~~carbonate~~compared ~~(Renvela);~~to ~~Sucroferric~~2024, ~~oxyhydroxide~~the ~~(Velphoro)~~change ~~and~~in ~~Ferric~~Medicare ~~citrate~~reimbursement ~~(Auryxia).~~coverage ~~All~~had ofa ~~the~~negative ~~listed~~and ~~phosphate~~material ~~binders~~impact ~~are~~on ~~available~~our asXPHOZAH ~~generics~~revenue in ~~the U~~2025.~~S.,~~ ~~with~~Our ~~the~~strategy ~~exception~~for ofXPHOZAH ~~Velphoro~~remains ~~and~~a ~~Auryxia.~~targeted ~~Additionally,~~promotional ~~over-the-counter~~focus ~~calcium~~on ~~carbonate,~~nephrology ~~such~~healthcare asproviders ~~Tums~~to ~~and~~preserve ~~Caltrate~~access for patients, isregardless ~~also~~of ~~used~~insurance coverage, determined to ~~bind~~be ~~phosphorus~~appropriate candidates for XPHOZAH by their healthcare provider.

InXPHOZAH ~~addition~~is indicated to ~~the~~reduce ~~currently~~serum ~~available~~phosphorus ~~phosphate~~in ~~binders,~~adults wewith ~~are~~CKD ~~aware~~on ofdialysis atas ~~least~~add-on ~~four~~therapy ~~phosphate~~in ~~binders~~patients inwho ~~development,~~have ~~including~~an ~~AP-301,~~inadequate ~~developed~~response byto ~~Alebund~~phosphate ~~Pharmaceutical~~binders ~~(Hong~~or ~~Kong)~~who ~~Limited~~are ~~and~~intolerant ~~currently~~of inany ~~Phase~~dose 3;of ~~VS-505,~~phosphate ~~developed~~binder bytherapy. ~~Vidasym~~The ~~and~~various ~~currently~~types inof ~~clinical~~phosphate ~~development;~~binders ~~TS-172,~~commercialized ~~developed~~in bythe ~~Taisho~~U.S. ~~Pharmaceuticals~~include ~~and~~the ~~currently~~following: inCalcium ~~Phase~~acetate 2;(several ~~and~~prescription ~~OLC~~brands, ~~developed~~including byPhosLo ~~Unicycive~~and ~~Therapeutics,~~Phoslyra); ~~which~~Lanthanum ~~has~~carbonate ~~announced~~(Fosrenol); ~~its~~Sevelamer ~~plans~~hydrochloride to(Renagel); ~~seek~~Sevelamer ~~U.S.~~carbonate ~~FDA~~(Renvela); ~~approval~~Sucroferric ~~via~~oxyhydroxide ~~the 505~~(bVelphoro) and Ferric citrate (2Auryxia) ~~pathway~~. ~~OLC~~All ~~has~~of ~~demonstrated~~the ~~pharmacodynamic~~listed ~~bioequivalence~~phosphate tobinders ~~Fosrenol.~~are ~~Additionally,~~available ~~Alebund~~as isgenerics ~~developing~~in ~~AP-306~~the U.S., anwith ~~inhibitor~~the exception of ~~phosphate~~Velphoro. ~~transporters NaPi-2b~~Additionally, ~~PiT~~over-1,the-counter ~~and~~calcium ~~PiT-2~~carbonate, ~~thus~~such ~~far~~as ~~studied~~Tums inand aCaltrate, ~~Phase~~is 2also ~~clinical~~used ~~trial~~to bind phosphorus.

In addition to the currently available phosphate binders, we are aware of at least four phosphate binders in development, including AP-301, developed by Alebund Pharmaceutical (Hong Kong) Limited; VS-505, developed by Vidasym; TS-172, developed by Taisho Pharmaceutical; and OLC, developed by Unicycive Therapeutics. Additionally, Alebund is developing AP-306, an inhibitor of phosphate transporters NaPi-2b, PiT-1, and PiT-2.

Our Commercial Strategy

We have established a high-quality commercial organization ~~highly experienced in bringing novel products to our customers~~, ~~including~~with ~~patients, payors and healthcare providers. Our commercial~~ capabilities, including marketing, market access, patient services and sales ~~are~~ designed to support our commercialization of IBSRELA and XPHOZAH. We have executed collaborations with established industry leaders to efficiently bring XPHOZAH and IBSRELA to patients in specific territories outside of the U.S. We continue to evaluate our strategy for the commercialization of IBSRELA and XPHOZAH in ex-U.S. territories.

Table of Co n t e n t s

WeProduct ~~continue to evaluate our strategy for the commercialization of IBSRELA and XPHOZAH in other ex-U.S. territories.~~ Pipeline

Label Extension for IBSRELA to Treat Patients with CIC

In September 2025, we submitted an IND application to the FDA for IBSRELA to expand the IBSRELA eligible patient population to include patients with CIC. In January 2026, we initiated ACCEL (ten-03-301), a Phase 3 clinical trial designed to assess the safety and efficacy of tenapanor for the treatment of CIC. Enrollment in ACCEL is expected throughout 2026, with topline data read out in the second half of 2027. CIC is characterized by difficult, infrequent or incomplete bowel movements, and is associated with significantly impaired quality of life, disrupted productivity and high healthcare-related costs. CIC is estimated to affect more than 34 million Americans. Pending the outcome of the Phase 3 clinical trial, if successful, we intend to submit a supplemental NDA to the FDA for tenapanor for the CIC indication.

Discovery and Development Asset

In October 2025, we announced a development program for RDX10531. We believe RDX10531 is a next-generation NHE3 inhibitor with potential application across multiple therapeutic areas. We are currently conducting activities to support an IND submission to the FDA for RDX10531 in the second half of 2026.

Collaboration Partners

We ~~enter~~have entered into collaboration agreements with third parties for the development and commercialization of tenapanor for certain indications in their respective territories. In exchange for granting the respective licenses, we receive upfront payments upon contract execution, are eligible to receive development and regulatory milestones upon achievement of respective events, and are eligible to receive sales-based royalties and ~~commercial~~commercialization milestones. We also enter into supply agreements with our partners to supply drug substance or finished product for a fee.

We have an exclusive license agreement with ~~Kyowa~~Knight ~~Kirin~~ for the development, commercialization and distribution of tenapanor in ~~Japan~~Canada for ~~cardiorenal~~hyperphosphatemia ~~indications.~~and ~~We supply tenapanor drug substance to satisfy Kyowa Kirin commercial needs~~IBS-C. InIBSRELA ~~February~~was ~~2024,~~launched ~~Kyowa Kirin announced the launch of tenapanor, marketed as PHOZEVEL®, for CKD patients with hyperphosphatemia~~ in ~~Japan.~~Canada ~~As discussed~~ in ~~Note~~March 82021. ~~Deferred~~We ~~Royalty~~supply ~~Obligation~~IBSRELA ~~Related~~drug Toproduct ~~The~~packaged ~~Sale~~for ~~Of Future Royalties,~~ the ~~future~~Canadian ~~royalties~~market ~~and commercial milestone payments we may receive under the license, as amended, will be remitted~~ to ~~HCR~~Knight ~~pursuant~~ to ~~the~~satisfy ~~HCR~~Knight’s ~~Agreement~~commercial needs.

We have an exclusive license agreement with ~~Fosun~~Kyowa ~~Pharma~~Kirin for the development, commercialization and ~~commercialization~~distribution of tenapanor in ~~China~~Japan for ~~both~~cardiorenal ~~hyperphosphatemia~~indications. ~~and~~We ~~IBS-C~~supply tenapanor drug substance to satisfy Kyowa Kirin’s commercial needs. ~~Fosun~~In ~~Pharma~~February ~~received~~2024, ~~approval~~Kyowa ~~from~~Kirin announced the ~~Hong~~launch ~~Kong~~of ~~Department~~tenapanor, ofmarketed ~~Health~~as PHOZEVEL®, for ~~the~~CKD ~~marketing~~patients ~~application~~with ~~for~~hyperphosphatemia ~~tenapanor~~in ~~for~~Japan. As discussed in Note 8. Deferred Royalty Obligation Related to the ~~treatment~~Sale of ~~IBS-C~~Future inRoyalties, ~~2023.~~the Afuture ~~New~~royalties ~~Drug~~and ~~Application~~commercialization ~~for~~milestone ~~tenapanor~~payments ~~for~~we ~~hyperphosphatemia~~may ~~has~~receive ~~been~~under ~~submitted~~the inlicense, ~~China~~as ~~with~~amended, ~~Fosun~~will ~~Pharma~~be remitted to HCR pursuant to the HCR Agreement.

We have an exclusive license agreement with ~~Knight~~Fosun Pharma for the development, ~~commercialization~~ and ~~distribution~~commercialization of tenapanor in ~~Canada~~China for both hyperphosphatemia and IBS-C. ~~IBSRELA~~In ~~was~~February ~~launched~~2025, inwe ~~Canada~~announced the approval of an NDA for tenapanor for the control of hyperphosphatemia in ~~March~~adult ~~2021~~patients with CKD undergoing hemodialysis by China’s Center for Drug Evaluation of the NMPA.

We have an exclusive license agreement with METiS for the development and commercialization of a portfolio of TGR5 agonist compounds that we discovered and developed for all therapeutic areas.

Corporate Financings

In January 2023, we ~~filed~~entered ainto ~~registration~~the ~~statement on Form S-3, which became effective in January~~ 2023, ~~containing~~Open ~~(i)~~Market aSales ~~base~~Agreement prospectus for the offering, issuance and sale by us of up to a maximum aggregate offering price of $250.0 million of our common stock, preferred stock, debt securities, warrants and/or units, from time to time in one or more offerings; and (ii) a prospectus supplement for the offering, issuance and sale by us of up to a maximum aggregate offering price of $150.0 million of our common stock that may be issued and sold, from time to time, under a sales agreement with Jefferies, ~~deemed~~with respect to bean “at-the-market ~~offerings~~offering” ~~(2023~~program, ~~Open~~which ~~Market~~was ~~Sales~~established ~~Agreement). Pursuant~~under to the ~~2023~~Company’s ~~Open~~shelf ~~Market~~registration ~~Sales~~statement ~~Agreement,~~on ~~Jefferies,~~Form asS-3 ~~sales~~and ~~agent,~~expired ~~may~~in ~~receive~~January ~~a commission of up to 3~~2026.0% ofUnder the ~~gross sales price for shares of common stock sold under the~~ 2023 Open Market Sales Agreement~~. As of December 31~~, ~~2024,~~ we ~~have~~sold ~~completed~~a ~~sales~~total ~~pursuant to the 2023 Open Market Sales Agreement resulting in the issuance~~ of 16.8 million shares of our common stock and ~~receipt~~received of gross proceeds of $70.0 million at a weighted average sales price of approximately $4.17. During the year ended December 31, 2025, we did not sell any shares under the 2023 Open Market Sales Agreement.

WeIn ~~have~~November a2025, ~~loan~~we ~~and~~filed ~~security~~an ~~agreement~~automatic shelf registration statement on Form S-3ASR, which became effective upon filing, containing (asi) ~~amended~~a base prospectus, which covers the ~~2022~~offering, ~~Loan~~issuance ~~Agreement~~and sale from time to time in one or more offerings of our common stock, preferred stock, debt securities, warrants and/or units; and (ii) ~~with~~a ~~SLR.~~prospectus ~~The~~supplement ~~2022~~for ~~Loan~~the ~~Agreement~~offering, ~~provides~~issuance and sale of up to a ~~total~~maximum aggregate offering price of $~~200~~100.0 million, of ~~which~~our ~~$150.0 million~~common ~~has~~stock ~~been~~that ~~drawn~~may asbe ofissued ~~December 31~~and sold from time to time, ~~2024~~under the 2025 Open Market Sales Agreement, deemed to ~~support~~be ~~our~~“at-the-market ~~ongoing~~offerings.” ~~operations~~Pursuant ~~and~~to the ~~commercial~~2025 ~~launches~~Open Market Sales Agreement, Jefferies, as sales agent, may receive a commission of ~~IBSRELA~~up ~~and~~to ~~XPHOZAH.~~three percent of the gross

As of December 31, 2024, we had cash, cash equivalents and short-term investments totaling $250.1 million, an increase of $65.8 million, or 35.7%, from our cash position as of December 31, 2023.

Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our products, drug candidates, manufacturing and process discoveries and other know-how, to operate without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our intellectual property by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology and inventions that are important to the development and operation of our business. We also rely on trade secrets and careful monitoring of our proprietary information to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Table of Co n t e n t s

~~are~~sales ~~currently~~price ~~pursuing~~for ~~will~~shares ~~issue as patents in any particular jurisdiction or whether the claims~~ of our ~~issued~~common ~~patents~~stock ~~will~~sold ~~provide~~under ~~sufficient~~the ~~proprietary~~2025 ~~protection~~Open ~~from~~Market ~~competitors~~Sales Agreement. ~~Any~~As ~~patents~~of ~~that we hold may be challenged~~December 31, ~~circumvented or invalidated by third parties. If third parties prepare and file patent applications in the U.S. that also claim technology or therapeutics to which we have rights~~2025, wethere ~~may~~ have tobeen ~~participate~~no insales ~~interference proceedings in the USPTO to determine priority~~ of ~~invention,~~our ~~which~~common ~~would~~stock ~~result~~under ~~in substantial costs to us even if~~ the ~~eventual~~2025 ~~outcome~~Open isMarket ~~favorable~~Sales ~~to us~~Agreement.

We have a loan and security agreement (as amended, the 2022 Loan Agreement) with SLR. The 2022 Loan Agreement provides a total of $300.0 million, of which $200.0 million has been drawn and is outstanding as of December 31, 2025, including $50.0 million of the Term E Loan drawn during the 2025 second quarter.

As of December 31, 2025, we had cash, cash equivalents and short-term investments totaling $264.7 million, an increase of $14.6 million, or 5.8%, from our cash position as of December 31, 2024.

Intellectual Property

The patent positions of biopharmaceutical companies like us are generally uncertain and involve complex legal, scientific and factual questions. In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued and its scope can be reinterpreted after issuance. Consequently, we do not know whether any of our products or drug candidates will be protectable or remain protected by enforceable patents. We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of our issued patents will provide sufficient proprietary protection from competitors. Any patents that we hold may be challenged, circumvented or invalidated by third parties. If third parties prepare and file patent applications in the U.S. that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings in the USPTO to determine priority of invention, which would result in substantial costs to us even if the eventual outcome is favorable to us.

The term of individual patents depends upon the legal term of the patents in countries in which they are obtained. In most countries, including the U.S., the patent term is generally 20 years from the earliest date of filing a non-provisional patent application in the applicable country. In the U.S., a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date.

In addition, in the U.S., the Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of a U.S. patent as partial compensation for the patent term lost during the FDA regulatory review process occurring while the patent is in force. A patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. Similar provisions are available in the European Union and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug.

We may rely, in some circumstances, on trade secrets to protect our technology. Although we take steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants, third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology. Thus, we may not be able to meaningfully protect our trade secrets. It is our policy to require our employees, consultants, outside scientific collaboration partners, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information concerning the business or financial affairs developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees, the agreements provide that all inventions conceived by the individual, and which are related to our current or planned business or research and development or made during the normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.

Tenapanor Patents

Our tenapanor patent portfolio includes ~~five~~seven issued U.S. patents, three issued patents in each of Israel and Mexico, two issued patents in each of the European Patent Organization, Japan, Korea, and Hong Kong and one issued patent in each of the following territories: Australia, Brazil, India and China. These issued patents cover the composition and certain methods of using tenapanor, are wholly owned by us, and are predicted, without extension or adjustment, to expire in December 2029. The term of U.S. patent no. 8,541,448, which claims the composition of matter of tenapanor, was extended under the Hatch-Waxman Act to August 1, 2033. The portfolio further includes patents covering the use of tenapanor for controlling serum phosphorus that are wholly owned by us and have been issued in the U.S., Europe, Japan, China, Australia, Gulf Co-op countries, Hong Kong, Israel, Korea, Macao, Mexico, New Zealand, Russia, South Africa and Taiwan and are pending in other countries. These patents are predicted, without extension or adjustment, to expire in April 2034.

Additional U.S. and international patent applications are pending covering additional methods of treatment with tenapanor, and composition of matter and methods of using compounds that we believe may be follow on compounds to tenapanor.

Manufacturing

To date, we have relied upon third-party CMOs to manufacture both the API and final drug product dosage forms of our commercial products, as well as our clinical trial material, and we expect that we will continue to rely upon CMOs for the manufacture of commercial product for IBSRELA, commercial product for XPHOZAH and clinical trial materials. Our license agreements with Knight and Fosun Pharma require us to supply final drug product dosage forms of tenapanor for their use in the development and commercialization of tenapanor in each of their respective territories. We are further obligated to supply API to Kyowa Kirin to support their development and commercialization of tenapanor in Japan. We expect that we will continue to use CMOs to satisfy our supply obligations to our collaboration partners.

Table of Co n t e n t s

following territories: Australia, Brazil, China and India. These issued patents cover the composition and certain methods of using tenapanor, are wholly owned by us, and are predicted, without extension or adjustment, to expire in December 2029. The term of U.S. patent no. 8,541,448, which claims the composition of matter of tenapanor, was extended under the Hatch-Waxman Act to August 1, 2033. The portfolio further includes patents covering the use of tenapanor for controlling serum phosphorus that are wholly owned by us and have been issued in the U.S., Europe, Japan, China, Australia, Gulf Co-op countries, Hong Kong, Israel, Korea, Macao, Mexico, New Zealand, Russia, South Africa and Taiwan and are pending in other countries. These patents are predicted, without extension or adjustment, to expire in April 2034. On January 22, 2026, we received an Issue Notification from the USPTO indicating the issuance of U.S. Patent No. 12,539,299. The patent relates to the formulation of tenapanor and covers the commercial formulations of IBSRELA and XPHOZAH and has an expiration date of November 26, 2042.

Manufacturing

To date, we have relied upon third-party CMOs to manufacture both the API and final drug product dosage forms of our commercial products, as well as our clinical trial material, and we expect that we will continue to rely upon CMOs for the manufacture of commercial product for IBSRELA, commercial product for XPHOZAH and clinical trial materials. Our license agreements with Knight and Fosun Pharma currently require us to supply final drug product dosage forms of tenapanor for their use in the development and commercialization of tenapanor in each of their respective territories. We are further obligated to supply API to Kyowa Kirin to support their development and commercialization of tenapanor in Japan. We expect that we will continue to use CMOs to satisfy our supply obligations to our collaboration partners.

Government Regulation

The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs. These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of our products and product candidates.

In the U.S., the FDA regulates drug products under the FFDCA and the FDA’s implementing regulations. If we fail to comply with applicable ~~U.S.~~ FDA or other requirements at any time during the drug development process, the approval process or after approval, we may become subject to administrative or judicial sanctions. These sanctions could include the ~~U.S.~~ FDA’s refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution. Any ~~U.S.~~ FDA enforcement action could have a material adverse effect on us. ~~U.S.~~ FDA approval is required before any new unapproved drug or dosage form, including a new use of a previously approved drug, can be marketed in the U.S.

The process required by the ~~U.S.~~ FDA before a drug may be marketed in the U.S. generally involves:

•completion of extensive preclinical laboratory tests, preclinical animal studies and formulation studies, some performed in accordance with the ~~U.S.~~ FDA’s current GLP regulations;

•submission to the ~~U.S.~~ FDA of an IND application which must become effective before human clinical trials in the U.S. may begin;

•approval by an independent IRB or ethics committee at each clinical trial site before each trial may be initiated;

•performance of adequate and well-controlled human clinical trials in accordance with GCP regulations to establish the safety and efficacy of the drug candidate for each proposed indication;

•submission to the ~~U.S.~~ FDA of an NDA for marketing approval of the new drug;

•~~satisfactory~~determination ~~completion~~by ofthe aFDA ~~U.S.~~within ~~FDA~~60 ~~inspection~~days of ~~the~~its ~~manufacturing~~receipt ~~facility~~of oran ~~facilities~~NDA atto ~~which~~accept ~~the~~and ~~drug~~file isthe ~~produced~~NDA tofor ~~assess compliance with cGMP regulations~~review;

•satisfactory completion of aan ~~potential~~FDA ~~review~~inspection byof anthe ~~U.S.~~manufacturing ~~FDA~~facility ~~advisory~~or ~~committee,~~facilities ifat ~~applicable;~~which ~~and~~the drug is produced to assess compliance with cGMP regulations;

•~~U.S.~~satisfactory ~~FDA~~completion ~~review~~of ~~and~~a ~~approval~~potential FDA audit of the ~~NDA~~non-clinical ~~prior~~and/or toclinical ~~any~~trial ~~commercial~~sites ~~marketing,~~that ~~sale~~generated orthe ~~commercial~~data ~~shipment~~in support of the ~~drug.~~NDA;

The preclinical and clinical testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for any product candidates that we may seek to advance will be granted on a timely basis, if at all. Nonclinical tests include laboratory evaluation of product chemistry, formulation, stability and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product. The results of preclinical tests, together with manufacturing information, analytical data and a proposed clinical trial protocol and other information, are submitted as part of an IND to the U.S. FDA. Additional preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the U.S. FDA, unless the U.S. FDA, within the 30-day period, raises concerns or questions relating to the IND and places the clinical trial on a clinical hold, including concerns that human research subjects will be exposed to unreasonable health risks. In such a case, the IND sponsor and the U.S. FDA must resolve any outstanding concerns before the clinical trial can begin. A separate submission to an existing IND must also be made for each successive clinical trial conducted during product development.

Clinical trials involve the administration of the investigational drug to human subjects under the supervision of qualified investigators. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be used. Each protocol must be submitted to the U.S. FDA as part of the IND.

An independent IRB or ethics committee for each medical center proposing to conduct a clinical trial must also review and approve a plan for any clinical trial before it can begin at that center and the IRB must monitor the clinical trial until it is completed. The U.S. FDA, the IRB or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive GCP requirements, including the requirements for informed consent.

Table of Co n t e n t s

~~All~~•satisfactory ~~clinical~~completion ~~research performed in the U.S. in support~~ of ~~an NDA must be submitted in advance by the U.S. FDA under the IND regulations and procedures described above. However,~~ a ~~sponsor~~potential who wishes to conduct a clinical trial outside the U.S. may, but need not, obtain U.S. FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the sponsor may submit data from the clinical trial to the U.S. FDA in support of an NDA so long as the clinical trial is conducted in compliance with GCP and if the U.S. FDA is able to validate the data from the study through an onsite inspection, if necessary. GCP includes review ~~and approval~~ by an ~~independent~~FDA ~~ethics~~advisory committee, such as an IRB, and obtaining and documenting the freely given informed consent of each subject before study initiation. If the applicant seeks approval of an NDA solely on the basis of foreign data, the U.S. FDA will only accept such data if ~~they are~~ applicable; ~~to the U.S. population~~ and U.S. medical practice, the studies have been performed by clinical investigators of recognized competence, and the data may be considered valid without the need for an on-site inspection by the U.S. FDA, or if the U.S. FDA considers such an inspection to be necessary, the U.S. FDA is able to validate the data through an on-site inspection or through other appropriate means.

•payment of applicable user fees and FDA review and approval of the NDA prior to any commercial marketing, sale or commercial shipment of the drug.

The preclinical and clinical testing and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for any product candidates that we may seek to advance, or any approvals for label expansions for existing marketed products that we may seek to obtain, will be granted on a timely basis, if at all. Nonclinical tests include laboratory evaluation of product chemistry, formulation, stability and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product. The results of preclinical tests, together with manufacturing information, analytical data and a proposed clinical trial protocol and other information, are submitted as part of an IND to the FDA. Additional preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day period, raises concerns or questions relating to the IND and places the clinical trial on a clinical hold, including concerns that human research subjects will be exposed to unreasonable health risks. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. A separate submission to an existing IND must also be made for each successive clinical trial conducted during product development.

An independent IRB or ethics committee for each medical center proposing to conduct a clinical trial must also review and approve a plan for any clinical trial before it can begin at that center and the IRB must monitor the clinical trial until it is completed. The FDA, the IRB or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive GCP requirements, including the requirements for informed consent.

All clinical research to be performed in the U.S. in support of an NDA must be reviewed in advance by the FDA under the IND regulations and procedures described above. However, a sponsor who wishes to conduct a clinical trial outside the U.S. may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the sponsor may still submit data from the clinical trial in support of an NDA as long as the clinical trial is conducted in compliance with GCP and if the FDA is able to validate the data from the study through an onsite inspection, if necessary. GCP includes, among other things, review and approval by an independent ethics committee, such as an IRB, and obtaining and documenting the freely given informed consent of each subject before study initiation. If the applicant seeks approval of an NDA solely on the basis of foreign data, the FDA will only accept such data if they are applicable to the U.S. population and U.S. medical practice, the studies have been performed by clinical investigators of recognized competence, and the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or through other appropriate means.

Clinical Trials

The clinical investigation of a new drug is typically conducted in three or four phases, which may overlap or be combined, and generally proceed as follows.

•Phase 1: Clinical trials are initially conducted in a limited population of subjects to test the drug candidate for safety, dose tolerance, absorption, metabolism, distribution and excretion in healthy humans or, on occasion, in patients with severe problems or life-threatening diseases to gain an early indication of its effectiveness.

•Phase 2: Clinical trials are generally conducted in a limited patient population to evaluate dosage tolerance and appropriate dosage, identify possible adverse effects and safety risks and evaluate preliminarily the efficacy of the drug for specific targeted indications in patients with the disease or condition under study.

•Phase 3: Clinical trials are typically conducted when Phase 2 clinical trials demonstrate that a dose range of the product candidate is effective and has an acceptable safety profile. Phase 3 clinical trials are commonly referred to as “pivotal” studies, which typically denotes a study which presents the data that the ~~U.S.~~ FDA or other relevant regulatory agency will use to determine whether or not to approve a drug. Phase 3 clinical trials are generally undertaken with large numbers of patients, such as groups of several hundred to several thousand, to further evaluate dosage, to provide ~~substantial evidence of clinical efficacy and to further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.~~

•Phase 4: In some cases, the U.S. FDA may condition approval of an NDA for a product candidate on the sponsor’s agreement to conduct additional clinical trials after NDA approval. In other cases, a sponsor may voluntarily conduct additional clinical trials post approval to gain more information about the drug. Such post approval trials are typically referred to as Phase 4 clinical trials.8

Table of Co n t e n t s

substantial evidence of clinical efficacy and to further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.

•Phase 4: In some cases, the FDA may condition approval of an NDA for a product candidate on the sponsor’s agreement to conduct additional clinical trials after NDA approval. In other cases, a sponsor may voluntarily conduct additional clinical trials post approval to gain more information about the drug. Such post approval trials are typically referred to as Phase 4 clinical trials.

Concurrent with clinical trials, companies usually complete additional nonclinical studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the drug in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

The ~~U.S.~~ FDA, the IRB or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether or not a trial may move forward at designated check points based on access to certain data from the study.

We may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

New Drug Applications

The results of preclinical studies and of the clinical trials, together with other detailed information, including extensive manufacturing information and information on the composition of the drug, are submitted to the ~~U.S.~~ FDA in the form of an NDA requesting approval to market the drug for one or more specified indications. The ~~U.S.~~ FDA reviews an NDA to determine, among other things, whether a drug is safe and effective for its intended use.

8Under the Prescription Drug User Fee Act, the FDA has a goal of responding to standard review NDAs for new molecular entities within ten months after the 60-day filing review period, or six months after the 60-day filing review period for priority review NDAs. For non-new molecular entities, the FDA has a goal of responding within ten months of receipt of standard review NDAs and six months of receipt for priority review NDAs. These timeframes are often extended by FDA requests for additional information or clarification. The FDA may refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.

~~Table~~After the FDA evaluates the NDA and conducts inspections of ~~Contents~~manufacturing facilities where the drug product and/or its API will be produced, if deemed necessary, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete, and the application is not ready for approval. A Complete Response Letter may require additional clinical data and/or an additional Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials, preclinical studies or manufacturing. Even if such additional information is submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. The FDA could also approve the NDA with a REMS if it determines that a REMS is necessary to ensure that the drug’s benefits outweigh its risks, which could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct one or more post-market studies or clinical trials. Such post-market testing may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. The FDA has the authority to prevent or limit further marketing of a drug based on the results of these post-market programs. Once the FDA approves an NDA, or any supplement thereto, the FDA may withdraw the approval if ongoing regulatory requirements are not met or if safety problems are identified after the drug reaches the market.

~~Under~~Drugs ~~the~~may ~~Prescription~~be ~~Drug~~marketed ~~User~~only ~~Fee~~for ~~Act,~~ the ~~U.S.~~ FDA-approved ~~has~~indications aand ~~goal~~in ofaccordance ~~responding~~with tothe ~~standard~~provisions ~~review~~of ~~NDAs for new molecular entities within ten months after~~ the ~~60-day~~approved ~~filing~~labeling. ~~review period~~Further, orif ~~six~~there ~~months~~are ~~after~~any ~~the~~modifications ~~60-day~~to ~~filing~~the ~~review~~drug, ~~period~~including ~~for~~changes ~~priority~~in ~~review~~indications, ~~NDAs.~~labeling, ~~For~~or ~~non-new~~manufacturing ~~molecular~~processes ~~entities~~or facilities, the ~~U.S.~~applicant ~~FDA~~may ~~has~~be arequired ~~goal~~to ofsubmit ~~responding within ten months of receipt of standard review NDAs~~ and ~~six~~obtain ~~months of receipt for priority review NDAs. These timeframes are often extended by U.S.~~ FDA ~~requests~~approval ~~for~~of ~~additional~~a ~~information~~new NDA or ~~clarification.~~NDA ~~The~~supplement, ~~U.S.~~which ~~FDA~~ may ~~refer~~require the ~~application~~applicant to andevelop ~~advisory~~additional ~~committee~~data ~~for~~or ~~review,~~conduct ~~evaluation~~additional ~~and~~preclinical ~~recommendation~~studies asand toclinical ~~whether the application should be approved~~trials. ~~The~~There ~~U.S.~~can ~~FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.~~

After the U.S. FDA evaluates the NDA and conducts inspections of manufacturing facilities where the drug product and/or its API will be produced, if deemed necessary, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete, and the application is not ready for approval. A Complete Response Letter may require additional clinical data and/or an additional Phase 3 clinical trial(s), and/or other significant, expensive and time-consuming requirements related to clinical trials, preclinical studies or manufacturing. Even if such additional information is submitted, the U.S. FDA may ultimately decide that the NDA does not satisfy the criteria for approval. The U.S. FDA could also approve the NDA with a REMS if it is determined that a REMS is necessary to ensure that the drug’s benefits outweigh its risks and a REMS to mitigate risks, which could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The U.S. FDA also may condition approval on, among other things, changes to proposed labeling, development of adequate controls and specifications, or a commitment to conduct one or more post-market studies or clinical trials. Such post-market testing may include Phase 4 clinical trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization. The U.S. FDA has the authority to prevent or limit further marketing of a drug based on the results of these post-market programs. Once the U.S. FDA approves an NDA, or supplement thereto, the U.S. FDA may withdraw the approval if ongoing regulatory requirements are not met or if safety problems are identified after the drug reaches the market.

Drugs may be marketed only for the U.S. FDA approved indications and in accordance with the provisions of the approved labeling. Further, if there are any modifications to the drug, including changes in indications, labeling, or manufacturing processes or facilities, the applicant may be required to submit and obtain U.S. FDA approval of a new NDA or NDA supplement, which may require the applicant to develop additional data or conduct additional preclinical studies and clinical trials.

The testing and approval processes require substantial time, effort and financial resources, and each may take several years to complete. The U.S. FDA may not grant approval on a timely basis, or at all. Even if we believe a clinical trial has demonstrated safety and efficacy of one of our drug candidates for the proposed indication, the results may not be satisfactory to the U.S. FDA. Nonclinical and clinical data may be interpreted by the U.S. FDA in different ways, which could delay, limit or prevent regulatory approval. We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals which could delay or preclude us from marketing drugs. The U.S. FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the drugs. After approval, certain changes to the approved drug, such as adding new indications, manufacturing changes, or additional labeling claims are subject to further U.S. FDA review and approval. Depending on the nature of the change proposed, an NDA supplement must be filed and approved before the change may be implemented.

Other Regulatory Requirements

Any drugs manufactured or distributed by us or our collaboration partners pursuant to U.S. FDA approvals would be subject to continuing regulation by the U.S. FDA, including recordkeeping requirements and reporting of adverse experiences associated with the drug. Drug manufacturers and their subcontractors are required to register their establishments with the U.S. FDA and certain state agencies and are subject to periodic announced and unannounced inspections by the U.S. FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning or untitled letters, suspension of manufacturing, seizure of product, injunctive action or possible civil penalties. We cannot be certain that we or our present or future third-party manufacturers or suppliers will be able to comply with the cGMP regulations and other ongoing U.S. FDA regulatory requirements. If we or our present or future third-party manufacturers or suppliers are not able to comply with these requirements, the U.S. FDA may, among other things, halt our clinical trials, require us to recall a drug from distribution or withdraw approval of the NDA for that drug.

Table of Co n t e n t s

~~The~~be ~~U.S.~~no ~~FDA~~assurances closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. A company can make only those claims relating to safety and efficacy that ~~are in~~ the ~~final~~FDA ~~label~~will orapprove ~~consistent~~any ~~with~~requested ~~the~~changes ~~final label. Failure to comply with these requirements can result~~ in, ~~among other things~~indications, ~~adverse~~labeling ~~publicity, warning~~ or ~~untitled~~manufacturing ~~letters,~~processes ~~corrective~~or ~~advertising and potential civil and criminal penalties~~facilities. Physicians may prescribe legally available drugs for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the U.S. FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The U.S. FDA does not regulate the behavior of physicians in their choice of treatments. The U.S. FDA does, however, impose stringent restrictions on manufacturers’ communications regarding off-label use.

The testing and approval processes require substantial time, effort and financial resources, and each may take several years to complete. The FDA may not grant approval on a timely basis, or at all. Even if we believe a clinical trial has demonstrated safety and efficacy of one of our drug candidates for the proposed indication, the results may not be satisfactory to the FDA. Nonclinical and clinical data may be interpreted by the FDA in different ways, which could delay, limit or prevent regulatory approval. We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals which could delay or preclude us from marketing drugs. The FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the drugs.

Ongoing Regulatory Requirements

Any drugs manufactured or distributed by us or our collaboration partners pursuant to FDA approvals would be subject to continuing regulation by the FDA, including recordkeeping requirements and reporting of adverse experiences associated with the drug. Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic announced and unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning or untitled letters, suspension of manufacturing, seizure of product, injunctive action or possible civil penalties. We cannot be certain that we or our present or future third-party manufacturers or suppliers will be able to comply with the cGMP regulations and other ongoing FDA regulatory requirements. If we or our present or future third-party manufacturers or suppliers are not able to comply with these requirements, the FDA may, among other things, halt our clinical trials, require us to recall a drug from distribution or withdraw approval of the NDA for that drug.

The FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. A company can make only those claims relating to safety and efficacy that are in the final label or consistent with the final label. Failure to comply with these requirements can result in, among other things, adverse publicity, warning or untitled letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available drugs for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, impose stringent restrictions on manufacturers’ communications regarding off-label use.

Hatch-Waxman Act

Under the Price Competition and Patent Term Restoration Act, or Hatch-Waxman Act, Section 505 of the FFDCA describes three types of marketing applications that may be submitted to the ~~U.S.~~ FDA to request marketing authorization for a new drug. A Section 505(b)(1) NDA is an application that contains full reports of investigations of safety and efficacy. A Section 505(b)(2) NDA is an application that contains full reports of investigations of safety and efficacy but where at least some of the information required for approval comes from investigations that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted. This regulatory pathway enables the applicant to rely, in part, on the ~~U.S.~~ FDA’s prior findings of safety and efficacy for an existing product, or on published literature, in support of its application. Section 505(j) establishes an abbreviated approval process for a generic version of approved drug products through the submission of an ANDA. An ANDA provides for marketing of a generic drug product that has the same active ingredients, dosage form, strength, route of administration, labeling, performance characteristics and intended use, among other things, to a previously approved product. ANDAs are termed “abbreviated” because they are generally not required to include nonclinical (animal) and clinical (human) data to establish safety and efficacy. Instead, generic applicants must scientifically demonstrate that their product is bioequivalent to, or performs in the same manner as, the innovator drug through in vitro, in vivo, or other testing. The generic version ~~must deliver the same amount of active ingredients into a subject’s bloodstream in the same amount of time as the innovator drug and~~ can often be substituted by pharmacists under prescriptions written for the reference listed drug. In seeking approval for a drug through an NDA, applicants are required to list with the ~~U.S.~~ FDA each patent ~~with~~that claims ~~that cover~~ the applicant’s drug or a method of using the drug. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the ~~U.S.~~ FDA’s publication Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. ~~Drugs~~Additional ~~listed~~patents inissued ~~the~~after ~~Orange~~NDA ~~Book~~approval ~~can,~~may ~~in turn,~~ be ~~cited~~added byto ~~potential~~the ~~competitors~~Orange ~~in support of approval of an ANDA or 505(b)(2) NDA~~Book.

Upon submission of an ANDA or a 505(b)(2) NDA, an applicant must certify to the U.S. FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the U.S. FDA; (2) such patent has expired; (3) the date on which such patent expires; or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. Generally, the ANDA or 505(b)(2) NDA cannot be approved until all listed patents have expired, except where the ANDA or 505(b)(2) NDA applicant challenges a listed patent through the last type of certification, also known as a Paragraph IV certification. If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the ANDA or 505(b)(2) NDA application will not be approved until all of the listed patents claiming the referenced product have expired.

If the ANDA or 505(b)(2) NDA applicant has provided a Paragraph IV certification to the U.S. FDA, the applicant must send notice of the Paragraph IV certification to the NDA holder and patent owners once the application has been accepted for filing by the U.S. FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. If the Paragraph IV certification is challenged by an NDA holder or the patent owner(s), the U.S. FDA may not approve that application until the earlier of 30 months from the receipt of the notice of the Paragraph IV certification, the expiration of the patent, when the infringement case concerning each such patent was favorably decided in the applicant’s favor or settled, or such shorter or longer period as may be ordered by a court. This prohibition is generally referred to as the 30-month stay. In instances where an ANDA or 505(b)(2) NDA applicant files a Paragraph IV certification, the NDA holder or patent owner(s) regularly take action to trigger the 30-month stay, recognizing that the related patent litigation may take many months or years to resolve. Thus, approval of an ANDA or 505(b)(2) NDA could be delayed for a significant period of time depending on the patent certification the applicant makes and the reference drug sponsor’s decision to initiate patent litigation.

Table of Co n t e n t s

~~The~~Once ~~Hatch-Waxman~~a ~~Act~~product ~~establishes~~and ~~periods~~any ofapplicable ~~regulatory~~patents ~~exclusivity~~are ~~for~~listed ~~certain~~in ~~approved~~the ~~drug~~Orange ~~products~~Book, ~~during~~it ~~which~~can ~~the~~be ~~U.S.~~referenced ~~FDA~~by ~~cannot~~potential ~~approve~~competitors ~~(or~~seeking inapproval ~~some~~of ~~cases~~a ~~accept)~~follow-on version of the drug in either an ANDA or 505(b)(2) ~~application~~ ~~that relies on the branded reference drug~~NDA. ~~For~~Upon ~~example,~~submission ~~the holder~~ of an ~~NDA,~~ANDA ~~including~~or a 505(b)(2) NDA, ~~may~~the ~~obtain~~applicant ~~five years~~must ofcertify ~~exclusivity~~to ~~upon~~the ~~approval~~FDA, ofwith arespect ~~new~~to ~~drug~~each ~~containing~~patent anlisted ~~NCE~~in ~~that~~the ~~has~~Orange ~~not~~Book ~~been~~for ~~previously~~the ~~approved~~reference bydrug, ~~the~~that ~~U.S.~~(1) no ~~FDA.~~patent Ainformation ~~drug~~has isbeen ansubmitted ~~NCE~~to if the ~~U.S.~~ FDA; ~~has~~(2) such ~~not~~patent ~~previously~~has ~~approved~~expired; ~~any~~(3) the ~~other~~date ~~new~~on ~~drug~~which ~~containing~~such ~~the~~patent ~~same~~expires; ~~active~~or ~~moiety,~~(4) such ~~which~~patent is ~~the~~invalid ~~molecule~~ or ~~ion~~will ~~responsible~~not ~~for~~be infringed upon by the ~~therapeutic~~manufacture, ~~activity~~use or sale of the drug ~~substance.~~product ~~During~~for which the ~~exclusivity~~application ~~period~~is submitted. Generally, the ~~U.S.~~ANDA ~~FDA~~or ~~may~~505(b)(2) NDA ~~not~~cannot ~~accept~~be ~~for~~approved ~~review~~until anall listed patents have expired, except where the ANDA or a 505(b)(2) NDA ~~submitted~~applicant bychallenges ~~another~~a ~~company~~listed ~~that~~patent ~~contains~~through the ~~previously~~last ~~approved~~type ~~active~~of ~~moiety~~certification, known as a Paragraph IV certification. ~~However~~If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, anthe ANDA or 505(b)(2) NDA ~~may~~application bewill ~~submitted~~not ~~after~~be ~~four years~~approved ifuntil itall ~~contains~~of athe ~~Paragraph~~applicable IVlisted ~~certification~~patents ofclaiming ~~patent~~the ~~invalidity~~referenced orproduct ~~non-infringement~~have expired.

~~The~~If ~~Hatch-Waxman~~the ~~Act~~ANDA ~~also~~or ~~provides~~505(b)(2) ~~three years~~NDA ofapplicant ~~marketing~~has ~~exclusivity~~provided a Paragraph IV certification to the ~~holder~~FDA, ofthe anapplicant ~~NDA~~must ~~(including~~send anotice ~~505(b)(2) NDA)~~of ~~for~~the aParagraph ~~particular~~IV ~~condition~~certification ofto ~~approval,~~the orNDA ~~change~~holder toand apatent ~~marketed~~owners ~~product,~~once ~~such~~the asapplication ahas ~~new~~been ~~formulation~~accepted for afiling ~~previously~~by ~~approved~~the ~~product,~~FDA. ifThe ~~one~~NDA orand ~~more~~patent ~~new~~holders ~~clinical~~may ~~studies~~then ~~(other~~initiate ~~than~~a ~~bioavailability~~patent orinfringement ~~bioequivalence~~lawsuit ~~studies)~~in ~~was~~response ~~essential~~ to the ~~approval~~notice of the ~~application~~Paragraph ~~and~~IV ~~was~~certification. ~~conducted/sponsored~~If bythe NDA holder or the ~~applicant.~~patent ~~This~~owner(s) ~~three-year~~bring ~~exclusivity~~such ~~period~~patent ~~protects~~infringement ~~against~~lawsuit ~~U.S.~~within ~~FDA~~45 ~~approval~~days of ~~ANDAs~~the ~~and~~ANDA or 505(b)(2) ~~NDAs~~ ~~for~~NDA applicant’s Paragraph IV certification notice, the ~~specific~~FDA ~~condition~~may not approve that application until 30 months from the receipt of the ~~new~~notice ~~drug’s~~of ~~approval.~~the AsParagraph IV certification or such shorter or longer period as may be ordered by a ~~general~~court, ~~matter~~or if applicable, the ~~three-year~~date ~~exclusivity~~the ~~does~~infringement ~~not~~case ~~prohibit~~concerning each such patent is favorably decided or settled in the Uapplicant’s favor.S This prohibition is generally referred to as the 30-month stay. ~~FDA~~In ~~from~~instances ~~approving~~where ~~ANDAs~~an ANDA or 505(b)(2) ~~NDAs~~ ~~for~~NDA ~~generic~~applicant ~~versions~~files ofa ~~the~~Paragraph ~~original~~IV certification, ~~unmodified~~the ~~drug~~NDA ~~product.~~holder ~~Five-year~~or ~~and~~patent ~~three-year~~owner(s) ~~exclusivity~~regularly ~~will~~take ~~not~~action ~~delay~~to trigger the ~~submission~~30-month orstay, ~~approval~~recognizing ofthat athe ~~full~~related ~~NDA;~~patent ~~however,~~litigation anmay ~~applicant~~take ~~submitting~~many amonths ~~full~~or ~~NDA~~years ~~would~~to beresolve. ~~required~~Thus, toapproval ~~conduct~~of an ANDA or ~~obtain~~505(b)(2) aNDA ~~right~~could ofbe ~~reference~~delayed tofor ~~all~~a significant period of time depending on the ~~preclinical~~patent ~~studies~~certification ~~and~~the ~~adequate~~applicant makes and ~~well-controlled~~the ~~clinical~~reference ~~trials~~drug ~~necessary~~sponsor’s decision to ~~demonstrate~~initiate ~~safety~~patent ~~and efficacy~~litigation.

The Hatch-Waxman Act establishes periods of regulatory exclusivity for certain approved drug products, during which the FDA cannot approve (or in some cases accept) an ANDA or 505(b)(2) NDA that relies on the reference drug. For example, the holder of an NDA, including a 505(b)(2) NDA, may obtain five years of exclusivity upon approval of a new drug containing an NCE that has not been previously approved by the FDA. A drug is an NCE if the FDA has not previously approved any other drug containing the same active moiety, which is the molecule or ion responsible for the therapeutic activity of the drug substance. During the exclusivity period, the FDA may not accept for review an ANDA or a 505(b)(2) NDA submitted by another company that contains the NCE active moiety. However, an ANDA or 505(b)(2) NDA may be submitted after four years if it contains a Paragraph IV certification of patent invalidity or non-infringement.

The Hatch-Waxman Act also provides three years of marketing exclusivity to the holder of an NDA (including a 505(b)(2) NDA) for a particular condition of approval, or change to a marketed product, such as a new formulation for a previously approved product, if one or more new clinical investigations (other than bioavailability or bioequivalence studies) was essential to the approval of the application and was conducted/sponsored by the applicant. This three-year exclusivity period protects against FDA approval of ANDAs and 505(b)(2) NDAs for the specific condition of the new drug’s approval. As a general matter, the three-year exclusivity does not prohibit the FDA from approving ANDAs or NDAs for generic versions of the original, unmodified drug product. Five-year and three-year exclusivity will not delay the submission or approval of a full 505(b)(1) NDA; however, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and efficacy.

Fraud and Abuse Laws

In the U.S. the research, manufacturing, distribution, sale and promotion of drug products and medical devices are ~~potentially~~ subject to regulation by various federal, state and local authorities in addition to the ~~U.S.~~ FDA, including ~~the~~ CMS and other divisions of the U.S. Department of Health and Human Services (e.g., the Office of Inspector General), the U.S. Department of Justice, state Attorneys General, and other state and local government agencies. These laws include, but are not limited to, the Anti-Kickback Statute, the federal False Claims Act, the federal Physician Payments Sunshine Act and other state and federal laws and regulations.

The Anti-Kickback Statute makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that is intended to induce the referral of business, including the purchase, order or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. The term remuneration has been interpreted broadly to include anything of value. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Additionally, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

The federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services. Although we would not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. In addition, our activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state, and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. If the government were to allege that we were, or convict us of, violating these false claims laws, we could be subject to a substantial fine and may suffer a decline in our stock price. In addition, private individuals have the ability to bring actions under the federal False Claims Act.

The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

Table of Co n t e n t s

harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Additionally, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

The federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services. Although we do not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. In addition, our activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state, and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. If the government were to allege that we were, or convict us of, violating these false claims laws, we could be subject to a substantial fine and may suffer a decline in our stock price. In addition, private individuals have the ability to bring actions under the federal False Claims Act.

The federal HIPAA created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute, or the specific intent to violate it, to have committed a violation.

In addition to the laws described above, the Physician Payments Sunshine Act requires certain drug manufacturers to report payments and other transfer of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anesthesiologist assistants and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Failure to submit required information may result in significant civil monetary penalties, and additional penalties for knowing failures, for all payments, transfers of value or ownership or investment interests that are not timely, accurately and completely reported in an annual submission. Manufacturers must submit reports by the 90th day of each subsequent calendar year.

Many states have also adopted laws similar to the federal laws discussed above. Some of these state prohibitions apply to the referral of patients for healthcare services reimbursed by any insurer, not just federal healthcare programs such as Medicare and Medicaid. There has also been a recent trend of increased regulation of payments made to physicians and other healthcare providers. Certain states mandate implementation of compliance programs, impose restrictions on drug manufacturers’ marketing practices and/or require the tracking and reporting of pricing and marketing information as well as gifts, compensation and other remuneration to physicians. Many of these laws contain ambiguities as to what is required to comply with such laws, which may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state and perhaps federal authorities.

Violations of any of such laws or any other governmental regulations that apply may result in penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, reporting obligations and integrity oversight, exclusion from participation in federal and state healthcare programs and imprisonment.

Third-Party Coverage and Reimbursement

Sales of pharmaceutical products depend in significant part on the availability of coverage and adequate reimbursement by third-party payors, such as state and federal governments, including Medicare and Medicaid, and commercial managed care providers. In the U.S., no uniform policy of coverage and reimbursement for drug products exists among third-party payors. Accordingly, decisions regarding the extent of coverage and amount of reimbursement to be provided for our product candidates are made on a payor by payor basis. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained. Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the U.S. FDA-approved drugs for a particular indication. A decision by a third-party payor not to cover our product candidates could reduce physician utilization of our products once approved and have a material adverse effect on our future sales, results of operations and financial condition. Moreover, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

There is increased uncertainty related to insurance coverage and reimbursement for certain drugs, like XPHOZAH, which is marketed to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy. In January 2011, CMS implemented a new PPS for dialysis treatment. Under the ESRD PPS, CMS generally makes a single bundled payment to the dialysis facility for each dialysis treatment that covers all items and services routinely required for dialysis treatments furnished to Medicare beneficiaries in Medicare-certified ESRD facilities or at their home, including the cost of certain routine drugs. Beginning January 1, 2025, XPHOZAH, along with other oral ESRD related drugs without injectable or intravenous equivalents, are now included in the ESRD PPS, thereby eliminating coverage for XPHOZAH and these other ESRD related drugs under Medicare Part D as of such date. While it is too early to project the full impact that bundling may have on XPHOZAH and our business, we may be unable to sell XPHOZAH to dialysis providers on a profitable basis.

Table of Co n t e n t s

Accordingly, decisions regarding the extent of coverage and amount of reimbursement to be provided for our product candidates are made on a payor by payor basis. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained. Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drugs for a particular indication. A decision by a third-party payor not to cover our product candidates could reduce physician utilization of our products once approved and have a material adverse effect on our future sales, results of operations and financial condition. Moreover, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

Additionally, under the ESRD PPS, CMS generally makes a single bundled payment to the dialysis facility for each dialysis treatment that is intended to cover all items and services CMS has determined are routinely required for dialysis treatments furnished to Medicare beneficiaries in Medicare-certified ESRD facilities or at their home, including the cost of certain drugs required for treatment of ESRD patients on dialysis. On January 1, 2025, XPHOZAH, along with other oral drugs for ESRD patients on dialysis without injectable or intravenous equivalents, became part of the ESRD PPS and coverage for XPHOZAH and these other oral drugs under Medicare Part D was eliminated. We made the decision to preserve access to XPHOZAH for all appropriate patients. Although more patients had access to XPHOZAH and we increased the number of patients on treatment compared to 2024, the change in Medicare reimbursement coverage had a negative and material impact on our XPHOZAH revenue in 2025. Our strategy for XPHOZAH remains a targeted promotional focus on nephrology healthcare providers to preserve access for patients, regardless of insurance coverage, determined to be appropriate candidates for XPHOZAH by their healthcare provider.

Healthcare Reform

In ~~March 2010~~the U.S. and some foreign jurisdictions, ~~Congress~~there ~~passed~~have been and continue to be ongoing efforts to implement legislative and regulatory changes regarding the ~~Patient~~healthcare ~~Protection~~system at the federal and ~~ACA~~state level, aincluding ~~healthcare~~with ~~reform~~respect ~~measure~~to the containment of healthcare costs. The ~~ACA~~significant ~~was~~interest ~~signed~~by ~~into~~federal ~~law~~and state legislatures, as well as by foreign governments, in the adoption of drug price controls and ~~substantially~~other ~~changed~~cost-containment measures, in addition to adoption of more restrictive policies in jurisdictions with existing controls and measures, could place additional downward pressure on the ~~way~~prices ~~healthcare~~we isor ~~financed~~our bycollaborators ~~both~~may ~~governmental~~receive for our products and ~~private~~future ~~insurers~~product candidates, if approved, and ~~significantly~~may ~~impacted~~adversely ~~the~~affect ~~pharmaceutical~~our ~~industry~~ability to achieve or maintain profitability.

~~The~~For example, the ACA, ~~contained~~enacted in 2010, substantially changed the way healthcare is financed by both governmental and private insurers and contains a number of provisions that may affect our business, including those governing enrollment in federal healthcare programs, reimbursement changes, rules regarding prescription drug benefits under the health insurance exchanges, changes to the Medicaid Drug Rebate Program, expansion of the Public Health Service Act’s 340B drug pricing program, or 340B program, and fraud and abuse measures,. ~~which~~These changes have impacted existing government healthcare programs and have resulted in the development of new programs, including Medicare payment for performance initiatives and improvements to the physician quality reporting system and feedback program. There have been ongoing changes to the implementation of the ACA since its adoption. For example, the availability of enhanced premium tax credits and other subsidies under the ACA expired as of December 31, 2025, and absent legislative action to reinstate or replace them, many individuals may experience higher out-of-pocket premium costs. These changes could result in an increase in uninsured or underinsured patients, which could negatively affect patients’ ability or willingness to start or continue treatment with our products or future product candidates, if successfully developed and approved, or may otherwise increase prescription abandonment rates or place greater pressure on drug pricing generally.

~~Additionally,~~Other legislative changes have been proposed and adopted in the U.S. since the ACA: was enacted. These laws, among other things, included aggregate reductions of Medicare payments to providers that will remain in effect through 2032, unless additional Congressional action is taken, additional specific reductions in Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. The American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s AMP.

~~•increased~~There ~~the~~has ~~minimum~~also ~~level~~been ofheightened ~~Medicaid~~governmental ~~rebates~~scrutiny ~~payable~~over bythe manner in which drug manufacturers ofset ~~brand-name~~prices ~~drugs~~for ~~from~~their ~~15.1%~~marketed products, which has resulted in several Congressional inquiries and proposed bills designed to, 23among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.1% In 2022, the IRA was signed into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ~~AMP;~~ACA in 2010. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with

•required collection of rebates for drugs paid by Medicaid managed care organizations;

•expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

•expanded access to commercial health insurance coverage through new state-based health insurance marketplaces, or exchanges;

•required manufacturers to participate in a coverage gap discount program (which was replaced by a new discount program in 2025, as discussed below), under which they were required to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and

•imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell “branded prescription drugs” to specified federal government programs.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Thus, the ACA will remain in effect in its current form.

In addition, other legislative changes have been proposed and adopted in the U.S. since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions to Medicare payments to providers, which went into effect on April 1, 2013, and, due to subsequent legislative amendments, will remain in effect through 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken. In January 2013, the American Taxpayer Relief Act, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. More recently, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminated the statutory Medicaid drug rebate cap beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s AMP.

Recently, there has also been heightened governmental scrutiny over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed bills designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. Most recently, on August 16, 2022, the IRA was signed into law. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023) and replaces the Part D coverage gap discount program with a new discounting program (which began in 2025). Under the IRA, small molecule drugs and biologics first become eligible for price negotiation seven and eleven years, respectively, after FDA approval. The IRA permits the Secretary of the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has issued and will continue to issue guidance implementing the IRA. CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and the list of the subsequent 15 drugs that will be subject to negotiation, although the Medicare drug price negotiation program is currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant. Additionally, individual states have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient

Table of Co n t e n t s

~~reimbursement~~prices ~~constraints,~~that ~~discounts,~~can ~~restrictions~~be onnegotiated ~~certain~~subject ~~product~~to ~~access,~~a cap; imposes rebates under Medicare Part B and Medicare Part D to ~~encourage~~penalize ~~importation~~price ~~from~~increases ~~other~~that ~~countries~~outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and ~~bulk~~replaces ~~purchasing~~the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025). ~~Some~~CMS ~~states~~has ~~have~~published ~~enacted~~the ~~legislation~~negotiated ~~creating~~prices ~~so-called~~for ~~prescription~~the ~~drug~~initial ~~affordability~~ten ~~boards~~drugs, which ~~ultimately~~went ~~may~~into ~~attempt~~effect toin ~~impose~~January ~~price~~2026, ~~limits~~and onthe ~~certain~~subsequent 15 drugs, which will first be effective in 2027. The IRA permits the Secretary of HHS to implement many of these ~~states.~~provisions ~~These~~through ~~new~~guidance, ~~laws~~as ~~and~~opposed to regulation, for the ~~regulations~~initial years. HHS has and ~~policies~~will ~~implementing~~continue ~~them,~~to asissue ~~well~~and update guidance as ~~other~~these ~~healthcare~~programs ~~reform~~are ~~measures~~implemented, ~~that~~although ~~may~~the beMedicare ~~adopted~~drug inprice ~~the~~negotiation ~~future,~~program ~~may~~is ~~have~~currently asubject ~~material~~to ~~adverse~~legal ~~effect~~challenges. onWhile ~~our~~the ~~industry~~impact ~~generally~~of ~~and~~the IRA on ~~our~~the ~~ability~~pharmaceutical toindustry ~~successfully~~cannot ~~develop~~yet ~~and~~be ~~commercialize~~fully ~~our~~determined, ~~products~~it is likely to be significant.

The One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program, and imposes requirements for recipients to work and/or participate in qualifying activities in order to receive Medicaid benefits. Such reductions and requirements are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect sales of our products.

The current administration is pursuing a two-fold strategy to reduce drug costs in the U.S. While it is unclear whether and how these proposals will be implemented, the current administration’s policies are likely to have a negative impact on the pharmaceutical industry and on our ability to receive adequate revenues for our products. On the one hand, President Trump has threatened to impose significant tariffs on pharmaceutical manufacturers that do not adopt pricing policies such as most favored nation pricing, which would tie the price for drugs in the U.S. to the lowest price in a group of other countries. In response, multiple manufacturers have entered into confidential pricing agreements with the federal government. On the other hand, the current administration is pursuing traditional regulatory pathways to impose drug pricing policies and published two proposed regulations in December 2025, referred to as GLOBE and GUARD. If finalized, these regulations would implement mandatory payment models under which manufacturers of eligible drugs would be required to pay rebates to the federal government on a portion of the units of their drugs that are reimbursed by Medicare, with the rebate amount based on most favored nation pricing. Imposing a rebate in the U.S. that is based on drug prices outside the U.S. would mark a drastic and unprecedented shift in the U.S. pharmaceutical market, and while the impact of the GLOBE and GUARD proposed regulations, if finalized, cannot yet be determined, it is likely to be significant. Even regulatory proposals or executive actions that are ultimately deemed unlawful could negatively impact the U.S. pharmaceutical sector and our business.

Additionally, individual states have become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and to encourage importation from other countries and bulk purchasing. Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states, and at least one state board is imposing an upper payment limit. States are also seeking to implement general, across the board price caps for pharmaceuticals, or are seeking to regulate drug distribution.

These new laws and the regulations and policies implementing them, as well as other healthcare reform measures that may be adopted in the future, may have a material adverse effect on our industry generally and on our ability to successfully develop and commercialize our products.

Government Price Reporting

Medicaid is a joint federal and state program for low-income and disabled beneficiaries. Medicare is a federal program covering individuals age 65 and over as well as those with certain disabilities. As a condition of having federal funds being made available for our covered outpatient drugs under Medicaid, we have enrolled in the MDRP, which requires us to pay a rebate to state Medicaid programs for each unit of our covered outpatient drugs dispensed to a Medicaid beneficiary and paid for by a state Medicaid program. Medicaid drug rebates are based on pricing data that we must report on a monthly and quarterly basis to the U.S. CMS, the federal agency that administers the MDRP and Medicare programs. For the MDRP, these data include the AMP and the best price for each drug. If we become aware that our MDRP price reporting submission for a prior period was incorrect or has changed as a result of recalculation of the pricing data, we must resubmit the corrected data for up to three years after those data originally were due. Manufacturers who fail to provide information timely or are found to have knowingly submitted false information to the government may be subject to civil monetary penalties and other sanctions, including termination from the MDRP.

Federal law requires that a manufacturer that participates in the MDRP also participate in the 340B program in order for federal funds to be available for the manufacturer’s covered outpatient drugs under Medicaid and Medicare Part B. We participate in the 340B program, which is administered by ~~the~~ HRSA, and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered outpatient drugs used in an outpatient setting. These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients. The 340B ceiling price is calculated using a statutory formula, which is based on the AMP and rebate amount for the covered outpatient drug as calculated under the MDRP. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. We must report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes them to 340B covered entities. HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B-eligible drugs. HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.

Table of Co n t e n t s

calculated using a statutory formula, which is based on the AMP and rebate amount for the covered outpatient drug as calculated under the MDRP. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. We must report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes them to 340B covered entities. HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B-eligible drugs. HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.

In order to be eligible to have drug products paid for with federal funds under Medicaid and purchased by certain federal agencies and grantees, manufacturers must also participate in the U.S. VA FSS pricing program. Under the VA/FSS program, manufacturers must report the Non-FAMP for their covered drugs to the VA and charge certain federal agencies no more than the Federal Ceiling Price, which is calculated based on Non-FAMP using a statutory formula. These four agencies are the VA, the U.S. Department of Defense, the U.S. Coast Guard and the U.S. Public Health Service (including the Indian Health Service). Manufacturers must also pay rebates on products purchased by military personnel and dependents through the TRICARE retail pharmacy program. Manufacturers who fail to provide timely information or are found to have knowingly submitted false information may be subject to civil monetary penalties.

Individual states continue to consider and have enacted legislation to limit the growth of healthcare costs, including the cost of prescription drugs and combination products. A number of states have either implemented or are considering implementation of drug price transparency legislation. Requirements under such laws include advance notice of planned price increases, reporting price increase amounts and factors considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies, and new product notice and reporting. Such legislation could limit the price or payment for certain drugs, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers who fail to comply with drug price transparency requirements, including the untimely, inaccurate or incomplete reporting of drug pricing information.

Data Privacy and Security Laws

Numerous state, federal and foreign laws, including consumer protection laws and regulations, govern the collection, dissemination, use, access to, confidentiality and security of personal information, including health-related information. In the U.S., numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. Further, certain foreign laws govern the privacy and security of personal data, including health-related data. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Table of Contents

personal data, including health-related data. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Other Regulations

We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future.

Human Capital

The future success of our company depends on our ability to attract, retain and further develop top talent. ~~Throughout~~As we continually expand our ~~transition~~organization to asupport ~~commercial~~our ~~organization~~current and ~~expansion~~future ofgrowth ~~our workforce~~opportunities, we have remained steadfastly committed to our ~~core~~ values, including our goal to develop and maintain ana ~~inclusive~~professional, ~~diverse~~respectful and ~~safe~~collaborative workplace with opportunities for our employees to grow and develop in their careers, supported by strong compensation and benefits.

At December 31, ~~2024~~2025, we had ~~395~~489 full-time employees, 7793 of whom were engaged directly in research, development and manufacturing, ~~252~~305 in sales and marketing and 6691 in general and administrative activities. During ~~2024~~2025, our employee base increased by ~~approximately 128~~94, or 48approximately 24%.

~~Inclusion~~Workforce Culture and ~~Diversity~~Composition

Our culture is supported by an unwavering commitment to ~~inclusion~~maintaining a professional, respectful and ~~diversity~~collaborative work environment that supports engagement and performance. As of December 31, ~~2024~~2025, approximately 6163% of our workforce was female; 3338% of our executive leadership team was female and 5554% of our employees in managerial roles were female. As of December 31, 2024, minorities represented 31% of our workforce, and 37% of our employees in managerial roles were minorities. We strive to foster a culture where mutual respect, inclusive behavior and dignity are core to our individual expectations.

We believe that our success will be significantly impacted by our ability to create and maintain a safe inclusive environment where everyone is empowered to do their best work regardless of race, color, national origin, religion, sex, sexual orientation, gender identity and expression, age or disability.

Core Values

Fostering and maintaining a strong, healthy culture is a key strategic focus. Our core values reflect who we are and the way our employees interact with one another, our partners and our stockholders. We are dedicated to our core values, recognizing that this dedication will foster an environment where we will be able to realize our vision of advancing patient care. We are Passionate, aware that with integrity and determination, we make a difference for patients. We are Fearless, aware that by challenging convention, we truly innovate. We are Dedicated, aware that working tirelessly together, we are greater than the sum of our parts. We are Inclusive, aware that with respect, grace and humor, we are family. We encourage our employees to live out our core values and believe they help our culture stay strong and unique.

Health, Safety and Wellness

The health, safety and wellness of our employees is a priority in which we have always invested, and will continue to do so. We continue to offer hybrid and remote working opportunities for our team members employed in areas within the organization where such flexible work options are possible. We will continue to adopt and align our policies to focus on the health, safety and wellness of our employees, and the needs of our business.

Compensation and Benefits

We recognize that we operate within an industry where there is significant competition for top talent, and we endeavor to provide not only a strong healthy culture, but also important compensation and benefits programs to help meet the needs of our employees. In addition to base compensation, these programs include annual bonuses, stock awards, an Employee Stock Purchase Plan, 401(k) with company match contribution, healthcare and insurance benefits, health savings (funded by the Company) and flexible spending accounts, family leave, family care resources, and flexible work schedules, among many others.

Table of Co n t e n t s

December 31, 2025, employees who self-identified as members of underrepresented groups represented 35% of our workforce and 37% of our employees in managerial roles. We strive to foster a culture where mutual respect, accountability, integrity and dignity are core to our individual expectations.

We believe that fostering an environment in which employees feel respected and supported enhances productivity, innovation and long-term organizational success.

Core Values

Fostering and maintaining a strong, healthy culture is a key strategic focus. Our core values reflect who we are and the way our employees interact with one another, our partners and our stockholders. We are committed to our core values, recognizing that they will foster an environment where we will be able to realize our vision of advancing patient care. We are Passionate, aware that with integrity and determination, we make a difference for patients. We are Fearless, aware that by challenging convention, we truly innovate. We are Dedicated, aware that working tirelessly together, we are greater than the sum of our parts. We are Inclusive, aware that with respect, grace and humor, we are family. We encourage our employees to live out our core values and believe they help our culture stay strong and unique.

Health, Safety and Well-being

The health, safety and well-being of our employees are priorities in which we have always invested and will continue to do so. We offer hybrid and remote working opportunities for our team members employed in areas within the organization where such flexible work options are possible. We will continue to adopt and align our policies to focus on the health, safety and wellness of our employees, and the needs of our business.

Compensation and Benefits

We recognize that we operate within an industry where there is significant competition for top talent, and we endeavor to provide not only a strong healthy culture, but also important compensation and benefits programs to help meet the needs of our employees. In addition to base compensation, these programs include annual bonuses, quarterly incentives for our field based teams, stock awards, an Employee Stock Purchase Plan, 401(k) with company match contribution, healthcare and insurance benefits, health savings (funded by the Company) and flexible spending accounts, family leave, family care resources, and flexible work schedules, among many others.

Ensuring fair and equitable pay is integral to our commitment to our employees. Our executive team and board of directors strongly support this commitment. We conduct pay equity reviews annually to help us understand whether our compensation structure is appropriate and to identify what improvements can be made.

Corporate Information

We were founded in October 2007 as a Delaware corporation under the name Nteryx. We changed our name to Ardelyx, Inc. in June 2008. We operate in one business segment, which is the development and commercialization of biopharmaceutical products. Our principal executive offices are located at 400 Fifth Avenue, Suite 210, Waltham, Massachusetts 02415, and our telephone number is (510) 745-1700. Our website address is www.ardelyx.com.

We file electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or 15(d) of the ~~Securities~~ Exchange Act. ofWe ~~1934,~~make ascopies ~~amended.~~of Wethese ~~make~~reports available on our website, at www.ardelyx.com, free of charge, ~~copies of these reports,~~ as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that website is www.sec.gov.

Table of Co n t e n t s

ITEM 1A. RISK FACTORS

Our business involves significant risks, some of which are described below. You should carefully consider these risks, as well as other information in this Annual Report on Form 10-K, including our financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations, cash flows, the trading price of our common stock and our growth prospects. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

Risks Related to our Financial Condition and Capital Requirements

We have incurred losses in each year since our inception, and if we ~~expect~~are unable to continue to ~~incur~~increase ~~operating~~revenue ~~losses~~and/or, independing ~~the~~upon our pursuit of future asbusiness opportunities, we ~~incur~~may ~~additional~~not ~~expenses~~achieve ~~related~~expected cash flow positivity, and even if we do, we may not be able to ~~our~~sustain ~~ongoing~~cash ~~operations~~flow ~~and~~positivity ~~our~~quarter ~~pursuit~~over ofquarter ~~future~~and ~~business~~year ~~opportunities~~over year.

In March 2022, we commenced the commercialization of our first product, IBSRELA® (tenapanor) for the treatment of IBS-C in adult patients. In November 2023, we commenced the commercialization of XPHOZAH® (tenapanor) for the reduction of serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

We have incurred losses in each year since our inception in October 2007~~, and we do not know whether or when we will become profitable~~. We continue to incur ~~significant~~ commercialization, development and additional expenses related to our ongoing operations and pursuit of future business opportunities. As of December 31, ~~2024~~2025, we had an accumulated deficit of $~~885~~946.39 million. Our prior losses, combined with any future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

WeIf ~~expect~~we are unable to continue to ~~incur~~increase ~~operating~~revenue ~~losses~~ for ~~the~~IBSRELA ~~foreseeable~~and ~~future~~XPHOZAH, asand/or if we ~~incur~~elect ~~expenses~~to ~~related~~pursue future business opportunities to strengthen our ~~ongoing~~pipeline, ~~operations~~we may not achieve expected cash flow positivity, and ~~our~~even ~~pursuit~~if ofwe ~~future~~do, ~~business~~we ~~opportunities.~~may not be able to sustain cash flow positivity quarter over quarter and year over year.

~~There~~Our ~~are~~ability noto ~~assurances~~achieve ~~that~~and ~~our~~sustain ~~efforts~~cash toflow ~~meet~~positivity ~~our~~quarter ~~operating~~over ~~cash~~quarter ~~flow~~and ~~requirements~~year ~~will~~over beyear ~~successful.~~depends Ifheavily on our ~~current~~ability ~~cash,~~to ~~cash~~successfully ~~equivalents~~commercialize IBSRELA and ~~short-term~~XPHOZAH ~~investments~~and ason ~~well~~the asdecisions ~~our~~we ~~plans~~may make to ~~meet~~expand our ~~operating~~pipeline through internal investment and/or acquiring external assets. In addition, our cash flow ~~requirements~~positivity ~~are~~may ~~not~~be ~~sufficient~~impacted toby ~~fund~~the ~~necessary~~costs ~~expenditures~~of ~~and~~our ~~meet~~ongoing ~~our~~development ~~obligations~~efforts, including our ~~liquidity,~~Phase ~~financial~~3 ~~condition,~~clinical ~~and~~trial ~~business~~evaluating ~~prospects~~tenapanor ~~will~~in beCIC ~~materially~~and ~~affected.~~our RDX10531 development program.

Our ~~prior~~ability ~~losses,~~to ~~combined~~successfully ~~with~~commercialize ~~any~~IBSRELA ~~future~~and ~~losses,~~XPHOZAH ~~have had~~ and ~~will~~ continue to ~~have~~grow anrevenue ~~adverse~~received ~~effect~~for onboth ~~our~~products ~~stockholders’~~depends ~~equity~~on ~~and~~many ~~working capital. Further~~factors, ~~the~~including ~~net~~but ~~losses we incur may fluctuate significantly from quarter-to-quarter and year-to-year, such that a period-to-period comparison of our results of operations may~~ not belimited ~~a good indication of our future performance.~~ to:

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

Table of Contents

equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. We have experienced ownership changes in the past and may experience additional ownership changes in the future, as a result of subsequent changes in our stock ownership, some of which are outside our control. Accordingly, we may not be able to utilize a material portion of our NOL carryforwards, even if we achieve profitability.

We will require additional financing for the foreseeable future as we invest in the growth of IBSRELA and XPHOZAH in the U.S. and building a pipeline. The inability to access necessary capital when needed on acceptable terms, or at all, could force us to reduce our efforts to commercialize IBSRELA and/or XPHOZAH, or to delay or limit our pursuit of other future business opportunities.

We believe that we will continue to expend substantial resources for the foreseeable future, including costs associated with our efforts to commercialize IBSRELA and XPHOZAH; conducting pediatric clinical trials for IBSRELA; manufacturing for IBSRELA and XPHOZAH; investments to build a pipeline; and research and development related to potential new product candidates. The inability to access necessary capital when needed on acceptable terms, or at all, could force us to reduce our efforts to commercialize IBSRELA and/or XPHOZAH or otherwise delay or limit our pursuit of future business opportunities. Our future funding requirements will depend on many factors, including, but not limited to:

•the extent to which we are able to generate product revenue from sales of IBSRELA and XPHOZAH;

•the extent to which access to XPHOZAH is impacted by the elimination of Medicare Part D coverage for XPHOZAH on January 1, 2025, and the extent to which this change will interfere with the shared decision-making between healthcare professionals and their patients, regardless of insurance coverage;

•the extent to which the elimination of separate payment for XPHOZAH for Medicare beneficiaries under Medicare Part D will influence the payment decisions of other payors and the extent to which payment for XPHOZAH will continue to be made as a pharmacy benefit for non-Medicare patients;

•the availability of adequate third-party reimbursement for IBSRELA;

•the manufacturing, selling and marketing costs associated with IBSRELA and XPHOZAH;

•our ability to maintain our existing collaboration partnerships and to establish additional collaboration partnerships, in-license/out-license, joint ventures or other similar arrangements and the financial terms of such agreements;

•the timing, receipt and amount of any milestones that may be received from our collaboration partners in connection with tenapanor, if any;

•the timing, receipt, and amount of royalties we may receive as a result of sales of tenapanor by our collaboration partners in China, and Canada, if any;

•the extent to which IBSRELA and XPHOZAH are commercialized in other ex-U.S. territories;

•the cash requirements necessary to expand our business;

•the cash requirements for the discovery and/or development of other potential product candidates;

•the time and cost necessary to respond to technological and market developments;

•the costs of filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights, including litigation costs and the outcome of such litigation, and costs of defending any claims of infringement brought by others in connection with the development, manufacture or commercialization of tenapanor or any of our product candidates; and

•the payment of interest and principal related to our loan and security agreement entered into with SLR, as amended to date.

Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to limit or reduce our commercialization of IBSRELA or XPOHZAH, delay or limit additional clinical trials for tenapanor, or delay or limit our pursuit of other future business opportunities.

Table of Contents

We have generated limited revenue from product sales and may never be profitable for a full fiscal year.

We have generated limited revenue from product sales and have incurred significant net losses in each year since inception. We began selling IBSRELA in the U.S. in March 2022 and we began selling XPHOZAH in the U.S. in November 2023. We have no other products approved for sale.

There can be no assurances that we will generate sufficient product revenue from sales of IBSRELA and XPHOZAH to cover our expenses. Our ability to generate product revenue from sales or pursuant to milestone or royalty payments depends heavily on many factors, including but not limited to:

•our ability to successfully commercialize ISBRELA and XPHOZAH and to increase market share for both products;

•maintaining sufficient market acceptance of IBSRELA as a viable treatment option for IBS-C;

•obtaining market acceptance of XPHOZAH;

•the extent to which access to XPHOZAH is impacted by the elimination of Medicare Part D coverage for XPHOZAH, which occurred on January 1, 2025, and the extent to which this change will interfere with the shared decision-making between healthcare professionals and their patients, regardless of insurance coverage;

•our ability to obtain an adequate level of coverage and reimbursement for IBSRELA by third-party payors;

•the extent to which the actions of the current administration may result in downward pressure on the price that we receive for IBSRELA and XPHOZAH;

•establishing and maintaining supply and manufacturing relationships with third parties that can provide an adequate (in amount and quality) supply of product to support the market demand for IBSRELA and XPHOZAH;

•addressing any competing technological and market developments, including competing therapies that currently exist or that could be successfully developed and approved;

Table of Co n t e n t s

•maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how, and our ability to develop, manufacture and commercialize our product candidates and products without infringing intellectual property rights of others; and

•attracting, hiring, and retaining qualified personnel.

With respect to our commercialization of IBSRELA and XPHOZAH, our revenue, and therefore, our ability to achieve and sustain cash flow positivity will be dependent, in part, upon the size of the markets in the U.S., the label for which approval was granted, accepted price for the product, and the ability to secure and maintain adequate reimbursement. ~~Beginning~~On January 1, 2025, XPHOZAH, along with other oral drugs for ESRD ~~related~~patients ~~drugs~~on dialysis without injectable or intravenous equivalents, ~~are~~became ~~now~~part ~~included~~of in the ESRD PPS, ~~thereby~~and ~~eliminating~~ coverage for XPHOZAH and these other ~~ESRD~~oral ~~related~~ drugs under Medicare Part D aswas ~~of such date~~eliminated. The inclusion of XPHOZAH in the ESRD PPS creates additional uncertainty as to ~~our~~the ~~ability~~commercial toopportunity ~~generate~~for ~~revenue from sales of~~ XPHOZAH. See “—XPHOZAH isbecame ~~now~~part ~~included~~of in the ESRD PPS, ~~effective~~on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,; ~~and~~this asresulted in a ~~result~~negative ~~the~~and material impact on our XPHOZAH revenue ~~that~~in we2025; ~~may~~and ~~generate~~the oncontinued ~~sales~~lack of Medicare Part D coverage for XPHOZAH will beresult ~~negatively~~in ~~and~~a materially ~~impacted~~lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” below.

~~Additionally,~~If ifour ~~the~~current ~~number~~cash, ofcash ~~adult~~equivalents ~~patients for IBSRELA~~ and~~/or~~ ~~XPHOZAH~~short-term isinvestments ~~not~~ as ~~significant~~well as weour ~~estimate,~~plans ~~coverage~~to ~~and~~meet ~~reimbursement~~our ~~for~~operating ~~either~~cash ~~IBSRELA~~flow orrequirements ~~XPHOZAH~~ are not ~~available~~sufficient ~~in the manner and~~ to ~~the~~fund ~~extent~~investments we ~~expect,~~may orelect ~~the~~to ~~reasonably~~make ~~accepted~~in ~~population~~building ~~for~~our ~~treatment is narrowed by competition~~pipeline, ~~physician choice or treatment guidelines,~~ we ~~may~~will not ~~generate~~be ~~significant~~able ~~revenue~~achieve ~~from sales of IBSRELA~~ or, ~~XPHOZAH. Even~~ if ~~we achieve profitability on a quarterly basis in the future~~achieved, ~~we may not be able~~ to sustain ~~profitability~~cash ~~for~~flow apositivity, ~~full fiscal year. Our failure to generate adequate revenue from product sales would likely depress our market value~~ and ~~could impair~~ our ~~ability~~liquidity, tofinancial ~~raise capital~~condition, ~~expand~~and ~~our~~ business, ~~discover~~prospects ormay ~~develop~~be ~~other~~materially ~~product candidates or continue our operations~~affected. ~~A decline in the value of our common stock could cause our stockholders to lose all or part of their investment.~~

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

We have substantial net operating loss and tax credit carryforwards for Federal and California income tax purposes. Such net operating losses and tax credits carryforwards may be reduced as a result of certain intercompany restructuring transactions. In addition, the future utilization of such net operating loss and tax credit carryforwards and credits may be subject to limitations, pursuant to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended. In general, if a corporation undergoes an “ownership change,” generally defined as a cumulative change of more than 50 percentage points (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited. We have experienced ownership changes in the past and may experience additional ownership changes in the future, as a result of subsequent changes in our stock ownership, some of which are outside our control. Accordingly, we may not be able to utilize a material portion of our NOL carryforwards, even if we achieve profitability.

We may require additional financing for the foreseeable future as we invest in the growth of IBSRELA and XPHOZAH in the U.S. and build a pipeline. The inability to access necessary capital when needed on acceptable terms, or at all, could force us to delay or limit our pursuit of other future business opportunities.

We believe that we will continue to expend substantial resources for the foreseeable future, including costs associated with our efforts to commercialize IBSRELA and XPHOZAH; conducting pediatric clinical trials for IBSRELA; our ongoing efforts to evaluate and seek approval of tenapanor for the treatment of CIC, including our ongoing Phase 3 clinical trial in this indication; manufacturing for IBSRELA and XPHOZAH; investments to build a pipeline; and research and development related to potential new product candidates, including development costs related to RDX10531, a next-generation sodium/hydrogen exchanger 3 (NHE3) inhibitor. The inability to access necessary capital when needed on acceptable terms, or at all, could force us to delay or limit our development of potential new products, or our pursuit of future business opportunities. Our future funding requirements will depend on many factors, including, but not limited to:

•the extent to which we are able to continue to generate and increase product revenue from sales of IBSRELA and XPHOZAH;

•the extent to which the actions of the current administration may result in downward pressure on the price that we receive for IBSRELA and XPHOZAH;

Table of Co n t e n t s

•the availability of adequate third-party reimbursement for IBSRELA;

•the manufacturing, selling and marketing costs associated with IBSRELA and XPHOZAH;

•the timing, receipt and amount of milestones or royalties from our collaboration partners, if any;

•the cash requirements necessary to expand our business;

•the cash requirements for our ongoing efforts to evaluate and seek approval of tenapanor for the treatment of CIC, including our ongoing Phase 3 clinical trial in this indication;

•the cash requirements for the discovery and/or development of other potential product candidates, including RDX10531;

•the time and cost necessary to respond to technological and market developments;

•the payment of interest and principal related to our loan and security agreement entered into with SLR, as amended to date.

Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to delay or limit additional clinical trials for tenapanor, or delay or limit our pursuit of other future business opportunities.

Principal Risks Related to Our Business

We are substantially dependent on the successful commercialization of IBSRELA, and there is no guarantee that we will maintain sufficient market acceptance for IBSRELA, grow market share for IBSRELA, secure and maintain adequate coverage and reimbursement for IBSRELA, or generate sufficient revenue from product sales of IBSRELA.

We began selling IBSRELA in the U.S. in March 2022. The overall commercial success of IBSRELA will depend on a number of factors, including the following:

•the ability of the third-party manufacturers we contract with to provide an adequate (in amount and quality) supply of product to support the market demand for IBSRELA;

•our ability to obtain and sustain an adequate level of coverage and reimbursement for IBSRELA by third-party payors;

•the effectiveness of IBSRELA as a treatment for adult patients with IBS-C;

•whether IBSRELA will be subject to price negotiations under the IRA, and the timing and impact of those price negotiations on the revenue from product sales of IBSRELA;

•the extent to which the actions of the current administration may result in downward pressure on the price that we receive for IBSRELA;

•the size of the treatable patient population;

•our ability to successfully expand the IBSRELA eligible patient population, including with respect to our ongoing efforts to evaluate and seek approval of tenapanor for the treatment of CIC;

•our ability to continue to increase the market share of IBSRELA;

•the effectiveness of our sales, market access and marketing efforts;

•whether physicians view IBSRELA as a safe and effective treatment for adult patients with IBS-C, which will impact the adoption of IBSRELA by physicians for the treatment of IBS-C;

Table of Co n t e n t s

•the availability, perceived advantages, relative cost, relative safety and relative efficacy of IBSRELA compared to alternative and competing treatments;

•the prevalence and severity of adverse side effects of IBSRELA;

•our potential involvement in lawsuits in connection with enforcing intellectual property rights in and to IBSRELA;

•our potential involvement in third-party interference, opposition, derivation or similar proceedings with respect to our patent rights directed to IBSRELA, and avoiding other challenges to our patent rights and patent infringement claims; and

•a continued acceptable safety and tolerability profile of IBSRELA following approval.

The amount of potential revenue we may achieve from the commercialization of IBSRELA is subject to these and other factors, and may be unpredictable from quarter-to-quarter. If the number of patients in the market for IBSRELA or the price that the market can bear is not as significant as we estimate, or if we are not able to continue to secure and maintain physician and patient acceptance of IBSRELA or adequate coverage and reimbursement for IBSRELA, or if we are not successful in our efforts to develop and obtain regulatory approval for IBSRELA for CIC patients in the time frame we expect, or at all, we may not generate sufficient revenue from sales of IBSRELA to achieve our business goals. Any failure of IBSRELA to maintain market acceptance, continue to increase market share, obtain and maintain sufficient third-party coverage or reimbursement, or achieve commercial success would adversely affect our results of operations.

We began selling XPHOZAH in the U.S. in November 2023. The overall commercial success of XPHOZAH will depend on a number of factors, including the following:

19•the extent to which the actions of the current administration may result in downward pressure on the price that we receive for XPHOZAH;

Table of Contents

•the ability of the third-party manufacturers we contract with to provide an adequate (in amount and quality) supply of product to support the market demand for XPHOZAH;

•whether or not the content and breadth of the label that has been approved by the ~~U.S.~~ FDA for XPHOZAH will materially and adversely impact our ability to commercialize the product for the approved indication;

•the prevalence and severity of adverse side effects of XPHOZAH;

•acceptance of XPHOZAH as safe, effective and well-tolerated by patients and the medical community;

•our ability to manage the commercialization of IBSRELA and XPHOZAH and the complex pricing and reimbursement negotiations that may arise with marketing products containing the same active ingredient at different doses for separate indications;

•the availability, perceived advantages, relative cost, relative safety and relative efficacy of XPHOZAH compared to alternative and competing treatments;

•obtaining and sustaining an adequate level of coverage and reimbursement for XPHOZAH by third-party payors;

•our potential involvement in lawsuits in connection with enforcing intellectual property rights in and to XPHOZAH;

Table of Co n t e n t s

•our potential involvement in third-party interference, opposition, derivation or similar proceedings with respect to our patent rights, and avoiding other challenges to our patent rights and patent infringement claims; and

•a continued acceptable safety and tolerability profile of XPHOZAH following approval.

There is no guarantee that we will achieve sufficient market acceptance for XPHOZAH, or that we will be able to secure and maintain adequate coverage and reimbursement for XPHOZAH, or generate sufficient revenue from product sales of XPHOZAH. The inclusion of XPHOZAH in the ESRD PPS creates additional uncertainty as to the commercial opportunity for XPHOZAH. See “—XPHOZAH isbecame ~~now~~part ~~included~~of in the ESRD PPS, ~~effective~~on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,; ~~and~~this asresulted in a ~~result~~negative ~~the~~and material impact on our XPHOZAH revenue ~~that~~in we2025; ~~may~~and ~~generate~~the oncontinued ~~sales~~lack of Medicare Part D coverage for XPHOZAH will beresult ~~negatively~~in ~~and~~a materially ~~impacted~~lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” below.

XPHOZAH isbecame ~~now~~part ~~included~~of in the ESRD PPS, ~~effective~~on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,; ~~and~~this asresulted in a ~~result~~negative ~~the~~and material impact on our XPHOZAH revenue ~~that~~in we2025; ~~may~~and ~~generate~~the oncontinued ~~sales~~lack of Medicare Part D coverage for XPHOZAH will beresult ~~negatively~~in ~~and~~a materially ~~impacted~~lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS.

In January 2011, ~~the~~ CMS, an agency within the United States Department of Health and Human Services responsible for administering the Medicare program, implemented the ESRD PPS, a new PPS for dialysis treatment. Under the ESRD PPS, CMS generally makes a single bundled payment to the dialysis facility for each dialysis treatment that covers all items and services routinely required for dialysis treatments furnished to Medicare beneficiaries in Medicare-certified ESRD facilities or at their home, including the cost of certain drugs defined by CMS to be part of the renal dialysis service. CMS included XPHOZAH in the ESRD PPS, effective January 1, 2025, ~~which~~eliminating ~~means~~ coverage for XPHOZAH for Medicare beneficiaries isunder noMedicare ~~longer~~Part ~~available~~D. ~~under~~The change in Medicare ~~Part~~reimbursement D,coverage had a negative and asmaterial aimpact ~~result~~on ~~the~~our XPHOZAH revenue ~~that~~in we2025. ~~may~~We ~~generate~~anticipate onthe ~~sales~~continued lack of Medicare Part D coverage for XPHOZAH will beresult ~~negatively~~in ~~and~~a materially ~~impacted~~lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS.

The extent to which the inclusion of XPHOZAH in the ESRD PPS will continue to materially and adversely impact our XPHOZAH business is dependent on the following:

•the extent to which ~~access to XPHOZAH is impacted by the elimination of Medicare Part D coverage for XPHOZAH on January 1, 2025, and the extent to which~~ this change will interfere with the shared decision-making between healthcare professionals and their patients, regardless of insurance coverage; and

20IBSRELA and/or XPHOZAH may cause undesirable side effects or have other properties that could limit the commercial success of the products.

Table of Contents

IBSRELA and/or XPHOZAH may cause undesirable side effects or have other properties that could limit the commercial success of the product.

Undesirable side effects caused by IBSRELA and/or XPHOZAH could cause us or regulatory authorities to interrupt, delay or halt the commercialization of the product. Despite marketing approval for IBSRELA and XPHOZAH, the prevalence and/or severity of side effects caused by IBSRELA and/or XPHOZAH could result in a number of potentially significant negative consequences, including:

•regulatory authorities may withdraw their approval of the product or seize the product;

•we or a collaboration partner may be required to recall the product;

•additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof, including the imposition of a REMS which could require creation of a Medication Guide or patient package insert outlining the risks of such side effects for distribution to patients, a communication plan to educate healthcare providers of the drugs’ risks, as well as other elements to assure safe use of the product, such as a patient registry and training and certification of prescribers;

•we or a collaboration partner may be subject to fines, injunctions or the imposition of civil or criminal penalties;

•regulatory authorities may require the addition of new labeling statements, such as a “black box” warning or a contraindication;

•we could be sued and held liable for harm caused to patients;

Table of Co n t e n t s

•the product may become less competitive; and

•our reputation may suffer.

Any of the foregoing events could prevent us, or a collaboration partner, from achieving or maintaining market acceptance of IBSRELA and/or XPHOZAH, and could result in the loss of significant revenue to us, which would materially and adversely affect our results of operations and business.

Third-party payor coverage and reimbursement status of newly commercialized products are uncertain. Failure to obtain or maintain adequate coverage and reimbursement for IBSRELA and XPHOZAH could limit our ability to market those products and decrease our ability to generate revenue.

The pricing, coverage and reimbursement of IBSRELA and XPHOZAH must be adequate to support a commercial infrastructure. The availability and adequacy of coverage and reimbursement by governmental and private payors are essential for most patients to be able to afford treatments. Sales of IBSRELA and XPHOZAH, will depend substantially, both domestically and abroad, on the extent to which the costs of the product will be paid for by health maintenance, managed care, pharmacy benefit, and similar healthcare management organizations, or reimbursed by government authorities, private health insurers, and other third-party payors. If coverage and reimbursement are not available, or are available only to limited levels, we, or our collaboration partners, may not be able to successfully commercialize IBSRELA, or XPHOZAH. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a return on our investment.

In the U.S., CMS decides whether and to what extent a new drug will be covered and reimbursed under Medicare. Private payors tend to follow the coverage reimbursement policies established by CMS to a substantial degree. ~~Beginning~~On January 1, 2025, XPHOZAH, along with other oral drugs for ESRD ~~related~~patients ~~drugs~~on dialysis without injectable or intravenous equivalents, ~~are~~became ~~now~~part ~~included~~of in the ESRD PPS, ~~thereby~~and ~~eliminating~~ coverage for XPHOZAH and these other ~~ESRD~~oral ~~related~~ drugs under Medicare Part D aswas ~~of such date~~eliminated. See “—XPHOZAH isbecame ~~now~~part ~~included~~of in the ESRD PPS, ~~effective~~on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,; ~~and~~this asresulted in a ~~result~~negative ~~the~~and material impact on our XPHOZAH revenue ~~that~~in we2025; ~~may~~and ~~generate~~the oncontinued ~~sales~~lack of Medicare Part D coverage for XPHOZAH will beresult ~~negatively~~in ~~and~~a materially ~~impacted~~lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” above.

Outside the U.S., international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, Japan, China and other countries has and will continue to put pressure on the pricing and usage of IBSRELA and XPHOZAH, even if regulatory approval is received in such countries. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medicinal products, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our ~~product candidates~~products. Accordingly, in markets outside the U.S., the reimbursement for our products may be reduced compared with the U.S. and may be insufficient to generate commercially reasonable revenue and profits.

Table of Contents

for our products may be reduced compared with the U.S. and may be insufficient to generate commercially reasonable revenue and profits.

Moreover, increasing efforts by governmental and third-party payors in the U.S. and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, these caps may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale of IBSRELA and XPHOZAH, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

We rely completely on third parties, including certain single-source suppliers, to manufacture IBSRELA and XPHOZAH. If they are unable to comply with applicable regulatory requirements, unable to source sufficient raw materials, experience manufacturing or distribution difficulties or are otherwise unable to manufacture sufficient quantities to meet demand, our commercialization of IBSRELA and XPHOZAH may be materially harmed.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture IBSRELA or XPHOZAH on a commercial scale, or to manufacture our drug supplies for use in the conduct of our nonclinical and clinical studies. Our success depends upon our ability to enter into new supplier agreements and maintain our relationships with suppliers who are critical and necessary to the production of our drug supply.

The facilities used by our CMOs to manufacture our drug supply are subject to inspection by the ~~U.S.~~ FDA. Our ability to control the manufacturing process of our product candidates is limited to the contractual requirements and obligations we impose on our CMOs. Although they are contractually required to do so, we are completely dependent on our CMOs for compliance with the regulatory requirements, known as cGMP requirements, for manufacture of both active drug substances and finished drug products.

Table of Co n t e n t s

impose on our CMOs. Although they are contractually required to do so, we are completely dependent on our CMOs for compliance with the regulatory requirements, known as cGMP requirements, for manufacture of both active drug substances and finished drug products.

The manufacture of pharmaceutical products requires significant expertise and capital investment. Manufacturers of pharmaceutical products often encounter difficulties in commercial production. These problems may include difficulties with production costs and yields, quality control, including stability of the product and quality assurance testing, and shortages of qualified personnel, as well as compliance with federal, state and foreign regulations and the challenges associated with complex supply chain management. Even if our CMOs do not experience problems and commercial manufacturing is achieved, their maximum or available manufacturing capacities may be insufficient to meet commercial demand. Finding alternative manufacturers or adding additional manufacturers requires a significant amount of time and involves significant expense. New manufacturers would need to develop and implement the necessary production techniques and processes, which along with their facilities, would need to be inspected and approved by the regulatory authorities in each applicable territory. In addition, the raw materials necessary to make API for our products are acquired from a limited number of sources. Any delay or disruption in the availability of these raw materials could result in production disruptions, delays or higher costs with consequent adverse effects on us.

If our CMOs fail to adhere to applicable cGMP or other regulatory requirements, experience delays or disruptions in the availability of raw materials or experience manufacturing or distribution problems, we may suffer significant consequences, including the inability to meet our product requirements for our clinical development programs, and such events could result in product seizures or recalls, loss of product approval, fines and sanctions, reputational damage, shipment delays, inventory shortages, inventory write-offs and other product-related charges and increased manufacturing costs. As a result, or if maximum or available manufacturing capacities are insufficient to meet demand, our development or our commercialization efforts for IBSRELA and/or XPHOZAH may be materially harmed.

We may rely on foreign CROs and CMOs, which may be subject to U.S. legislation, sanctions, trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies. For example, the U.S. BIOSECURE Act, which was enacted in December 2025, prohibits federal agencies from procuring or using any biotechnology equipment or services from “biotechnology companies of concern”, or entering into, extending, or renewing any contracts with entities that use such biotechnology equipment or services from “biotechnology companies of concern”. Congress has interpreted a “biotechnology company of concern” as an entity that is under the control of a foreign adversary and that poses a risk to national security based on its research or multiomic data collection (e.g., collection of genomic information). While the U.S. BIOSECURE Act has a grandfathering period of five years for existing contracts, and has carveouts for manufacture of drugs for supply under Medicaid and Medicare Part B, subject to the Secretary of Veterans Affairs’ discretion, the impact of the U.S. BIOSECURE Act on the biotechnology industry is uncertain. If the foreign CROs and CMOs we rely on become subject to trade restrictions, sanctions, increased tariffs or other regulatory requirements by the U.S. government (including designation as a “biotechnology company of concern” under the U.S. BIOSECURE Act), or if the U.S. or Chinese government take retaliatory actions due to recent or increased tensions between the U.S. and China, it may have the potential to severely restrict the ability of U.S. biopharmaceutical companies like us to purchase services or products from, or otherwise collaborate with, certain “biotechnology companies of concern” without losing the ability to contract with, or otherwise receive funding from, the U.S. government.

Our future business prospects may depend on our ability, alone or through our current or future collaborations, to successfully develop, gain regulatory approval of and commercialize our current and future product candidates.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, including new uses for currently approved products, we must conduct extensive clinical studies to demonstrate the safety and efficacy of the product candidates in humans. The drug development process, including obtaining regulatory approval for a product, is a long, expensive and uncertain process, involving a high degree of risk. We cannot be certain that we will be able to complete ongoing clinical trials or to announce results of such trials with respect to any of our product candidates, on the timelines we expect or at all, or that the results of our clinical trials or other activities under our development programs will be positive. We cannot be certain that we will be able to advance such product candidates into additional trials or to successfully develop, obtain regulatory approval for, or successfully commercialize any of our product candidates, if approved.

For example, in October 2025, we announced the initiation of a development program for RDX10531, a next-generation NHE3 inhibitor with potential application across multiple therapeutic areas. In January 2026, we initiated ACCEL (ten-03-301), a Phase 3 clinical trial designed to assess the safety and efficacy of tenapanor for the treatment of CIC. Enrollment in ACCEL is expected throughout 2026, with topline data read out in the second half of 2027. We may not be able to demonstrate the

Table of Co n t e n t s

efficacy and safety of these or any future product candidates, or we may encounter other issues with any clinical trials or non-clinical studies required for regulatory submissions of our product candidates. The results of clinical trials or non-clinical studies of our product candidates at any stage may not support further development or may not be sufficient to file for and obtain regulatory approval on the timelines we expect or at all. The FDA or other regulatory authorities may not agree with our interpretation of the results of clinical trials or non-clinical studies. Other decisions or actions of the FDA or other regulatory authorities may affect our plans, progress, results, timing or next steps, including whether to proceed with further development. Some or all of our current or future non-clinical studies or clinical trials may fail to meet their primary or key secondary endpoints, raise safety issues or generate mixed results, resulting in delays to or discontinuation of certain development efforts and/or additional expense.

In the conduct of clinical trials, we could encounter delays in our development if any clinical trials are suspended or terminated by us, by the IRBs of the institutions in which the trial is being conducted, or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Our ongoing and planned development activities may be negatively impacted by a number of factors. Widespread healthcare and vendor staffing shortages and increased competition for patients and clinical sites may make it difficult to enroll patients in our non-clinical studies and/or clinical trials and/or identify and activate participating clinical sites for our trials, may cause other delays at clinical trial sites and/or vendors, and may increase the rates of patients withdrawing from our clinical trials following enrollment. Some clinical sites may decline or delay participation in our trials due to capacity and resource constraints. These or other factors may substantially slow clinical site identification and activation and enrollment in our clinical trials, or cause us to pause trials, which may, in each case, significantly impact our ability to meet our expected timelines, budgets, or other plans.

Identifying and qualifying patients to participate in any clinical trials is critical to the success of the clinical trials. The timing of any future clinical trials that we may determine to conduct will depend, in part, on the speed at which we can recruit patients to participate in testing our product candidates. Patients may be unwilling to participate in our clinical studies because of concerns about adverse events observed with the current standard of care, competitor products and/or other investigational agents, in each case for the same indications and/or similar patient populations. In addition, patients currently receiving treatment with the current standard of care or a competitor product may be reluctant to participate in a clinical trial with an investigational drug, or our inclusion and exclusion criteria for our clinical trials may present challenges in identifying acceptable patients. As a result, the timeline for recruiting patients and conducting clinical trials may be delayed. These delays could result in increased costs, delays in advancing our development of the program or termination of the clinical studies altogether. Any of these occurrences may significantly harm our business, financial condition and prospects.

In addition, limitations or modifications to study procedures, study visits or data collection, restrictions on key clinical trial activities such as monitoring or auditing, or other restrictions that may affect data analysis activities may require additional assessment and evaluation from IRBs, negatively impact the integrity or completeness of our trial data, the powering of a trial, the integrity or relevance of clinical study endpoints, or impact the timing of availability of results. Any of these factors could delay or increase the expense of our ongoing or future development programs.

The drug development process can take many years and may include post-marketing studies and surveillance, which will require the expenditure of substantial resources. Of the large number of drugs in development in the U.S., only a small percentage will successfully complete the FDA regulatory approval process and will be commercialized. Accordingly, even if we have the requisite financial resources, when needed, to continue to fund our development efforts, our current or future product candidates may never be successfully developed or commercialized. Even if we conduct the trials required by the FDA, the FDA may ultimately decide that the design, number and type of trials, number of patients studied or results, even if positive, are not sufficient to file for or gain regulatory approval of any of our product candidates in the indications we study, or do not support the safety or efficacy or our intended profile for the product. Any of these negative outcomes could materially impact our ongoing or future development programs and adversely affect our business, results of operations, financial condition and prospects and could lead us to make significant further changes to the scope and nature of our development efforts.

Our future results depend on CMOs, many of whom are our single source manufacturers.

Many of our CMOs are currently single source manufacturers. While we try to obtain multiple sources whenever possible, similar to other commercial pharmaceutical companies, three stages of our manufacturing process are currently completed by a single source, which exposes us to a number of risks related to our supply chain, including delivery failure and drug shortages. To date, we have no qualified alternative sources for these single source CMOs.

Our manufacturing and commercial supply agreements with our CMOs, including our single source CMOs, contain or are likely to contain pricing provisions that are subject to adjustment based on factors outside of our control, including changes in market prices. Substantial increases in the prices for necessary materials and equipment, whether due to supply chain or logistics issues or due to inflation, would increase our operating costs and could reduce our margins. Any attempts to increase the announced or expected prices of IBSRELA and/or XPHOZAH in response to increased costs could be viewed negatively by the public and could adversely affect our business, prospects, financial condition, and results of operations.24

Table of Co n t e n t s

single source, which exposes us to a number of risks related to our supply chain, including delivery failure and drug shortages. To date, we have no qualified alternative sources for these single source CMOs.

Our manufacturing and commercial supply agreements with our CMOs, including our single source CMOs, contain or are likely to contain pricing provisions that are subject to adjustment based on factors outside of our control, including changes in market prices. Substantial increases in the prices for necessary materials and equipment, whether due to supply chain or logistics issues, tariffs or due to inflation, would increase our operating costs and could reduce our margins. Any attempts to increase the announced or expected prices of IBSRELA and/or XPHOZAH in response to increased costs could be viewed negatively by the public and could adversely affect our business, prospects, financial condition, and results of operations.

Further, we currently and may in the future rely on foreign CMOs and CROs. Such foreign CMOs and CROs may be subject to U.S. legislation, sanctions, trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies.

An inability to continue to source product from any of these CMOs, which could be due to regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a CMO, labor disputes or shortages, unexpected demands, or quality issues, could adversely affect our ability to satisfy demand for our products, which could adversely and materially affect our product sales and operating results, which could significantly harm our business. Furthermore, qualifying alternate suppliers or developing our own manufacturing capability for certain highly customized stages of our manufacturing process ~~may~~would be time consuming and costly. Furthermore, any new CMO would need to complete validation batches and be approved by regulatory authorities as our manufacturer, including passing any required inspections, before we would be able to utilize the drug product or drug substance they manufacture for commercial purposes, which could result in significant costs and delays in product availability. There can be no assurance that our business, financial condition and results of operations will not be materially and adversely affected by supply chain disruptions. Any disruption in the supply chain, whether or not from a single source CMO, could temporarily disrupt production of our drug supply until an alternative supplier is fully qualified by us or until such CMO is able to perform. There can be no assurance that we would be able to successfully retain an alternative CMO on a timely basis, on acceptable terms, or at all. Changes in business conditions, force majeure, governmental changes, and other factors beyond our control or which we do not presently anticipate, could also affect our CMOs’ ability to deliver components to us on a timely basis. Any of the foregoing could materially and adversely affect our results of operations, financial condition and prospects.

Our operating activities may be restricted as a result of covenants related to the indebtedness under our loan and security agreement with SLR, as amended, and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our business.

On February 23, 2022, we entered into a loan and security agreement (the 2022 Loan Agreement) with SLR as collateral agent and the lenders listed in the 2022 Loan Agreement (collectively, the 2022 Lenders). The 2022 Loan Agreement was subsequently amended in August 2022 (the First Amendment), February 2023 (the Second Amendment), October 2023 (the Third Amendment), ~~and~~ October 2024 (Fourth Amendment), and June 2025 (Fifth Amendment). The loan was funded in the amount of $27.5 million on February 23, 2022 and additional amounts of $22.5 million, $50.0 million, $50.0 million and $50.0 million were drawn on October 19, 2023, March 1, 2024, ~~and~~ October 29, 2024 and June 30, 2025, respectively. In addition, we have the option to draw up to an additional $100.0 million, consisting of two separate term loans, each in a principal amount of $50.0 million: by(a) the first of which is available at the Company’s election through June 30, ~~2025~~2026 and (b) the second of which is available at the Company’s election through December 20, 2026. Until we have repaid all funded indebtedness, the 2022 Loan Agreement subjects us to various customary covenants, including requirements as to financial reporting and insurance and restrictions on our ability to dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to enter into licensing agreements, to engage in transactions with affiliates, and to encumber our intellectual property. Our business may be adversely affected by these restrictions on our ability to operate our business.

Table of Co n t e n t s

In addition, we may be required to repay the outstanding indebtedness under the loan facility if an event of default occurs under the 2022 Loan Agreement. An event of default will occur if, among other things, we fail to make payments under the 2022 Loan Agreement; we breach any of our covenants under the 2022 Loan Agreement, subject to specified cure periods with respect to certain breaches; the Lender determines that a material adverse change has occurred; we or our assets become subject to certain legal proceedings, such as bankruptcy proceedings; we are unable to pay our debts as they become due; or we default on contracts with third parties which would permit the Lender to accelerate the maturity of such indebtedness or that could have a material adverse change on us. We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness at the time any such event of default occurs. In this case, we may be required to limit or reduce our activities necessary to commercialize IBSRELA and/or XPHOZAH, or delay or limit clinical trials for tenapanor or other product candidates. The Lenders could also exercise its rights as collateral agent to take possession of and to dispose of the collateral securing the term loans, which collateral includes substantially all of our property (excluding intellectual property, which is subject to a negative pledge). Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events.

Additional Risks Related to Our Business and Industry

We face substantial competition, and our competitors may discover, develop or commercialize products faster or more successfully than us.

The biotechnology and pharmaceutical industries are highly competitive, and we face significant competition from companies in the biotechnology, pharmaceutical and other related markets that are researching and marketing products designed to address diseases that we are currently developing products to treat.

23Competition for IBSRELA largely comes from three prescription products marketed for certain patients with IBS-C that we are aware of, including Linzess (linaclotide), Amitiza (lubiprostone) and Trulance (plecanatide). Generic lubiprostone is also available in the U.S. Additionally, over-the-counter products not indicated for IBS-C are commonly used to treat the constipation component of IBS-C, alone and in combination with the IBS-C-indicated prescription therapies. In addition, if successfully developed and approved for the treatment of CIC, we believe IBSRELA will also face competition from branded products Linzess (linaclotide) and Trulance (plecanatide) as well as generic lubiprostone and prucalopride.

Table of Contents

Competition for IBSRELA largely comes from three prescription products marketed for certain patients with IBS-C that we are aware of, including Linzess (linaclotide), Amitiza (lubiprostone) and Trulance (plecanatide). Generic lubiprostone is also available in the U.S. Additionally, over-the-counter products not indicated for IBS-C are commonly used to treat the constipation component of IBS-C, alone and in combination with the IBS-C-indicated prescription therapies.

XPHOZAH is indicated to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy. The various types of phosphate binders commercialized in the U.S. include the following: Calcium acetate (several prescription brands including PhosLo and Phoslyra); Lanthanum carbonate (Fosrenol); Sevelamer hydrochloride (Renagel); Sevelamer carbonate (Renvela); Sucroferric oxyhydroxide (Velphoro) and Ferric citrate (Auryxia). All of the listed phosphate binders are available as generics in the U.S., with the exception of Velphoro and Auryxia. Additionally, over-the-counter calcium carbonate, such as Tums and Caltrate, is also used to bind phosphorus.

In addition to the currently available phosphate binders, we are aware of at least four phosphate binders in development, including AP-301, developed by Alebund Pharmaceutical (Hong Kong) Limited and currently in Phase 3; VS-505, developed by Vidasym and currently in clinical development; TS-172, developed by Taisho ~~Pharmaceuticals~~Pharmaceutical and currently in Phase 23; and OLC, developed by Unicycive Therapeutics, which has ~~announced~~resubmitted its ~~plans~~NDA to ~~seek~~the ~~U.S.~~ FDA for approval via the 505(b)(2) pathway. ~~OLC has demonstrated pharmacodynamic bioequivalence to Fosrenol.~~ Additionally, Alebund is developing AP-306, an inhibitor of phosphate transporters NaPi-2b, PiT-1, and PiT-2, thus far studied in a Phase 2 clinical trial.

It is possible that our competitors’ drugs may be less expensive and more effective than our product candidates, or may render our product candidates obsolete. It is also possible that our competitors will commercialize competing drugs or treatments before we or our collaboration partners can launch any products developed from our product candidates. We also may face increased competition in the future as new companies enter into our target markets.

Many of our competitors have materially greater name recognition and financial, manufacturing, marketing, research and drug development resources than we do. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. Large pharmaceutical companies in particular have extensive expertise in preclinical and clinical testing and in obtaining regulatory approvals for drugs. In addition, academic institutions, government agencies and other public and private organizations conducting research may seek patent protection with respect to potentially competitive products or technologies. These organizations may also establish exclusive collaboration partnerships or licensing relationships with our competitors.

Table of Co n t e n t s

We may experience difficulties in managing our current activities and growth given our level of managerial, operational, financial and other resources.

While we have continued to work to optimize our management composition, personnel and systems to support our current activities for future growth, these resources may not be adequate for this purpose. Our need to effectively execute our business strategy requires that we:

•manage our commercialization activities effectively;

•manage our clinical trials effectively;

•manage our internal development efforts effectively while carrying out our contractual obligations to licensors, contractors, collaborators, government agencies and other third parties;

•continue to improve our operational, financial and management controls, reporting systems and procedures; and

•retain and motivate our remaining employees and potentially identify, recruit and integrate additional employees.

If we are unable to maintain or expand our managerial, operational, financial and other resources to the extent required to manage our development and commercialization activities, our business will be materially adversely affected.

We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.

We may consider strategic transactions, such as acquisitions of companies, asset purchases, and/or in-licensing of products, product candidates or technologies. In addition, if we are unable to access capital on a timely basis and on terms that are acceptable to us, we may be forced to further restructure certain aspects of our business or identify and complete one or more strategic collaborations or other transactions in order to fund the commercialization of IBSRELA and XPHOZAH, and/or the development of discovery and developmental assets through the use of alternative structures. Additional potential transactions that we may consider include a variety of different business arrangements, including spin-offs, spin outs, collaboration partnerships, joint ventures, restructurings, divestitures, business combinations and investments. Any such transaction may require us to incur non-recurring or other charges, may increase our near- and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations and financial results. For example, these transactions may entail numerous operational and financial risks, including:

Table of Contents

that we may consider include a variety of different business arrangements, including spin-offs, spin outs, collaboration partnerships, joint ventures, restructurings, divestitures, business combinations and investments. Any such transaction may require us to incur non-recurring or other charges, may increase our near- and long-term expenditures and may pose significant integration challenges or disrupt our management or business, which could adversely affect our operations and financial results. For example, these transactions may entail numerous operational and financial risks, including:

•up-front, milestone and royalty payments, equity investments and financial support of new research and development candidates including increase of personnel, all of which may be substantial;

•exposure to unknown liabilities;

•disruption of our business and diversion of our management’s time and attention in order to develop acquired products, product candidates or technologies;

•incurrence of substantial debt or dilutive issuances of equity securities;

•higher-than-expected acquisition and integration costs;

•write-downs of assets or goodwill or impairment charges;

•increased amortization expenses;

•difficulty and cost in combining the operations and personnel of any acquired businesses with our operations and personnel;

•impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and

•inability to retain key employees of any acquired businesses.

Accordingly, although there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks and could have a material adverse effect on our business, results of operations, financial condition and prospects.

~~If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of IBSRELA and/or XPHOZAH.~~27

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and our commercialization of IBSRELA and XPOHZAH. For example, we may be sued if any product we develop and/or commercialize allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would

Table of Co n t e n t s

~~require~~If ~~significant~~product ~~financial~~liability ~~and~~lawsuits ~~management~~are ~~resources.~~brought ~~Regardless~~against ofus, ~~the~~we ~~merits~~may orincur ~~eventual~~substantial ~~outcome,~~liabilities ~~liability~~and ~~claims~~ may ~~result~~be ~~in:~~required to limit commercialization of IBSRELA and/or XPHOZAH.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and our commercialization of IBSRELA and XPHOZAH. For example, we may be sued if any product we develop and/or commercialize allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

•decreased demand for the product;

•injury to our reputation;

•withdrawal of clinical trial participants;

•costs to defend the related litigation;

•a diversion of management’s time and our resources;

•substantial monetary awards to trial participants or patients;

•regulatory investigations, product recalls or withdrawals, or labeling, marketing or promotional restrictions;

•loss of revenue; and

•the inability to commercialize or co-promote IBSRELA and/or XPHOZAH.

Our inability to obtain and maintain sufficient product liability insurance at an acceptable cost and scope of coverage to protect against potential product liability claims could prevent or inhibit the commercialization of any products we develop. Although we maintain product liability insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our insurance policies also have various exclusions and deductibles, and we may be subject to a product liability claim for which we have no coverage. We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Moreover, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses.

If we fail to attract, retain and motivate our executives, senior management and key personnel, our business will suffer.

Recruiting and retaining qualified scientific, sales and marketing, clinical, medical, business development, manufacturing, finance and administrative personnel is critical to our success. We are highly dependent on our executives, senior management and certain other key employees. The loss of the services of our executives, senior management or other key employees could impede the achievement of our development and commercial objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executives, senior management and other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain marketing approval of and commercialize products. We may be unable to hire, train or motivate these key personnel on acceptable terms given the intense competition among numerous biopharmaceutical companies for similar personnel, particularly in our geographic regions. If we are unable to continue to attract and retain high quality personnel, our ability to grow and pursue our business strategy will be limited.

Table of Co n t e n t s

Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.

The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal data, such as information that we may collect in connection with clinical trials in the U.S. and abroad. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards or perception of their requirements may have on our business. This evolution may create uncertainty in our business; affect our ability to operate in certain jurisdictions, or to collect, store, transfer use and share personal information; necessitate the acceptance of more onerous obligations in our contracts; result in liability or impose additional costs on us. The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.

As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. In the U.S., HIPAA imposes, among other things, certain standards relating to the privacy, security, transmission, and breach reporting of individually identifiable health information. We may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA. Depending on the facts and circumstances, we could be subject to significant penalties if we violate HIPAA.

26A number of states have also adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners. For example, the CCPA requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf. Additional compliance investment and potential business process changes may also be required. Similar laws have passed in other states, reflecting a trend toward more stringent privacy legislation in the U.S. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In the event that we are subject to or affected by HIPAA, the CCPA, or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Table of Contents

things, certain standards relating to the privacy, security, transmission, and breach reporting of individually identifiable health information. We may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA. Depending on the facts and circumstances, we could be subject to significant penalties if we violate HIPAA.

Certain states have also adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners. For example, the CCPA requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf. Additional compliance investment and potential business process changes may also be required. Similar laws have passed in other states and are continuing to be at the state and federal level, reflecting a trend toward more stringent privacy legislation in the U.S. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In the event that we are subject to or affected by HIPAA, the CCPA, or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Furthermore, the FTC also has authority to initiate enforcement actions against entities that mislead customers about HIPAA compliance, make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5(a) of the FTC Act. According to the FTC, failing to take appropriate steps to keep consumers’ personal information secure can constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act. The FTC and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive, including on websites, to regulate the presentation of website content. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions. For example, in Europe, we may be subject to the European Union General Data Protection Regulation (EU GDPR) ~~went~~and ~~into~~to ~~effect~~the inUnited ~~May~~Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the UK GDPR) (the EU GDPR and UK GDPR together referred to as the GDPR). The GDPR imposes strict requirements for processing the personal data of individuals within the EEA and UK. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million/£17.5 million or 4%four percent of the annual global revenues of the noncompliant company, whichever is greater. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the U.S. and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain. Case law from the Court of Justice of the European Union states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis. On July 10, 2023, the European Commission adopted its Adequacy Decision in relation to the new DPF, rendering the DPF effective as a GDPR transfer mechanism to U.S. entities self-certified under the DPF. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue. In particular, we expect the DPF Adequacy Decision to be challenged and international transfers to the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. As a result, we may have to make certain operational changes and we will have to implement revised standard contractual clauses and other relevant documentation for existing data transfers within required time frames.

Relatedly, following the United Kingdom’s withdrawal from the EEA and the European Union, and the expiry of the transition period, companies have had to comply with both the GDPR and the GDPR as incorporated into United Kingdom national law, the latter regime having the ability to separately fine up to the greater of £17.5 million or 4% of global turnover. On October 12, 2023, the UK Extension to the DPF came into effect (as approved by the UK Government), as a data transfer mechanism from the United Kingdom to U.S. entities self-certified under the DPF. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.29

Table of Co n t e n t s

~~foreseeable~~circumstances ~~future~~and that transfers must be assessed on a case-by-case basis. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue, and weinternational ~~cannot~~transfers ~~yet~~to ~~determine~~the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. As the ~~impact~~regulatory ~~future~~guidance ~~laws~~and enforcement landscape in relation to data transfers continue to develop, ~~regulations~~we could suffer additional costs, ~~standards~~complaints and/or regulatory investigations or fines, and/or ~~market~~if ~~perception~~we ofare ~~their~~otherwise ~~requirements~~unable ~~may~~to ~~have~~transfer onpersonal ~~our~~data ~~business~~between and ~~may~~among ~~not~~countries ~~always~~and beregions ~~able~~in towhich ~~anticipate~~we ~~how~~operate, toit ~~respond~~could toaffect ~~these~~the ~~laws~~manner in which we operate our business, the geographical location or ~~regulations~~segregation of our relevant systems and operations, and could adversely affect our financial results.

In addition, we use AI Technologies in our business. The regulatory framework for AI Technologies is rapidly evolving as many federal, state, and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations. Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of AI Technologies. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.

It is possible that new laws and regulations will be adopted in the United States and in other non-U.S. jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies. We may need to expand resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions. Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies). Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.

Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply. Any failure or perceived failure by us or our employees, representatives, contractors, consultants, CROs, collaborators, or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded, could result in additional cost and liability to us, damage our reputation, and adversely affect our business and results of operations.

We and our collaborators, CROs and other contractors and consultants depend on information technology systems, and any failure of these systems could harm our business. Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, results of operations and financial condition.

We and our collaborators, CROs, and other contractors and consultants collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business. In the ordinary course of our business, we and our collaborators, CROs and other contractors and consultants collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information, clinical trial data and personal information (collectively, Confidential Information). It is critical that we and our collaborators, CROs and other contractors and consultants do so in a secure manner to maintain the confidentiality and integrity of such Confidential Information. We have established physical, electronic and organizational measures designed to safeguard and secure our systems to prevent a data compromise, and rely on commercially available systems, software, tools, and monitoring to provide security for our information technology systems and the processing, transmission and storage of Confidential Information. We have also outsourced elements of our information technology infrastructure, and as a result, a number of third-party vendors may or could have access to our Confidential Information.

Our information technology systems and infrastructure, and those of our current and any future collaborators, CROs, contractors and consultants and other third parties on which we rely, are vulnerable to attack, damage and interruption from diverse threat vectors, such as computer viruses, malware (e.g., ransomware), natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, phishing attacks and other social engineering schemes, attachments to emails, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.

The risk of a security breach or disruption or data loss, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In addition, the prevalent use of mobile devices that access Confidential Information increases the risk of data security breaches, which could lead to the loss of Confidential Information or other intellectual property. We ~~may also face increased cybersecurity risks due to our reliance on internet technology~~ and ~~the~~certain ~~number~~ of our ~~employees~~service ~~who~~providers are ~~working~~from ~~remotely,~~time ~~which may create additional opportunities for cybercriminals~~ to ~~exploit~~time ~~vulnerabilities.~~subject ~~Furthermore, because the techniques used~~ to ~~obtain~~cyberattacks ~~unauthorized access to, or to sabotage, systems change frequently~~ and ~~often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience~~ security ~~breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate~~ incidents ~~or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence~~. The ~~costs~~risk toof usa ~~to mitigate network~~ security ~~problems,~~breach ~~bugs,~~or ~~viruses,~~disruption ~~worms,~~or ~~malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our~~ data ~~security and information technology systems~~loss, ~~our~~particularly ~~efforts~~through tocyberattacks ~~address~~or ~~these~~cyber ~~problems may not be successful~~intrusion, ~~and~~including ~~these~~by ~~problems~~computer ~~could result in unexpected interruptions~~hackers, ~~delays, cessation of service and other harm to our~~

2830

Table of Co n t e n t s

foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In addition, the prevalent use of mobile devices that access Confidential Information increases the risk of data security breaches, which could lead to the loss of Confidential Information or other intellectual property. We may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques, including artificial intelligence, that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. The costs to us to mitigate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service and other harm to our business and our competitive position. Additionally, any integration of artificial intelligence in our or any third party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. There can also be no assurance that our and our collaborators’, CROs’, CMOs, contractors’, consultants’ and other service providers’ cybersecurity risk management program and processes, including policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems, networks and Confidential Information.

We and certain of our service providers are from time to time subject to cyberattacks and security incidents. We do not believe that we have experienced any significant system failure, accident or security breach to date, but if such an event were to occur and cause interruptions in our operations, it could result in a material disruption to our business. In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state privacy and security laws, if applicable. Moreover, if a computer security breach affects our systems or those of our collaborators, CROs or other contractors, or results in the unauthorized release of personally identifiable information, our reputation could be materially damaged. Any adverse impact to the availability, integrity or confidentiality of our or third-party systems or Confidential Information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs, which could materially adversely affect our business, results of operations and financial condition. We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us and could have a material adverse effect on the price of our common stock.

Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements and cause us to fail to meet our reporting obligations. If we cannot in the future favorably assess the effectiveness of our internal controls over financial reporting, investor confidence in the reliability of our financial reports may be adversely affected, which could have a material adverse effect on the trading price of our common stock.

We have formed in the past, and may form in the future, collaboration partnerships, joint ventures and/or licensing arrangements, and we may not realize the benefits of such collaborations.

We have current collaboration partnerships for the commercialization of tenapanor in certain foreign countries, and we may form additional collaboration partnerships, create joint ventures or enter into additional licensing arrangements with third parties in the U.S. and abroad that we believe will complement or augment our existing business. In particular, we have formed collaboration partnerships with Kyowa Kirin for commercialization of tenapanor for hyperphosphatemia in Japan; with Fosun Pharma for commercialization of tenapanor for hyperphosphatemia and IBS-C in China and related territories; in Canada with Knight for commercialization of tenapanor for IBS-C and hyperphosphatemia; and with METiS for the development and commercialization of a portfolio of TGR5 agonist compounds for all therapeutic areas. WeWhile we may pursue future collaborations, we face significant competition in seeking appropriate collaboration partners, and the process to identify an appropriate partner and negotiate appropriate terms is time-consuming and complex. ~~Any~~Delays ~~delays~~ in identifying suitable additional collaboration partners and entering into agreements to ~~develop~~commercialize our ~~product~~products ~~candidates~~in ~~could~~ex-U.S. ~~also~~territories ~~delay~~and/or ~~the~~develop ~~commercialization of~~ our product candidates will delay commercialization thereof, which may reduce their competitiveness even if they reach the market. ~~There~~In isaddition, ~~no guarantee that our~~ current ~~collaboration partnerships~~ or ~~any such arrangements we enter into in the~~ future ~~will~~collaborations ~~be successful,~~ or ~~that~~partnerships ~~any~~with ~~collaboration~~ex-U.S. ~~partner~~parties ~~will~~and ~~commit~~the ~~sufficient~~expected ~~resources~~benefits totherefrom ~~the~~could ~~development,~~be ~~regulatory~~materially ~~approval,~~ and ~~commercialization~~adversely ~~effort~~impacted ~~for~~by ~~such~~current ~~products,~~ or ~~that~~future ~~such~~healthcare ~~alliances~~reform ~~will~~legislation ~~result~~and ininitiatives us(including ~~achieving~~evolving ~~revenues~~“most ~~that justify such transactions.~~

~~Clinical drug development involves a lengthy and expensive process with an uncertain outcome.~~31

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical studies to demonstrate the safety and efficacy of the product candidates in humans. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

In the conduct of additional clinical trials, we could encounter delays in our development if any clinical trials are suspended or terminated by us, by the IRBs of the institutions in which the trial is being conducted, or by the U.S. FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the U.S. FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

In addition, identifying and qualifying patients to participate in any clinical trials is critical to the success of the clinical trials. The timing of any future clinical trials that we may determine to conduct, will depend, in part, on the speed at which we

Table of Co n t e n t s

~~can~~favored ~~recruit~~nation” ~~patients~~pricing toproposals) ~~participate~~that inmay ~~testing~~require ~~our product candidates~~U.S. ~~Patients~~pricing ~~may~~for beour ~~unwilling~~products to ~~participate~~be intied ~~our clinical studies because of concerns about adverse events observed with the current standard of care~~to, ~~competitor products and/~~or ~~other~~otherwise ~~investigational~~impacted ~~agents~~by, inex-U.S. ~~each~~prices ~~case~~obtained ~~for~~by ~~the~~collaborators ~~same indications and/~~or ~~similar patient populations~~partners. InThere ~~addition,~~is ~~patients~~no ~~currently~~guarantee ~~receiving~~that ~~treatment~~our ~~with the~~ current ~~standard~~collaboration ofpartnerships ~~care~~ or aany ~~competitor~~such ~~product~~arrangements ~~may~~we beenter ~~reluctant~~into ~~to participate~~ in athe ~~clinical~~future ~~trial~~will ~~with~~be ~~an investigational drug~~successful, or ~~our~~that ~~inclusion~~any ~~and~~collaboration ~~exclusion~~partner ~~criteria~~will ~~for~~commit ~~our~~sufficient ~~clinical~~resources ~~trials~~to ~~may~~the ~~present~~development, ~~challenges~~regulatory ~~in identifying acceptable patients. As a result~~approval, ~~the timeline for recruiting patients~~ and ~~conducting~~commercialization ~~clinical~~effort ~~trials~~for ~~may~~such ~~be delayed. These delays could result in increased costs~~products, ~~delays in advancing our development of the program~~ or ~~termination~~that ofsuch ~~the~~alliances ~~clinical~~will ~~studies~~result ~~altogether.~~in ~~Any~~us ofachieving ~~these~~revenues ~~occurrences~~that ~~may~~justify ~~significantly~~such ~~harm our business, financial condition and prospects~~transactions.

We will rely on third parties to conduct all of our nonclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for additional products or commercialize our product candidates.

We do not have the ability to independently conduct nonclinical studies or clinical trials. We rely on medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs, to conduct clinical trials on our product candidates. The third parties with whom we contract for execution of the clinical trials play a significant role in the conduct of these trials and the subsequent collection and analysis of data. However, these third parties are not our employees, and except for contractual duties and obligations, we control only certain aspects of their activities and have limited ability to control the amount or timing of resources that they devote to our programs. Although we rely, and will continue to rely, on these third parties to conduct our nonclinical studies and our clinical trials, we remain responsible for ensuring that each of our studies and clinical trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on third parties does not relieve us of our regulatory responsibilities. We, and these third parties are required to comply with current GLPs for nonclinical studies and GCPs for clinical studies. GLPs and GCPs are regulations and guidelines enforced by the ~~U.S.~~ FDA, the Competent Authorities of the Member States of the EEA and comparable foreign regulatory authorities for all of our products in nonclinical and clinical development, respectively. Regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our third-party contractors fail to comply with applicable regulatory requirements, including GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the ~~U.S.~~ FDA, the European Medicines Agency or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. There can be no assurance that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with product produced under cGMP regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which could add additional costs and could delay the regulatory approval process.

Our CMOs manufacture tenapanor API outside of the U.S., ~~our~~Our collaboration partners outside of the U.S. have sought and obtained and may continue to seek and obtain approval to commercialize tenapanor outside of the U.S., and as a result, a variety of risks associated with international operations could materially adversely affect our business.

Our collaboration partners have sought and obtained and may continue to seek and obtain marketing approval for tenapanor outside the U.S. Furthermore, we may seek and obtain marketing approval for IBSRELA or XPHOZAH in other territories outside of the U.S. Additionally, we have contractual agreements with CMOs involving the manufacture of tenapanor API outside of the U.S., and may otherwise engage in business outside of the U.S., including entering into additional contractual agreements with third parties. We are subject to additional risks related to entering these international business markets and relationships, including:

•different regulatory requirements for drug approvals in foreign countries;

•differing U.S. and foreign drug import and export rules;

•reduced protection for intellectual property rights in foreign countries;

•changes in laws or policies governing the terms of foreign trade, and in particular, increased trade restrictions, tariffs or taxes on imports or exports from or to countries where we manufacture or, sell, or our partners sell, our products to may affect the prices of and demand for our products;

•different reimbursement systems, and different competitive drugs;

•economic weakness, including inflation, or political instability in particular foreign economies and markets;

•compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

•foreign taxes, including withholding of payroll taxes;

Table of Contents

•foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

Table of Co n t e n t s

•workforce uncertainty in countries where labor unrest is more common than in the U.S.;

•production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

•potential liability resulting from development work conducted by these distributors; and

•business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters.

~~Our~~Changes ~~business~~in ~~involves~~U.S. ~~the use of hazardous materials~~ and weinternational ~~and~~trade ~~third-parties~~policies ~~with~~may ~~whom~~adversely weimpact ~~contract~~our ~~must~~business ~~comply with environmental laws~~ and ~~regulations,~~operating ~~which can be expensive and restrict how we do business~~results.

We currently rely on both U.S. and foreign third-party manufacturers. The U.S. government and persons involved in the current administration have made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies. The extent and duration of any tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and other countries, the response of such countries, exemptions or exclusions that may be granted, and the availability and cost of alternative sources of supply of materials we purchase from companies in other countries targeted with tariffs.

Any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, may increase the cost of manufacturing our product candidates and platform materials, affect the demand for IBSRELA and XPHOZAH, and import or export of API and finished product. If any new tariffs, export controls, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent trade tension, such changes could have an adverse effect on our business, financial condition and results of operations.

Our business involves the use of hazardous materials and we and third parties with whom we contract must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

We and manufacturers and suppliers with whom we may contract are subject to laws and regulations governing the use, manufacture, storage, handling, and disposal of hazardous materials, including the components of our tenapanor and our product candidates. In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal. We cannot eliminate the risk of contamination, which could cause an interruption of our commercialization efforts, and business operations, and could result in environmental damage requiring costly clean-up and resulting in liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. We cannot guarantee that the safety procedures utilized by third-party manufacturers and suppliers with whom we may contract will comply with the standards prescribed by laws and regulations or will eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance. We do not currently carry biological or hazardous waste insurance coverage.

We or the third parties upon whom we depend may be adversely affected by ~~earthquakes~~natural ordisasters, severe weather, public health emergencies and other ~~natural~~catastrophic ~~disasters~~events, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

WeEvents ~~currently~~outside ~~occupy~~of aour ~~leased~~control, ~~facility~~including ~~located~~natural indisasters, ~~the~~severe ~~San~~or ~~Francisco~~inclement ~~Bay~~weather ~~Area~~(such as extreme snow and ice, ~~which~~extreme inheat, ~~the~~tornados ~~past~~and ~~has~~flooding), ~~experienced~~public ~~severe~~health ~~earthquakes.~~emergencies, Wepower dooutages, ~~not~~cyber ~~carry~~or ~~earthquake~~telecommunications ~~insurance.~~disruptions, ~~Earthquakes~~transportation incidents or other ~~natural~~catastrophic ~~disasters~~events, could severely disrupt our operations, and have a material adverse effect on our business, operating results, ofprospects ~~operations,~~or financial condition. Such events could disrupt our sales efforts, ongoing clinical trials and/or ~~prospects~~other operations by damaging or limiting access to critical infrastructure and facilities, including those operated by third parties on whom we rely, such as contract research organizations, contract manufacturing organizations, suppliers, specialty pharmacies and logistics and distribution providers, or by restricting travel, staffing availability or site access. If any such event prevents or materially impairs our ability, or the ability of these third parties, to manufacture or ship product or product candidates, conduct clinical trial activities, perform quality testing and release, or otherwise operate in the ordinary course, it may be difficult or, in certain cases, impossible for us to continue our business as currently planned.

IfIn ~~a natural disaster~~addition, ~~power~~the ~~outage~~shipment ~~or other event occurred that prevented us from using all or a significant portion~~ of ~~our~~product ~~leased~~and ~~facilities,~~product ~~including our California facility~~candidates, ~~that~~active ~~damaged~~pharmaceutical ~~critical~~ingredients ~~infrastructure~~and ~~supporting~~other ~~access~~materials tomay ~~systems~~be ~~such~~delayed, asdiverted ~~our enterprise financial systems~~ or ~~manufacturing resource planning and enterprise quality systems, or that otherwise~~ disrupted ~~operations,~~by itsevere ~~may~~weather ~~be difficult~~ or ~~time~~other ~~consuming~~events toin ~~restore~~any ~~some~~location ~~business~~where of our ~~business~~third-party ~~functions.~~service ~~The~~providers ~~disaster~~operate ~~recovery~~or ~~and~~through ~~business~~which ~~continuity~~shipments ~~plans~~must wetravel, ~~have~~including inas ~~place~~a ~~currently~~result ~~are~~of ~~not~~extreme ~~holistic~~snow inor ~~coverage~~ice, ~~and~~extreme ~~may~~heat, ~~prove~~tornados, ~~inadequate~~flooding, intransportation ~~the~~accidents ~~event of a serious disaster~~ or ~~similar~~carrier ~~event~~interruptions. WeThese ~~may~~disruptions ~~incur~~could ~~substantial expenses as a~~ result ofin ~~the~~missed ~~limited~~or ~~nature~~delayed ofpatient ~~our~~deliveries, ~~disaster~~delayed ~~recovery~~site ~~and~~resupply, ~~business~~inventory ~~continuity plans~~constraints, ~~which,~~product ~~particularly~~loss ~~when~~or ~~taken~~spoilage ~~together~~(including ~~with~~due ~~our~~to ~~lack~~temperature ~~of earthquake insurance~~excursions), ~~could~~increased ~~have~~shipping aand ~~material adverse effect on our business.~~

Table of Co n t e n t s

handling costs, and delays in manufacturing, release or crucial business timelines, any of which could materially impact our sales, financial results, patient fulfillment efforts and reputation.

The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event, including because we may not have sufficient redundancies, alternative suppliers, alternative distribution channels, backup manufacturing capacity or additional inventory to mitigate the impact of such disruptions. We may incur substantial expenses in connection with responding to and recovering from these events, and any of the foregoing could have a material adverse effect on our business, operating results, prospects or financial condition.

Risks Related to Government Regulation

Current and future healthcare reform legislation, regulation or action by the current administration may increase the difficulty and cost for us to commercialize our approved products and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations.

In the U.S. and some foreign jurisdictions, there have been, and continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, restrict or regulate post approval activities with respect to our approved products and affect our ability to profitably sell our products.

In the U.S., the ACA was enacted in 2010 with a goal of reducing the cost of healthcare and substantially changing the way healthcare is financed by both government and private insurers. The ACA, among other things, increased the minimum Medicaid rebates owed by manufacturers under the MDRP, extended manufacturer rebate liability from fee-for-service Medicaid utilization to include the utilization of Medicaid managed care organizations and established annual fees and taxes on manufacturers of certain branded prescription drugs. Since its enactment, certain provisions of the ACA have been subject to judicial, executive, and legislative challenges. For example, on June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. There have also been ongoing changes to the implementation of the ACA since its adoption. For example, the availability of enhanced premium tax credits and other subsidies under the ACA expired as of December 31, 2025, and absent legislative action to reinstate or replace them, many individuals may experience higher out-of-pocket premium costs. These changes could result in an increase in uninsured or underinsured patients, which could negatively affect patients’ ability or willingness to start or continue treatment with our products or future product candidates, if successfully developed and approved, or may otherwise increase prescription abandonment rates or place greater downward pressure on drug pricing generally.

Moreover, on January 1, 2025, XPHOZAH, along with other oral drugs for ESRD patients on dialysis without injectable or intravenous equivalents, became part of the ESRD PPS and coverage under Medicare Part D was eliminated. See “—XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D; this resulted in a negative and material impact on our XPHOZAH revenue in 2025; and the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” above.

Other legislative changes have been proposed and adopted in the U.S. since the ACA was enacted. These laws, among other things, included aggregate reductions of Medicare payments to providers that will remain in effect through 2032, unless additional action is taken by Congress, additional specific reductions in Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and an increase in the statute of limitations period for the government to recover overpayments to providers from three to five years. The American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s AMP.

There has also been heightened governmental scrutiny over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed bills designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. In 2022, the IRA was signed into law in August 2022. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); redesigns the Medicare Part D benefit (beginning in 2024); and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025). CMS has published the negotiated prices for the initial ten drugs, which went into effect in January 2026, and the subsequent 15 drugs, which will first be effective in 2027. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges. While the impact of the IRA on us and the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.

Table of Co n t e n t s

The One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program. Such reductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect our sales of our partner’s products or of any product candidate that we commercialize.

The current administration is pursuing a two-fold strategy to reduce drug costs in the U.S. While it is unclear whether and how these proposals will be implemented, the current administration’s policies are likely to have a negative impact on the pharmaceutical industry and on our ability to receive adequate revenues for IBSRELA and XPHOZAH. On the one hand, President Trump has threatened to impose significant tariffs on pharmaceutical manufacturers that do not adopt pricing policies such as most favored nation pricing, which would tie the price for drugs in the U.S. to the lowest price in a group of other countries. In response, multiple manufacturers have reportedly entered into confidential pricing agreements with the federal government. On the other hand, the current administration is pursuing traditional regulatory pathways to impose drug pricing policies and published two proposed regulations in December 2025, referred to as GLOBE and GUARD. If finalized, these regulations would implement mandatory payment models under which manufacturers of eligible drugs would be required to pay rebates to the federal government on a portion of the units of their drugs that are reimbursed by Medicare, with the rebate amount based on most favored nation pricing. Imposing a rebate in the U.S. that is based on drug prices outside the U.S. would mark a drastic and unprecedented shift in the U.S. pharmaceutical market, and while the impact of the GLOBE and GUARD proposed regulations, if finalized, cannot yet be determined, it is likely to be significant. Even regulatory proposals or executive actions that are ultimately deemed unlawful could negatively impact the U.S. pharmaceutical sector and our business. In addition, pharmaceutical pricing and marketing has long been the subject of considerable discussion in Congress and among policymakers, and it is possible that Congress could enact additional laws that negatively affect the pharmaceutical industry.

We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect the demand for any drug products for which we may obtain regulatory approval, our ability to set a price that we believe is fair for our products, our ability to obtain coverage and reimbursement approval for a product, our ability to generate revenues and achieve or maintain profitability, and the level of taxes that we are required to pay.

Despite having received regulatory approval for IBSRELA and XPHOZAH, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense. Additionally, IBSRELA and XPHOZAH could be subject to other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

Even after a drug is approved by the ~~U.S.~~ FDA or foreign regulatory authorities, the manufacturing processes, labeling, packaging, distribution, pharmacovigilance, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and GCP regulations for any clinical trials that we conduct post-approval. As such, we and our third-party CMOs will be subject to continual review and periodic inspections to assess compliance with regulatory requirements. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control. Regulatory authorities may also impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-marketing studies. Furthermore, any new legislation addressing drug safety issues could result in delays or increased costs to assure compliance.

31We will also be required to report certain adverse reactions and production problems, if any, to the FDA, and to comply with requirements concerning advertising and promotion for our products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not promote our products for indications or uses for which they do not have FDA approval.

Table of Co n t e n t s

WeLater ~~will~~discovery ~~also~~of bepreviously ~~required~~unknown toproblems ~~report~~with ~~certain~~a ~~adverse~~product, ~~reactions~~including ~~and~~adverse ~~production~~events ~~problems,~~of ifunanticipated ~~any,~~severity toor ~~the U.S. FDA~~frequency, ~~and~~or ~~to comply~~ with ~~requirements concerning advertising and promotion for~~ our ~~products.~~third-party ~~Promotional~~manufacturers ~~communications~~or ~~with~~manufacturing ~~respect~~processes, toor ~~prescription~~failure ~~drugs are subject~~ to acomply ~~variety~~with ~~of legal and~~ regulatory, ~~restrictions~~agency ~~and~~or ~~must~~other berequirements, ~~consistent~~may ~~with~~result ~~the information~~ in ~~the product’s approved label. As such~~, weamong ~~may~~other ~~not promote our products for indications or uses for which they do not have U.S. FDA approval.~~things:

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

•warning or untitled letters or fines;

•restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls;

•injunctions or the imposition of civil or criminal penalties;

•suspension or revocation of existing regulatory approvals;

•suspension of any of our ongoing clinical trials;

•refusal to approve pending applications or supplements to approved applications submitted by us;

•restrictions on our or our CMOs’ operations; or

•product seizure or detention, or refusal to permit the import or export of products.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize IBSRELA and XPHOZAH. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.

In addition, the ~~U.S.~~ FDA’s policies may change, and additional government regulations may be enacted. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects and ability to achieve or sustain profitability.

We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the U.S. or abroad.

Disruptions at the ~~U.S.~~ FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise review and process regulatory submissions in a timely manner, which could negatively impact our business.

The ability of the ~~U.S.~~ FDA to review and process regulatory submissions can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, policy changes, and other events that may otherwise affect the ~~U.S.~~ FDA’s ability to perform routine functions. For example, over the last several years, the U.S. government has shut down several times, including the most recent U.S. government shutdown which began on October 1, 2025 and ended on November 12, 2025, and certain regulatory agencies, such as the ~~U.S.~~ FDA, have had to furlough ~~critical U.S.~~ FDA employees and ~~stop~~suspend ~~critical~~certain activities.

Disruptions at the ~~U.S.~~ FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. If a prolonged government shutdown occurs or continues, or if global health concerns prevent the ~~U.S.~~ FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the ~~U.S.~~ FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

3236

Table of Co n t e n t s

We and our CMOs are subject to significant regulation with respect to manufacturing IBSRELA and XPHOZAH. The manufacturing facilities on which we rely may not continue to meet regulatory requirements or may not be able to meet supply demands.

All entities involved in the preparation of product for commercial sale, or product candidates for clinical trials, including our existing CMOs, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in late-stage clinical studies must be manufactured in accordance with cGMP regulations. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our products or product candidates that may not be detectable in final product testing. We or our CMOs must supply all necessary documentation in support of an NDA or comparable regulatory filing on a timely basis and must adhere to cGMP regulations enforced by the ~~U.S.~~ FDA and other regulatory agencies through their facilities inspection programs. ~~The~~In addition, before approving an NDA, the facilities and quality systems of some, or all, of ~~our~~the relevant CMOs must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates. The FDA will not approve a product candidate unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the manufacture of our product or the associated quality systems for compliance with the regulations applicable to the activities being conducted. We enter into quality agreements with our CMOs, pursuant to which we expect our CMOs to comply with cGMPs and applicable regulatory requirements. Although we oversee the CMOs, we cannot control the manufacturing process of, and are completely dependent on, our CMOs for compliance with the regulatory requirements. If these facilities do not pass a pre-approval plant inspection, regulatory approval of the products may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever. In addition, we have no direct control over the ability of our CMOs to maintain adequate quality control, quality assurance and qualified personnel. If our CMOs cannot successfully manufacture material that conforms to our specifications and the strict requirements of relevant regulatory authorities, and pass regulatory inspections, on the timelines we expect or at all, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities with respect to our products, which could materially impact our ability to supply product and harm our business.

The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our CMOs. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time consuming for us or a third party to implement, and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent suspension of production or closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.

If we or any of our third-party manufacturers fail to maintain regulatory compliance, the ~~U.S.~~ FDA or other applicable regulatory authority can impose regulatory sanctions including, among other things, refusal to approve a pending application for a new drug product, withdrawal of an approval, or suspension of production. As a result, our business, financial condition, and results of operations may be materially harmed.

Additionally, if supply from one approved manufacturer is interrupted, an alternative manufacturer would need to be qualified through an NDA, a supplemental NDA or equivalent foreign regulatory filing, which could result in further delay. The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and ismay ~~likely to~~ result in adelays ~~delay~~to in our desired clinical and commercial timelines.

These factors could cause us to incur higher costs and could cause the delay or termination of clinical studies, regulatory submissions, required approvals, or commercialization of our product candidates. Furthermore, if our suppliers fail to meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical studies may be delayed, or we could lose potential revenue.

If we fail to comply or are found to have failed to comply with U.S. FDA and other regulations related to the promotion of our products for unapproved uses, other sales practices, as well as the design and implementation of our patient assistance programs, we could be subject to criminal penalties, substantial fines or other sanctions and damage awards.37

The regulations relating to the promotion of products for unapproved uses and the design and implementation of patient assistance programs are complex and subject to substantial interpretation by the U.S. FDA and other government agencies. With respect to the commercialization of IBSRELA and/or XPHOZAH, we will be restricted from marketing the product outside of its approved labeling, also referred to as off-label promotion. However, physicians may nevertheless prescribe an approved product to their patients in a manner that is inconsistent with the approved label, which is an off-label use. We have implemented compliance and training programs designed to ensure that our sales and marketing practices comply with applicable regulations regarding off-label promotion. Notwithstanding these programs, the U.S. FDA or other government agencies may allege or find that our practices constitute prohibited promotion of our product candidates for unapproved uses. We also cannot be sure that our employees will comply with company policies and applicable regulations regarding the promotion of products for unapproved uses.

Table of Co n t e n t s

~~Over~~If ~~the~~we ~~past~~fail ~~several~~to ~~years,~~comply aor ~~significant~~are ~~number~~found ofto ~~pharmaceutical and biotechnology companies~~ have ~~been~~failed ~~the~~to ~~target~~comply ofwith ~~inquiries~~FDA and ~~investigations~~other byregulations ~~various~~related ~~federal~~to ~~and state regulatory, investigative, prosecutorial and administrative entities in connection with~~ the promotion of our products for unapproved uses, other sales practices, as well as the design and implementation of our patient assistance programs, ~~including~~we ~~the~~could Department of Justice and various U.S. Attorneys’ Offices, the Office of Inspector General of the Department of Health and Human Services, the U.S. FDA, the FTC and various state Attorneys General offices. These investigations have alleged violations of various federal and state laws and regulations, including claims asserting antitrust violations, violations of the FFDCA, the False Claims Act, the Prescription Drug Marketing Act, anti-kickback laws, and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement. Many of these investigations originate as “qui tam” actions under the False Claims Act. Under the False Claims Act, any individual can bring a claim on behalf of the government alleging that a person or entity has presented a false claim, or caused a false claim to be ~~submitted,~~subject to ~~the~~criminal ~~government for payment. The person bringing a qui tam suit is entitled to a share of any recovery or settlement. Qui tam suits~~penalties, ~~also~~substantial ~~commonly~~fines ~~referred to as “whistleblower suits,” are often brought by current~~ or ~~former~~other ~~employees.~~sanctions ~~In a qui tam suit, the government must decide whether to intervene~~ and ~~prosecute~~damage ~~the case~~awards. ~~If it declines, the individual may pursue the case alone.~~

IfThe ~~the~~regulations ~~U.S.~~relating ~~FDA~~to orthe ~~any~~promotion ~~other~~of ~~governmental~~products ~~agency~~for ~~initiates~~unapproved anuses ~~enforcement~~and ~~action~~the ~~against~~design usand orimplementation ~~if we are the subject~~ of apatient ~~qui~~assistance ~~tam~~programs ~~suit~~are complex and itsubject isto ~~determined~~substantial ~~that~~interpretation weby ~~violated~~the ~~U.S.~~ FDA orand other ~~regulations~~government ~~relating~~agencies. With respect to the ~~promotion~~commercialization of ~~our~~IBSRELA ~~products~~ and/or ~~the~~XPHOZAH, ~~design~~we ~~and~~are ~~implementation~~restricted offrom ~~our~~marketing ~~patient~~the ~~assistance~~product ~~programs,~~outside weof ~~could~~its beapproved ~~subject~~labeling, also referred to ~~substantial~~as ~~civil~~off-label orpromotion. ~~criminal~~However, ~~fines~~physicians ormay ~~damage~~nevertheless ~~awards~~prescribe ~~and~~an ~~other~~approved ~~sanctions~~product ~~such~~to astheir ~~consent~~patients ~~decrees~~in ~~and~~a ~~corporate~~manner ~~integrity~~that ~~agreements~~is ~~pursuant~~inconsistent towith the approved label, which ~~our~~is ~~activities~~an ~~would~~off-label beuse. ~~subject~~We tohave ~~ongoing~~implemented ~~scrutiny~~compliance and ~~monitoring~~training programs designed to ensure ~~compliance~~that our sales and marketing practices comply with applicable ~~laws~~regulations ~~and~~regarding ~~regulations~~off-label promotion. ~~Any~~Notwithstanding ~~such~~these ~~fines~~programs, ~~awards~~the FDA or other ~~sanctions~~government ~~would~~agencies ~~have~~may anallege ~~adverse~~or ~~effect~~find onthat our ~~revenue,~~practices ~~business,~~constitute ~~financial~~prohibited ~~prospects~~promotion of our product candidates for unapproved uses. We also cannot be sure that our employees will comply with company policies and ~~reputation~~applicable regulations regarding the promotion of products for unapproved uses.

Over the past several years, a significant number of pharmaceutical and biotechnology companies have been the target of inquiries and investigations by various federal and state regulatory, investigative, prosecutorial and administrative entities in connection with the promotion of products for unapproved uses, other sales practices, as well as the design and implementation of patient assistance programs, including the Department of Justice and various U.S. Attorneys’ Offices, the Office of Inspector General of the Department of Health and Human Services, the FDA, the FTC and various state Attorneys General offices. These investigations have alleged violations of various federal and state laws and regulations, including claims asserting antitrust violations, violations of the FFDCA, the False Claims Act, the Prescription Drug Marketing Act, anti-kickback laws, and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement. Many of these investigations originate as “qui tam” actions under the False Claims Act. Under the False Claims Act, any individual can bring a claim on behalf of the government alleging that a person or entity has presented a false claim, or caused a false claim to be submitted, to the government for payment. The person bringing a qui tam suit is entitled to a share of any recovery or settlement. Qui tam suits, also commonly referred to as “whistleblower suits,” are often brought by current or former employees. In a qui tam suit, the government must decide whether to intervene and prosecute the case. If it declines, the individual may pursue the case alone.

If the FDA or any other governmental agency initiates an enforcement action against us or if we are the subject of a qui tam suit and it is determined that we violated FDA or other regulations relating to the promotion of our products and/or the design and implementation of our patient assistance programs, we could be subject to substantial civil or criminal fines or damage awards and other sanctions such as consent decrees and corporate integrity agreements pursuant to which our activities would be subject to ongoing scrutiny and monitoring to ensure compliance with applicable laws and regulations. Any such fines, awards or other sanctions would have an adverse effect on our revenue, business, financial prospects and reputation.

IBSRELA and/or XPHOZAH may cause or contribute to adverse medical events that we are required to report to regulatory agencies and if we fail to do so we could be subject to sanctions that would materially harm our business.

We are required to report certain information about adverse medical events if our products may have caused or contributed to those adverse events. The timing of our obligation to report is triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail to report adverse events we become aware of within the prescribed timeframe. We may also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to comply with our reporting obligations, the ~~U.S.~~ FDA or a foreign regulatory agency could take action, including criminal prosecution, the imposition of civil monetary penalties, seizure of our products or delay in approval or clearance of future products.

Our employees, independent contractors, principal investigators, CROs, collaboration partners, consultants, CMOs and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.38

We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, collaboration partners, consultants, CMOs and vendors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or unauthorized activities that violate any of the following: U.S. FDA regulations, including those laws that require the reporting of true, complete and accurate financial and other information to the U.S. FDA; manufacturing standards; or federal and state healthcare fraud and abuse laws and regulations. Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. These activities also include the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Table of Co n t e n t s

We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, collaboration partners, consultants, CMOs and vendors may engage in fraudulent conduct or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or unauthorized activities that violate any of the following: FDA regulations, including those laws that require the reporting of true, complete and accurate financial and other information to the FDA; manufacturing standards; or federal and state healthcare fraud and abuse laws and regulations. Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. These activities also include the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Failure to obtain regulatory approvals in foreign jurisdictions would prevent us from marketing our products internationally.

In order to market any product in the EEA (which is composed of the 27 Member States of the European Union plus Norway, Iceland and Liechtenstein), and many other foreign jurisdictions, separate regulatory approvals are required. In the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization. Before the Marketing Authorization is granted, the European Medicines Agency or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

The approval procedures vary among countries and can involve additional clinical testing, and the time required to obtain approval may differ from that required to obtain ~~U.S.~~ FDA approval. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the ~~U.S.~~ FDA does not ensure approval by regulatory authorities in other countries, and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in other foreign countries or by the ~~U.S.~~ FDA. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The foreign regulatory approval process may include all of the risks associated with obtaining ~~U.S.~~ FDA approval. We may not be able to file for regulatory approvals or to do so on a timely basis, and even if we do file, we may not receive necessary approvals to commercialize our products in any market.

We and our collaboration partners are subject to healthcare laws, regulation and enforcement; our failure or the failure of any such collaboration partners to comply with these laws could have a material adverse effect on our results of operations and financial conditions.

We and our collaboration partners are subject to additional healthcare statutory and regulatory requirements and enforcement by the federal government and the states and foreign governments in which we conduct our business. The laws that may affect our ability to operate as a commercial organization include:

•the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation;

•federal false claims laws, including the False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent. In addition, the government may assert that a claim including items or ~~services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;~~

Table of Co n t e n t s

services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

•the federal Civil Monetary Penalties law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

•federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation;

•the federal Physician Payments Sunshine Act requirements under the ACA, which requires manufacturers of drugs, devices, biologics, and medical supplies to report annually to CMS information related to payments and other transfers of value to physicians, (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anesthesiologist assistants and certified nurse midwives), and teaching hospitals, and ownership and investment interests held by physicians (as defined by the statute) and their immediate family members;

•state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers;

•state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

Table of Contents

•state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or pricing information and marketing expenditures; and

•European and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to healthcare providers.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to market our products and adversely impact our financial results.

Legislative or regulatory healthcare reforms in the U.S. may make it more difficult and costly for us to obtain regulatory clearance or approval of our product candidates and to produce, market and distribute our products after clearance or approval is obtained.

From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory clearance or approval, manufacture, and marketing of regulated products or the reimbursement thereof. In addition, ~~U.S.~~ FDA regulations and guidance are often revised or reinterpreted by the ~~U.S.~~ FDA in ways that may significantly affect our business and our products. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of our product candidates. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future. Such changes could, among other things, require:

•additional clinical trials to be conducted prior to obtaining approval;

•changes to manufacturing methods;

•recall, replacement, or discontinuance of one or more of our products; and

•additional record keeping.

Each of these would likely entail substantial time and cost and could materially harm our business and our financial results. In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any future products would harm our business, financial condition and results of operations.40

In addition, the full impact of recent healthcare reform and other changes in the healthcare industry and in healthcare spending is currently unknown, and may adversely affect our business model. In the U.S., the ACA was enacted in 2010 with a goal of reducing the cost of healthcare and substantially changing the way healthcare is financed by both government and private insurers. Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. The ACA, among other things, increased the minimum Medicaid rebates owed by manufacturers under the MDRP and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program, which was replaced by a new manufacturer discount program on January 1, 2025 (as discussed below), in which manufacturers were required to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Moreover, beginning January 1, 2025, XPHOZAH, along with other oral ESRD related drugs without injectable or intravenous equivalents, are now included in the ESRD PPS, thereby eliminating coverage under Medicare Part D as of such date. See “—XPHOZAH is now included in the ESRD PPS, effective January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D, and as a result the revenue that we may generate on sales of XPHOZAH will be negatively and materially impacted” above.

Table of Co n t e n t s

~~Other~~Each ~~legislative~~of ~~changes~~these ~~have~~would ~~been~~likely ~~proposed~~entail ~~and~~substantial ~~adopted~~time inand ~~the~~cost ~~U.S.~~and ~~since~~could ~~the~~materially ~~ACA~~harm ~~was~~our ~~enacted.~~business ~~These~~and ~~new~~our ~~laws,~~financial ~~among~~results. ~~other~~In ~~things~~addition, ~~included~~delays ~~aggregate reductions of Medicare payments to providers that will remain~~ in ~~effect~~receipt ~~through 2032, with the exception~~ of aor ~~temporary~~failure ~~suspension from May 1, 2020 through March 31, 2022, unless additional action is taken by Congress, additional specific reductions in Medicare payments~~ to ~~several~~receive ~~types~~regulatory ofclearances ~~providers,~~or ~~including~~approvals ~~hospitals, imaging centers and cancer treatment centers, and an increase in the statute of limitations period~~ for ~~the~~any ~~government~~future toproducts ~~recover~~would ~~overpayments~~harm toour ~~providers from three to five years. More recently~~business, onfinancial ~~March~~condition ~~11,~~and ~~2021,~~results ~~President Biden signed the American Rescue Plan Act~~ of ~~2021 into law, which eliminated the statutory Medicaid drug rebate cap beginning January 1, 2024~~operations. ~~The rebate was previously capped at 100% of a drug’s AMP.~~

Recently, there has also been heightened governmental scrutiny over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed bills designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. On August 16, 2022, the IRA was signed into law. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare which will start to take effect in 2026, imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (which began on January 1, 2025). Under the IRA, small molecule drugs and biologics first become eligible for price negotiation seven and eleven years, respectively, after U.S. FDA approval. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and the list of the subsequent 15 drugs that will be subject to negotiation. Each year thereafter, more Part B and Part D products will become subject to the HHS price negotiation program, although the program is currently subject to legal challenges. While the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant. Additionally, individual states have become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and to encourage importation from other countries and bulk purchasing.

If we fail to comply with our reporting and payment obligations under the MDRP or other governmental pricing programs in the U.S., we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, results of operations and financial condition.

We participate in the MDRP and other federal and state government pricing programs in the U.S., and we may participate in additional government pricing programs in the future. These programs generally require manufacturers to pay rebates or otherwise provide discounts to government payors in connection with drugs that are dispensed to beneficiaries of these programs. Medicaid drug rebates are based on pricing data that we ~~will~~are be obligated to report on a monthly and quarterly basis to CMS, the federal agency that administers the MDRP and Medicare programs. For the MDRP, these data include the AMP and the best price for each drug. If we become aware that our MDRP price reporting submission for a prior period was incorrect or has changed as a result of recalculation of the pricing data, we must resubmit the corrected data for up to three years after those data originally were due. In addition, there is increased focus by the Office of Inspector General within ~~the~~HHS ~~U.S. Department of Health and Human Services~~ on the methodologies used by manufacturers to calculate AMP, and best price, to assess manufacturer compliance with MDRP reporting requirements. If we fail to provide information timely or are found to have knowingly submitted false information to the government, we may be subject to civil monetary penalties and other sanctions, including termination from the MDRP, which would result in payment not being available for our covered drugs under Medicaid and Medicare Part B. Failure to make necessary disclosures and/or to identify overpayments could result in allegations against us under the Federal False Claims Act and other laws and regulations.

~~Federal~~The ~~law~~IRA ~~requires~~imposes ~~that~~rebates aunder ~~manufacturer~~Medicare ~~that~~Part ~~participates~~B inand ~~the~~Medicare ~~MDRP~~Part ~~also~~D ~~participate~~that inare ~~the~~triggered ~~340B~~by ~~program~~price inincreases ~~order~~that ~~for~~outpace ~~federal~~inflation ~~funds~~(first todue bein ~~available~~2023), ~~for~~as ~~the~~described ~~manufacturer’s drugs~~ under ~~Medicaid.~~“—Current Weand ~~participate~~future inhealthcare ~~the~~reform ~~340B program~~legislation, ~~which~~regulation isor ~~administered~~action by the ~~HRSA,~~current ~~and~~administration ~~requires~~may usincrease ~~to charge statutorily defined covered entities no more than~~ the ~~340B~~difficulty ~~“ceiling~~and ~~price”~~cost for ~~our~~us ~~covered~~to ~~drugs.~~commercialize ~~These~~our ~~340B~~approved ~~covered~~products ~~entities include a variety of community health clinics~~ and ~~other~~may ~~entities~~adversely ~~that~~affect ~~receive~~the ~~health~~prices ~~services~~we, ~~grants~~or ~~from~~they, ~~the~~may ~~Public~~obtain ~~Health~~and ~~Service,~~may ashave ~~well~~a asnegative ~~hospitals~~impact ~~that~~on ~~serve~~our abusiness ~~disproportionate~~and ~~share~~results of ~~low-income patients~~operations.” The ~~340B~~Medicare ~~ceiling~~Part ~~price~~D isrebate, ~~calculated~~if ~~using a statutory formula~~applicable, ~~which~~will isbe ~~based~~calculated on the ~~AMP~~basis ~~and~~of ~~rebate amount for~~ the ~~covered~~AMP ~~drug~~figures aswe ~~calculated~~report ~~under~~pursuant to the MDRP. ~~In general, products subject to Medicaid price reporting and rebate liability are~~

37Federal law requires that a manufacturer that participates in the MDRP also participate in the 340B program in order for federal funds to be available for the manufacturer’s covered outpatient drugs under Medicaid and Medicare Part B. We participate in the 340B program, which is administered by HRSA, and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered outpatient drugs. These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients. The 340B ceiling price is calculated using a statutory formula, which is based on the AMP and rebate amount for the covered outpatient drug as calculated under the MDRP. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. We are obligated to report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes them to 340B covered entities. HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B-eligible drugs. HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.

In order to be eligible to have drug products paid for with federal funds under Medicaid and Medicare Part B and purchased by certain federal agencies and grantees, we also participate in the U.S. VA/FSS pricing program. Under the VA/FSS program, we are obligated to report the Non-FAMP for our covered drugs to the VA and charge certain federal agencies no more than the Federal Ceiling Price (FCP), which is calculated based on Non-FAMP using a statutory formula. These four agencies are the VA, the U.S. Department of Defense, the U.S. Coast Guard and the U.S. Public Health Service (including the Indian Health Service).

We also participate in the Tricare Retail Pharmacy program, under which we are required to pay quarterly rebates on utilization of innovator products that are dispensed through the Tricare Retail Pharmacy network to Tricare beneficiaries. The rebates are calculated as the difference between the annual Non-FAMP and FCP. We are required to list our innovator products on a Tricare Agreement in order for them to be eligible for DOD formulary inclusion. If we overcharge the government in connection with our FSS contract or Tricare Agreement, whether due to a misstated FCP or otherwise, we are required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges could result in allegations against us under the False Claims Act and other laws and regulations. If we fail to provide timely information or are found to have knowingly submitted false information, we may be subject to civil monetary penalties.

Table of Co n t e n t s

also subject to the 340B ceiling price calculation and discount requirement. We are obligated to report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes them to 340B covered entities. HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B-eligible drugs. HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.

In order to be eligible to have drug products paid for with federal funds under Medicaid and purchased by certain federal agencies and grantees, we also participate in the U.S. VA/FSS pricing program. Under the VA/FSS program, we are obligated to report the Non-FAMP for our covered drugs to the VA and charge certain federal agencies no more than the Federal Ceiling Price, which is calculated based on Non-FAMP using a statutory formula. These four agencies are the VA, the U.S. Department of Defense, the U.S. Coast Guard and the U.S. Public Health Service (including the Indian Health Service). We are also required to pay rebates on products purchased by military personnel and dependents through the TRICARE retail pharmacy program. If we fail to provide timely information or are found to have knowingly submitted false information, we may be subject to civil monetary penalties.

Individual states continue to consider and have enacted legislation to limit the growth of healthcare costs, including the cost of prescription drugs and combination products. A number of states have either implemented or are considering implementation of drug price transparency legislation that may prevent or limit our ability to take price increases at certain rates or frequencies. Requirements under such laws include advance notice of planned price increases, reporting price increase amounts and factors considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies, and new product notice and reporting. Such legislation could limit the price or payment for IBSRELA and, if launched, XPHOZAH, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers who fail to comply with drug price transparency requirements, including the untimely, inaccurate, or incomplete reporting of drug pricing information. If we are found to have violated state law requirements, we may become subject to penalties or other enforcement mechanisms, which could have a material adverse effect on our business.

Pricing and rebate calculations are complex, vary among products and programs, and are often subject to interpretation by us, governmental or regulatory agencies, and the courts. The terms, scope and complexity of these government pricing programs change frequently, as do interpretations of applicable requirements for pricing and rebate calculations. Responding to current and future changes may increase our costs and the complexity of compliance will be time consuming. Any required refunds to the U.S. government or responding to a government investigation or enforcement action would be expensive and time consuming and could have a material adverse effect on our business, results of operations and financial condition. Price recalculations under the MDRP also may affect the ceiling price at which we are required to offer products under the 340B program. Civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price. In the event that CMS were to terminate our Medicaid rebate agreement, no federal payments would be available under Medicaid or Medicare for IBSRELA or, if launched, XPHOZAH. We cannot offer any assurances that our submissions will not be found to be incomplete or incorrect.

Risks Related to Intellectual Property

Our success will depend on our ability to obtain, maintain and protect our intellectual property rights.

Our success and ability to compete depend in part on our ability to obtain, maintain and enforce issued patents, trademarks and other intellectual property rights and proprietary technology in the U.S. and elsewhere. If we cannot adequately obtain, maintain and enforce our intellectual property rights and proprietary technology, competitors may be able to use our technologies or the goodwill we have acquired in the marketplace and erode or negate any competitive advantage we may have and our ability to compete, which could harm our business and ability to achieve profitability and/or cause us to incur significant expenses.

We rely on a combination of contractual provisions, confidentiality procedures and patent, trademark, copyright, trade secret and other intellectual property laws to protect the proprietary aspects of our products, product candidates, brands, technologies, trade secrets, know-how and data. These legal measures afford only limited protection, and competitors or others may gain access to or use our intellectual property rights and proprietary information. Our success will depend, in part, on preserving our trade secrets, maintaining the security of our data and know-how and obtaining, maintaining and enforcing other intellectual property rights. We may not be able to obtain, maintain and/or enforce our intellectual property or other proprietary rights necessary to our business or in a form that provides us with a competitive advantage.

38Failure to obtain, maintain and/or enforce intellectual property rights necessary to our business and failure to protect, monitor and control the use of our intellectual property rights could negatively impact our ability to compete and cause us to incur significant expenses. The intellectual property laws and other statutory and contractual arrangements in the U.S. and other jurisdictions we depend upon may not provide sufficient protection in the future to prevent the infringement, use, violation, or misappropriation of our patents, trademarks, data, technology, and other intellectual property rights and products by others, and may not provide an adequate remedy if our intellectual property rights are infringed, misappropriated, or otherwise violated by others.

Table of Co n t e n t s

~~Failure~~and toother ~~obtain,~~jurisdictions ~~maintain~~are ~~and/or~~typically ~~enforce~~not ~~intellectual~~published ~~property~~until ~~rights~~18 ~~necessary~~months toafter ~~our~~filing, ~~business~~or ~~and~~in ~~failure~~some tocases ~~protect~~not at all. Therefore, ~~monitor~~we ~~and~~cannot ~~control~~be certain that we were the ~~use~~first ofto ~~our~~make ~~intellectual~~the ~~property~~inventions ~~rights~~claimed ~~could~~in ~~negatively~~any ~~impact~~of our ~~ability~~patents toor ~~compete~~pending ~~and~~patent ~~cause~~applications, usor that we were the first to ~~incur~~file ~~significant~~for ~~expenses~~patent protection of such inventions. ~~The~~Moreover, ~~intellectual~~should ~~property~~we ~~laws~~become ~~and~~a ~~other~~licensee ~~statutory~~of ~~and~~a ~~contractual~~third ~~arrangements~~party’s inpatents or patent applications, depending on the ~~U.S.~~terms ~~and~~of ~~other~~any ~~jurisdictions~~future wein-licenses ~~depend~~to ~~upon~~which we may ~~not~~become ~~provide~~a ~~sufficient~~party, ~~protection~~we inmay not have the ~~future~~right to ~~prevent~~control the ~~infringement~~preparation, ~~use,~~filing ~~violation~~and prosecution of patent applications, or ~~misappropriation~~to ofmaintain ~~our~~or ~~patents,~~enforce ~~trademarks,~~the ~~data~~patents, covering technology in-licensed from third parties. Therefore, these patents and ~~other~~patent ~~intellectual~~applications ~~property~~may ~~rights~~not be prosecuted, maintained and/or ~~products~~enforced byin ~~others;~~a ~~and~~manner ~~may~~consistent ~~not~~with ~~provide~~the anbest ~~adequate~~interests ~~remedy~~of ifour business. Any of these outcomes could impair our ~~intellectual~~ability ~~property~~to ~~rights~~prevent ~~are~~competition ~~infringed,~~from ~~misappropriated~~third parties, orwhich ~~otherwise~~may ~~violated~~have byan ~~others~~adverse impact on our business.

We rely in part on our portfolio of issued and pending patent applications in the U.S. and other countries to protect our intellectual property and competitive position. However, it is also possible that we may fail to identify patentable aspects of inventions made in the course of our development, manufacture and commercialization activities before it is too late to obtain patent protection on them. If we fail to timely file for patent protection in any jurisdiction, we may be precluded from doing so at a later date. Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, suppliers, consultants, advisors, and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. Furthermore, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in any of our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. Moreover, should we become a licensee of a third party’s patents or patent applications, depending on the terms of any future in-licenses to which we may become a party, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain or enforce the patents, covering technology in-licensed from third parties. Therefore, these patents and patent applications may not be prosecuted, maintained and/or enforced in a manner consistent with the best interests of our business. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

The patent positions of companies, including our patent position, may involve complex legal and factual questions that have been the subject of much litigation in recent years, and, therefore, the scope of any patent claims that we have or may obtain cannot be predicted with certainty. Accordingly, we cannot provide any assurances about which of our patent applications will issue, the breadth of any resulting patent, whether any of the issued patents will be found to be infringed, invalid or unenforceable or will be threatened or challenged by third parties, that any of our issued patents have, or that any of our currently pending or future patent applications that mature into issued patents will include, claims with a scope sufficient to protect our products and services. Our pending and future patent applications may not result in the issuance of patents or, if issued, may not issue in a form that will be advantageous to us. The coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. We cannot offer any assurances that the breadth of our granted patents will be sufficient to stop a competitor from developing, manufacturing and commercializing a product or technologies in a non-infringing manner that would be competitive with one or more of our products or technologies, or otherwise provide us with any competitive advantage. Furthermore, any successful challenge to these patents or any other patents owned by or licensed to us after patent issuance could deprive us of rights necessary for our commercial success. Further, there can be no assurance that we will have adequate resources to enforce our patents.

Patents have a limited lifespan. In the U.S., the natural expiration of a utility patent is generally 20 years from the earliest effective non-provisional filing date. Though an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products or services. Patents, if issued, may be challenged, deemed unenforceable, invalidated, narrowed or circumvented. Proceedings challenging our patents or patent applications could result in either loss of the patent, or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. Any successful challenge to our patents and patent applications could deprive us of exclusive rights necessary for our commercial success. In addition, defending such challenges in such proceedings may be costly. Thus, any patents that we may own may not provide the anticipated level of, or any, protection against competitors. Furthermore, an adverse decision may result in a third party receiving a patent right sought by us, which in turn could affect our ability to develop, manufacture or commercialize our products or technologies.

Some of our patents and patent applications may in the future be co-owned with third parties. If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products, services and technology. In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us.

In addition, the U.S. federal government retains certain rights in inventions produced with its financial assistance under the Patent and Trademark Law Amendments Act (Bayh-Dole Act). The federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit. The Bayh-Dole Act also provides federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself. If we choose to collaborate with academic institutions to accelerate our preclinical research or development, we cannot be sure that any co-developed intellectual property will be free from government rights pursuant to the Bayh-Dole Act. If, in the future, we co-own or license in technology which is critical to our business that is developed in whole or in part with federal funds subject to the Bayh-Dole Act, our ability to enforce or otherwise exploit patents covering such technology may be adversely affected.

The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that:

Table of Contents

•Any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products or product candidates;

•Any of our pending patent applications will issue as patents;

•We were the first to make the inventions covered by each of our patents and pending patent applications;

Table of Co n t e n t s

•We were the first to file patent applications for these inventions;

•Others will not develop, manufacture and/or commercialize similar or alternative products or technologies that do not infringe our patents;

•Any of our challenged patents will ultimately be found to be valid and enforceable;

•Any patents issued to us will provide a basis for an exclusive market for our commercially viable products or technologies will provide us with any competitive advantages or will not be challenged by third parties;

•We will develop additional proprietary technologies or products that are separately patentable; or

•Our commercial activities or products will not infringe upon the patents of others.

We may become subject to third-party claims alleging infringement, misappropriation or violation of such third parties’ patents or other intellectual property rights and/or third-party claims seeking to invalidate our patents, which would be costly, time consuming and, if successfully asserted against us, delay or prevent the development, manufacture or commercialization of our products or product candidates.

Our commercial success depends, in part, on our ability to develop, manufacture or commercialize our products and product candidates without infringing, misappropriating or otherwise violating the intellectual property rights of third parties. There have been many lawsuits and other proceedings asserting infringement or misappropriation of patents and other intellectual property rights in the pharmaceutical and biotechnology industries, and companies in the industry have used intellectual property litigation to gain a competitive advantage. While we take steps to ensure that we do not infringe upon, misappropriate or otherwise violate the intellectual property rights of others, there can be no assurances that we will not be subject to claims alleging that the manufacture, use or sale of IBSRELA or XPHOZAH or of any other product candidates infringes existing or future third-party patents, or that such claims, if any, will not be successful. Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, and because pending patent claims can be revised before issuance, there may be applications now pending which may later result in issued patents that may be infringed by the manufacture, use or sale of IBSRELA or XPHOZAH or other product candidates. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may thus have no deterrent effect. We may be unaware of one or more issued patents that would be infringed by the manufacture, sale or use of IBSRELA or XPHOZAH or our other product candidates.

Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights. These proceedings could cause us to pay substantial damages, including treble damages and attorney’s fees if we are found to be willfully infringing a third party’s patents. We may be required to indemnify future collaboration partners against such claims. We are not aware of any threatened or pending claims related to these matters, but in the future, litigation may be necessary to defend against such claims. If a patent infringement suit were brought against us, we could be forced to stop or delay development, manufacturing or sales of the product or product candidate that is the subject of the suit. As a result of patent infringement claims, or in order to avoid potential claims, we may choose to seek, or be required to seek, a license from the third party and would most likely be required to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we were able to obtain a license, we may be unable to maintain such licenses and the rights may be nonexclusive, which would give our competitors access to the same intellectual property. Ultimately, we could be prevented from commercializing a product, or forced to redesign it if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms, or unable to maintain such licenses when granted. Even if we are successful in defending against such claims, such litigation can be expensive and time consuming to litigate and would divert management’s attention from our core business. Any of these events could harm our business significantly.

40We also could be ordered to pay substantial damages, including treble damages and attorney’s fees if we are found to be willfully infringing a third party’s patents or other intellectual property right. Even if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid and enforceable, and infringed by the use of our products and/or technologies, which could have a negative impact on the commercial success of our current and any future products or technologies. If we were to challenge the validity of any such third-party U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S. patent. We will have similar burdens to overcome in foreign courts in order to successfully challenge a third-party claim of patent infringement. Even if we are successful in defending against such claims, such litigation can be expensive and time consuming to litigate and would divert management’s attention from our core business. Any of these events could harm our business significantly.

Table of Co n t e n t s

WeIn addition to infringement claims against us, third parties may also ~~could~~raise besimilar ~~ordered~~claims tobefore ~~pay~~administrative ~~substantial~~bodies ~~damages,~~in ~~including~~the ~~treble~~U.S. ~~damages~~or ~~and~~abroad. ~~attorney’s~~Such ~~fees~~mechanisms ifinclude wereexamination, ~~are~~post ~~found~~grant toreview, beinter ~~willfully~~partes ~~infringing~~review, aderivation ~~third~~or ~~party’s~~opposition ~~patents~~proceedings before the USPTO or other jurisdictional body relating to our intellectual property ~~right.~~rights ~~Even~~or ifthe weintellectual ~~believe~~property ~~such~~rights ~~claims~~of ~~are~~others. ~~without~~If ~~merit,~~third aparties ~~court~~prepare ofand ~~competent~~file ~~jurisdiction~~patent ~~could~~applications ~~hold~~in the U.S. that ~~these~~also ~~third~~claim ~~party~~technology ~~patents~~similar ~~are~~or ~~valid~~identical ~~and~~to ~~enforceable~~ours, ~~and~~we ~~infringed~~may byhave ~~the~~to ~~use~~participate ofin ~~our~~interference ~~products and/~~or ~~technologies,~~derivation proceedings in the USPTO to determine which ~~could~~party ~~have~~is aentitled ~~negative~~to ~~impact~~a patent on the ~~commercial~~disputed ~~success~~invention. ofWe ~~our~~may ~~current~~also ~~and~~become ~~any~~involved ~~future~~in ~~products~~similar opposition proceedings in the European Patent Office or ~~technologies.~~similar Ifoffices wein ~~were~~other tojurisdictions ~~challenge~~regarding ~~the~~our ~~validity~~intellectual ofproperty ~~any~~rights ~~such~~with ~~third~~respect ~~party~~to ~~U.S.~~our ~~patent~~products inand ~~federal~~technology. ~~court,~~Since wepatent ~~would~~applications ~~need~~are toconfidential ~~overcome~~for a ~~presumption~~period of ~~validity.~~time Asafter ~~this~~filing, ~~burden~~we iscannot abe ~~high~~certain ~~one~~that ~~requiring~~we uswere tothe ~~present~~first ~~clear~~to ~~and~~file ~~convincing~~any ~~evidence~~patent asapplication related to ~~the~~our ~~invalidity~~product ofcandidates. ~~any~~Such ~~such~~administrative ~~U.S.~~proceedings ~~patent~~could ~~claim,~~result ~~there~~in isrevocation noof ~~assurance~~or ~~that~~amendment ato ~~court~~our ofpatents ~~competent~~in ~~jurisdiction~~such ~~would~~a ~~invalidate~~way ~~the~~that ~~claims~~they ofno ~~any~~longer ~~such~~cover ~~U.S.~~our ~~patent.~~products Weor ~~will~~product ~~have~~candidates. ~~similar~~With ~~burdens~~respect to ~~overcome~~the invalidity ~~foreign~~question, ~~courts~~for inexample, ~~order~~we tocannot ~~successfully~~be ~~challenge~~certain athat ~~third~~there ~~party~~is ~~claim~~no invalidating prior art, of which we, our patent ~~infringement.~~counsel, ~~Even~~and ifthe wepatent ~~are~~examiner ~~successful~~were inunaware ~~defending~~during ~~against~~prosecution. ~~such~~If ~~claims,~~a ~~such~~third ~~litigation~~party ~~can~~were beto ~~expensive~~prevail on a legal assertion of invalidity and/or ~~time~~unenforceability, ~~consuming~~we tomay ~~litigate~~lose at least part, and ~~would~~perhaps ~~divert~~all, ~~management’s~~of ~~attention~~the ~~from~~patent protection on our ~~core~~products ~~business~~or technologies. ~~Any~~Such a loss of ~~these~~patent ~~events~~protection ~~could~~would ~~harm~~have a material adverse impact on our business, ~~significantly~~financial condition, results of operations and prospects.

In addition to infringement claims against us, third parties may also raise similar claims before administrative bodies in the U.S. or abroad. Such mechanisms include reexamination, post grant review, inter parties review, derivation or opposition proceedings before the USPTO or other jurisdictional body relating to our intellectual property rights or the intellectual property rights of others. If third parties prepare and file patent applications in the U.S. that also claim technology similar or identical to ours, we may have to participate in interference or derivation proceedings in the USPTO to determine which party is entitled to a patent on the disputed invention. We may also become involved in similar opposition proceedings in the European Patent Office or similar offices in other jurisdictions regarding our intellectual property rights with respect to our products and technology. Since patent applications are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our product candidates. Such administrative proceedings could result in revocation of or amendment to our patents in such a way that they no longer cover our products or product candidates. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel, and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion of invalidity and/or unenforceability, we may lose at least part, and perhaps all, of the patent protection on our products or technologies. Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations and prospects.

If we are not able to successfully enforce our intellectual property rights, the commercial value of IBSRELA and XPHOZAH or other product candidates may be adversely affected and we may not be able to compete effectively in our market.

The enforceability of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions, the answers to which can be uncertain. The patent applications that we own or license may fail to result in issued patents in the U.S. or in foreign countries. Additionally, our research and development efforts may result in product candidates for which patent protection is limited or not available. Even if patents do issue, third parties may challenge the validity, enforceability, scope or infringement thereof, which may result in such patents being narrowed, invalidated, held unenforceable or not infringed. For example, U.S. patents can be challenged by any person before the new USPTO Patent Trial and ~~Appeals~~Appeal Board at any time before one year after that person is served an infringement complaint based on the patents. Patents granted by the European Patent Office may be similarly opposed by any person within nine months from the publication of the grant. Similar proceedings are available in other jurisdictions, and in the U.S., Europe and other jurisdictions, third parties can raise questions of validity with a patent office even before a patent has granted. Furthermore, even if unchallenged, our patents and patent applications may not prevent others from designing around our patent claims. For example, a third party may develop a competitive product that provides therapeutic benefits similar to one or more of our product candidates but has a sufficiently different composition to fall outside the scope of our patent protection. If the breadth or strength of protection provided by the patents and patent applications we hold or pursue with respect to IBSRELA and XPHOZAH or any future product candidates is successfully challenged, then our ability to commercialize such product could be negatively affected, and we may face unexpected competition that could have a material adverse impact on our business.

Even where laws provide intellectual property and/or regulatory protection, costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and the outcome of such litigation would be uncertain. If we or one of our collaboration partners were to initiate legal proceedings against a third party to enforce a patent covering a product or product candidate, the defendant could counterclaim that our patent is invalid, unenforceable and/or not infringed. In patent litigation in the U.S. and other jurisdictions, defendant counterclaims alleging invalidity, unenforceability and/or noninfringement are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including novelty, nonobviousness and enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity, unenforceability and noninfringement is unpredictable. With respect to validity, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity, unenforceability or non-infringement of our intellectual property related to a product or a product candidate, we could lose part, and possibly all, of the patent protection on such product or product candidate. Such a loss of patent protection could have a material adverse impact on our business. Moreover, our competitors could counterclaim that we infringe their intellectual property and may attempt to prevent us from commercializing a product.

41Although the composition and use of IBSRELA and XPHOZAH are currently claimed by seven issued patents each that are listed in the FDA’s Orange Book, we cannot assure that we will be successful in defending against third parties asserting that any of our patents are invalid, unenforceable or not infringed by the third parties’ products, or in competing against third parties seeking to introduce generic versions of IBSRELA, XPHOZAH or any of our future products.

In the U.S., the Hatch-Waxman Act provides non-patent regulatory exclusivity for five years from the date of the first FDA approval of a drug containing an NCE. The FDA is prohibited during those five years from approving an ANDA or 505(b)(2)

Table of Co n t e n t s

~~invalidity~~NDA that references the NDA that has been granted NCE exclusivity. However, ~~unenforceability~~if orany ~~non-infringement~~patents ofare ~~our~~listed ~~intellectual~~in ~~property~~the ~~related~~FDA toOrange Book for such NCE-containing drug, a follow-on product manufacturer may file an ANDA or a505(b)(2) ~~product~~NDA ~~candidate,~~that wereferences ~~could~~an ~~lose~~NDA ~~part,~~product ~~and~~with ~~possibly~~granted ~~all,~~NCE ofexclusivity after four years from the ~~patent~~first ~~protection~~NDA onapproval ~~such~~date ~~product~~provided orit ~~product~~is ~~candidate.~~accompanied ~~Such~~by a ~~loss~~Paragraph ofIV certification asserting that each Orange Book listed patent ~~protection~~is ~~could~~invalid, ~~have~~unenforceable, aor ~~material~~that ~~adverse~~the ~~impact~~generic onproduct ~~our~~does ~~business~~not infringe the Orange Book listed patents. ~~Moreover~~The Hatch-Waxman Act does not prevent a third party from filing, ~~our~~or ~~competitors~~the ~~could~~FDA ~~counterclaim~~from ~~that~~approving, weanother ~~infringe~~full ~~their~~505(b)(1) ~~intellectual~~NDA ~~property~~for an already-approved drug where the third party has conducted its own pre-clinical and ~~may~~clinical ~~attempt~~trials to ~~prevent~~independently usdemonstrate ~~from~~safety ~~commercializing~~and aeffectiveness ~~product~~without reliance on the original NDA data.

~~Although~~In ~~the~~cases ~~composition~~where ~~and~~NCE ~~use~~exclusivity has been granted for an NDA, as in the case of IBSRELA ~~are~~and ~~currently~~XPHOZAH, ~~claimed~~if byan ~~four~~ANDA or 505(4b)(2) ~~issued~~sponsor ~~patents~~has ~~that~~provided ~~are~~a ~~listed~~Paragraph IV certification to the FDA when filing its application, the sponsor must also send a notice thereof to the NCE NDA owner. The NCE NDA owner may then initiate a patent infringement lawsuit in response to the UParagraph IV certification.S. ~~FDA~~The filing of a patent infringement lawsuit within 45 days after the NCE NDA owner’s ~~Orange~~receipt ~~Book,~~of wea ~~cannot~~notice ~~assure~~of ~~that~~the weParagraph ~~will~~IV becertification ~~successful~~automatically inprevents ~~defending~~the ~~against~~FDA ~~third~~from ~~parties~~approving ~~asserting~~the ~~that~~ANDA ~~any~~or 505(b)(2) NDA until the earlier of ~~our~~30 ~~patents~~months ~~are~~after ~~invalid~~the NCE NDA owner’s receipt of the Paragraph IV certification notice, ~~unenforceable~~a orfinal ~~not~~decision ~~infringed~~in bythe infringement case in favor of the ~~third~~ANDA ~~parties’~~or ~~products~~505(b)(2) sponsor, or inanother ~~competing~~date ~~against~~established ~~third~~by ~~parties~~the ~~seeking~~court. toThere ~~introduce~~can ~~generic~~be ~~versions~~no ofassurances that an ANDA or 505(b)(2) NDA that references our IBSRELA or ~~any~~XPHOZAH ofNDAs and includes a Paragraph IV certification will not be filed, or that we will be successful in enforcing our ~~future~~Orange ~~products~~Book listed patents against such follow-on product sponsor.

In the U.S., the Hatch-Waxman Act provides non-patent regulatory exclusivity for five years from the date of the first U.S. FDA approval of a drug containing an NCE. The U.S. FDA is prohibited during those five years from approving an ANDA that references the NDA that has been granted NCE exclusivity. However, if any patents are listed in the U.S. FDA Orange Book for such NCE-containing drug, a generic manufacturer may file an ANDA that references a NDA product with granted NCE exclusivity after four years from the first NDA approval date provided it is accompanied by a Paragraph IV certification asserting that each Orange Book listed patent is invalid, unenforceable, or that the generic product does not infringe the Orange Book listed patents. The Hatch-Waxman Act does not prevent a third party from filing, or the U.S. FDA from approving, another full NDA (i.e., not an ANDA) for an already-approved drug where the third party has conducted its own pre-clinical and clinical trials to independently demonstrate safety and effectiveness without reliance on the original NDA data.

In cases where NCE exclusivity has been granted for an NDA, as in the case of IBSRELA, if an ANDA sponsor has provided a Paragraph IV certification to the U.S. FDA when filing an ANDA, the ANDA sponsor must also send a notice thereof to the NCE NDA owner. The NCE NDA owner may then initiate a patent infringement lawsuit in response to the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the NCE NDA owner’s receipt of a notice of the Paragraph IV certification automatically prevents the U.S. FDA from approving the ANDA until the earlier of 30 months after the NCE NDA owner’s receipt of the Paragraph IV certification notice or a final decision in the infringement case in favor of the ANDA sponsor. There can be no assurances that an ANDA that references our IBSRELA NDA and includes a Paragraph IV certification will not be filed, or that we will be successful in enforcing our Orange Book listed patents against such ANDA sponsor.

We also rely on trade secret protection and confidentiality agreements to protect proprietary know-how that may not be patentable, processes for which patents may be difficult to obtain and/or enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Although we require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology, to assign their inventions to us, and endeavor to execute confidentiality agreements with all such parties, we cannot be certain that we have executed such agreements with all parties who may have helped to develop our intellectual property or who had access to our proprietary information, nor can we be certain that our agreements will not be breached by such consultants, advisors or third parties, or by our former employees. The breach of such agreements by individuals or entities who were actively involved in the discovery and design of our products or potential drug candidates, or in the development of our discovery and design platform could require us to pursue legal action to protect our trade secrets and confidential information, which could be expensive, and the outcome of which would be unpredictable. If we are not successful in prohibiting the continued breach of such agreements, our business could be negatively impacted. We cannot guarantee that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.

Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the U.S. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the U.S. and abroad. If we are unable to prevent material disclosure of the intellectual property related to our technologies to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.

Table of Contents

Although we have obtained patent term extension in the U.S. under the Hatch-Waxman Act, extending the term of exclusivity for tenapanor, if we do not obtain patent term extension in foreign countries under similar legislation, our business may be materially harmed. Furthermore, we have obtained patent term adjustment in the U.S. under the American Inventors Protection Act extending the patent term for certain patents covering tenapanor.

U.S. Patent No. 8,541,448 covering tenapanor was subject to patent term adjustment under the American Inventors Protection Act for delays by the USPTO in granting the patent. Additionally, following the approval by the ~~U.S.~~ FDA for our NDA to market tenapanor for IBS-C, this patent was granted patent term extension under the Hatch-Waxman Act and together with patent term adjustment provides us with exclusivity for tenapanor and uses thereof until August 1, 2033. The Hatch-Waxman Act allows a maximum of one patent to be extended per ~~U.S.~~ FDA approved product. Extension and/or adjustment of patent term (collectively, Patent Restoration) also may be available in certain foreign countries upon regulatory approval of our product candidates. Despite seeking Patent Restoration for tenapanor in all countries where it is available, it may not be granted in any foreign country because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the term of patent protection subject to Patent Restoration, as well as the scope of patent protection during any such Patent Restoration, afforded by the governmental authority could be less than we request or could change due to changes to applicable Patent Restoration laws or regulations or interpretations thereof.

Table of Co n t e n t s

If we are unable to obtain Patent Term Restoration in any particular country, or the term of any such extension is less than we request, or is changed due to changes in applicable laws or regulations or interpretations thereof, the period during which we will have exclusive rights to our product in such country could be shortened and our competitors may obtain approval of competing products following our non-extended/adjusted patent expiration, and our revenue could be reduced, possibly materially.

The USPTO and various foreign patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions to maintain patent applications and issued patents. Noncompliance with these requirements can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. There could also be delays at the USPTO caused by staffing cuts and other U.S. government actions as a result of the U.S. Department of Government Efficiency or other executive actions to reduce the size of the U.S. government. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.

We may not be able to enforce our intellectual property rights throughout the world.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the U.S. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to life sciences. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.

Europe’s new Unified Patent Court may, in particular, present uncertainties for our ability to protect and enforce our patent rights against competitors in Europe. In 2012, the EU Patent Package regulations were passed with the goal of providing a single pan-European Unitary Patent and a new UPC, for litigation involving European patents. Implementation of the EU Patent Package entered into force on June 1, 2023. Under the UPC, all European patents, including those issued prior to ratification of the EU Patent Package, will by default automatically fall under the jurisdiction of the UPC. The UPC will provide our competitors with a new forum to centrally revoke our European patents and allow for the possibility of a competitor to obtain pan-European injunctions. It will be several years before we will understand the scope of patent rights that will be recognized and the strength of patent remedies that will be provided by the UPC. Under the EU Patent Package as currently proposed, we will have the right to opt our patents out of the UPC over the first seven years of the court’s existence, but doing so may preclude us from realizing the benefits of the new unified court.

Table of Contents

In addition, geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors. For example, the United States and foreign government actions related to Russia’s conflict in Ukraine may limit or prevent filing, prosecution, and maintenance of patent applications in Russia. Government actions may also prevent maintenance of issued patents in Russia. These actions could result in abandonment or lapse of our patents or patent applications, resulting in partial or complete loss of patent rights in Russia. In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees from the United States without consent or compensation. Consequently, we would not be able to prevent third parties from practicing our inventions in Russia or from selling or importing products made using our inventions in and into Russia. Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the U.S. and foreign countries may affect our ability to obtain and enforce adequate intellectual property protection for our technology.

If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business would be harmed.

We consider proprietary trade secrets, confidential know-how and unpatented know-how to be important to our business. We seek to protect our confidential proprietary information, in part, by entering into confidentiality agreements and invention assignment agreements with parties who have access to them, including our employees, consultants, scientific advisors, contractors, CROs, contract manufacturers, collaborators and other third parties, that are designed to protect our proprietary information. However, we cannot be certain that such agreements have been entered into with all relevant parties that may have or have had access to our trade secrets or proprietary technology, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets and other confidential proprietary technology, or independently develop substantially equivalent information and techniques. For example, any of these parties with whom we have entered into such confidentiality or invention assignment agreements may breach the agreements and disclose our proprietary information, including trade secrets, and we may not be able to obtain adequate remedies for such breaches. We also seek to preserve the integrity and confidentiality of our confidential proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know, whether the steps we have taken to protect our intellectual property will be effective.

Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. We may not be able to obtain adequate remedies in the event of such unauthorized use. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Trade secrets will also over time be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic institutions to industry scientific positions. Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets and proprietary information, our agreements may contain certain limited publication rights. In addition, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are incorporated (inadvertently or not) into the technology of others, or are disclosed or used in violation of these agreements. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of such information may be greatly reduced and our competitive position, business, financial condition, results of operations and prospects would be harmed.47

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Table of Co n t e n t s

~~preserve~~confidential ~~our~~proprietary ~~rights~~information towill ~~these~~not ~~trademarks~~be ~~and~~disclosed ~~trade names~~ or ~~may~~that becompetitors ~~forced~~will tonot ~~stop~~otherwise ~~using~~gain ~~those~~access ~~names,~~to ~~which~~our wetrade ~~need~~secrets toand ~~build~~other ~~name~~confidential ~~recognition~~proprietary ~~among~~technology, ~~potential collaborators~~ or ~~customers~~independently indevelop ~~our~~substantially ~~markets~~equivalent ofinformation ~~interest~~and techniques. AtFor ~~times~~example, ~~competitors~~any ~~may~~of ~~adopt~~these ~~trade~~parties ~~names~~with orwhom ~~trademarks~~we ~~similar~~have toentered ~~ours,~~into ~~thereby~~such ~~impeding~~confidentiality ~~our~~or ~~ability~~invention toassignment ~~build~~agreements ~~brand~~may ~~identity~~breach the agreements and ~~possibly~~disclose ~~leading~~our toproprietary ~~market~~information, ~~confusion.~~including Intrade ~~addition~~secrets, ~~there~~and ~~could~~we bemay ~~potential~~not ~~trade~~be ~~name~~able orto ~~trademark~~obtain ~~infringement~~adequate ~~claims~~remedies ~~brought~~for bysuch ~~owners~~breaches. ofWe ~~other~~also ~~trademarks~~seek orto ~~trademarks~~preserve ~~that~~the ~~incorporate~~integrity ~~variations~~and confidentiality of our ~~registered~~confidential orproprietary ~~unregistered~~information ~~trademarks~~by ormaintaining ~~trade~~physical ~~names.~~security Ifof weour ~~assert~~premises ~~trademark~~and ~~infringement~~physical ~~claims,~~and aelectronic ~~court~~security ~~may~~of ~~determine~~our ~~that~~information ~~the~~technology ~~marks~~systems, webut ~~have~~it ~~asserted~~is ~~are~~possible ~~invalid~~that orthese ~~unenforceable,~~security ormeasures ~~that~~could ~~the~~be ~~party~~breached. ~~against~~Monitoring ~~whom~~unauthorized weuses ~~have~~and ~~asserted~~disclosures ~~trademark~~of ~~infringement~~our ~~has~~intellectual ~~superior~~property ~~rights~~is todifficult, ~~the~~and ~~marks~~we indo ~~question.~~not Inknow ~~this~~whether ~~case,~~the steps we ~~could~~have ~~ultimately~~taken beto ~~forced~~protect toour ~~cease~~intellectual ~~use~~property ofwill ~~such~~be ~~trademarks~~effective.

Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. We may not be able to obtain adequate remedies in the event of such unauthorized use. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Trade secrets will also over time be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic institutions to industry scientific positions. Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets and proprietary information, our agreements may contain certain limited publication rights. In addition, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are incorporated (inadvertently or not) into the technology of others, or are disclosed or used in violation of these agreements. We may need to share our proprietary information, including trade secrets, with our current and future business partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors. If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of such information may be greatly reduced and our competitive position, business, financial condition, results of operations and prospects would be harmed.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our current or future registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or descriptive, cancelled or determined to be infringing on other marks. We may not be able to protect or preserve our rights to these trademarks and trade names or may be forced to stop using those names, which we need to build name recognition among potential collaborators or customers in our markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. If we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.

During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions. Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. We may license our trademarks and trade names to third parties, such as distributors. Although these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our competitive position, business, financial condition, results of operations and prospects.

Moreover, any name we have proposed to use with our product candidates in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. Similar requirements exist in Europe. The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.

Table of Co n t e n t s

The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names. If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark.

We may be subject to claims that we or our employees have misappropriated the intellectual property, including know-how or trade secrets, of a third party, or claiming ownership of what we regard as our own intellectual property.

Many of our employees, consultants and contractors were previously employed at or engaged by other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Some of these employees, consultants and contractors, executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment. Although we try to ensure that our employees, consultants and contractors do not use the intellectual property and other proprietary information or know-how or trade secrets of others in their work for us, and do not perform work for us that is in conflict with their obligations to another employer or any other entity, we may be subject to claims that we or these employees, consultants and contractors have used or disclosed such intellectual property, including know-how, trade secrets or other proprietary information. In addition, an employee, advisor or consultant who performs work for us may have obligations to a third party that are in conflict with their obligations to us, and as a result, such third party may claim an ownership interest in the intellectual property arising out of work performed for us. We are not aware of any threatened or pending claims related to these matters, but in the future, litigation may be necessary to defend against such claims. If we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, or access to consultants and contractors. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while we typically require our employees, consultants and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own, which may result in claims by or against us related to the ownership of such intellectual property. If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our management and scientific personnel.

Table of Contents

Risks Related to Our Common Stock

Our stock price may continue to be volatile and our stockholders may not be able to resell shares of our common stock at or above the price they paid.

The trading price of our common stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include those discussed in this “Risk Factors” section and others such as:

•the success or lack of success with regards to our commercialization of IBSRELA and XPHOZAH;

•results of regulatory inspections of our facilities or those of our CMOs, or specific label restrictions or patient populations for XPHOZAH’s use, or changes or delays in the regulatory review process;

~~•announcements regarding coverage and reimbursement for XPHOZAH alone or with other oral ESRD related drugs without injectable or intravenous equivalents;~~49

Table of Co n t e n t s

•announcements regarding coverage and reimbursement for XPHOZAH alone or with other oral ESRD-related drugs without injectable or intravenous equivalents;

•announcements regarding the results of clinical trials we may run evaluating tenapanor for CIC; RDX10531 or any other product candidates;

•announcements relating to our current or future collaboration partnerships;

•announcements of therapeutic innovations or new products or strategic transactions by us or our competitors;

•adverse actions taken by regulatory agencies with respect to our product label, our clinical trials, manufacturing supply chain or sales and marketing activities;

•changes or developments in laws or regulations applicable to our approved products or our product candidates;

•~~the~~failure ~~success~~to meet any of our ~~testing~~projected timelines or goals with regard to the commercialization of IBSRELA and XPHOZAH, or the clinical ~~trials~~development and commercialization of any of our product candidates;

•failure to meet any of our projected timelines or goals with regard to the commercialization of IBSRELA and XPOHZAH, or the clinical development and commercialization of any of our product candidates;

•the success of our efforts to acquire or license or discover additional product candidates;

•any intellectual property infringement actions in which we may become involved;

•the success of our efforts to obtain adequate intellectual property protection for our products and product candidates;

•announcements concerning our competitors or the pharmaceutical industry in general;

•achievement of expected product sales and profitability;

•manufacture, supply or distribution shortages;

•actual or anticipated fluctuations in our operating results;

•~~U.S.~~ FDA or other U.S. or foreign regulatory actions affecting us or our industry or other healthcare reform measures in the U.S.;

•changes in financial estimates or recommendations by securities analysts;

•trading volume of our common stock;

•sales of our common stock by us, our executive officers and directors or our stockholders in the future;

•sales of debt securities and sales or licensing of assets;

•general economic and market conditions and overall fluctuations in the U.S. equity markets; and

•the loss of any of our key scientific or management personnel.

In addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular, have experienced extreme volatility that may have been unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business, which could seriously harm our financial position. Any adverse determination in litigation could also subject us to significant liabilities.

Table of Contents

lawsuit and the attention of our management would be diverted from the operation of our business, which could seriously harm our financial position. Any adverse determination in litigation could also subject us to significant liabilities.

If we sell shares of our common stock in future financings, stockholders may experience immediate dilution and, as a result, our stock price may decline.

We may from time to time issue additional shares of common stock at a discount from the current trading price of our common stock. As a result, our stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such discount. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. If we issue common stock or securities convertible into common stock, our common stockholders will experience additional dilution and, as a result, our stock price may decline.

We are no longer a “smaller reporting company” and as a result we are or will be subject to certain enhanced disclosure requirements which will require us to incur significant expenses and expend time and resources.50

WeTable are no longer a “smaller reporting company,” and, as a result, we are or will be required to comply with various disclosure and compliance requirements that did not previously apply to us. Compliance with these additional requirements increases our legal and financial compliance costs and causes management and other personnel to divert attention from operational and other business matters to these additional public company reporting requirements. In addition, if we are not able to comply with changing requirements in a timely manner, the market price of our stock could decline and we could be subject to delisting proceedings by the Nasdaq Global Market, or sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.Contents

General Risk Factors

We incur significant costs as a result of operating as a public company, and our management ~~will~~devotes ~~devote~~ substantial time to new compliance initiatives. We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, which could result in sanctions or other penalties that would harm our business.

We incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under the ~~Securities~~ Exchange Act ~~of 1934, as amended (Exchange Act)~~ and regulations regarding corporate governance practices. The listing requirements of The Nasdaq Global Market require that we satisfy certain corporate governance requirements relating to director independence, distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel ~~will~~ need to devote a substantial amount of time to ensure that we comply with all of these requirements. ~~Moreover, the reporting requirements, rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly.~~ Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

We are subject to Section 404 of The Sarbanes-Oxley Act of 2002 (Section 404) and the related rules of the SEC, which generally require, among other things, our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. Our compliance with Section 404 requires that we incur substantial expense and expend significant management efforts.

During the course of our review and testing of our internal controls, we may identify deficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we have a material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from The Nasdaq Global Market or other adverse consequences that would materially harm our business.

Table of Contents

We may be adversely affected by the global economic environment.

Our ability to attract and retain collaboration partners or customers, invest in and grow our business and meet our financial obligations depends on our operating and financial performance, which, in turn, is subject to numerous factors, including the prevailing economic conditions and financial, business and other factors beyond our control, such as the rate of unemployment, the number of uninsured persons in the U.S., presidential elections, other political influences and inflationary pressures. Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including the current inflationary environment and rising interest rates. Adverse developments that affect financial institutions, transactional counterparties, or other third parties, or concerns or rumors about these events, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, which appointed the U.S. Federal Deposit Insurance Corporation as receiver. Similarly, other institutions have been and may continue to be swept into receivership. We currently have no borrowing or deposit exposure to directly impacted institutions and have not experienced an adverse impact to our liquidity or to our business operations, financial condition, or results of operations as a result of these recent events. However, uncertainty may remain over liquidity concerns in the broader financial services industry, and there may be unpredictable impacts to our business and our industry. We cannot anticipate all the ways in which the global economic climate and global financial market conditions could adversely impact our business in the future.

We are exposed to risks associated with reduced profitability and the potential financial instability of our collaboration partners or customers, many of which may be adversely affected by volatile conditions in the financial markets. For example, unemployment and underemployment, and the resultant loss of insurance, may decrease the demand for healthcare services and pharmaceuticals. If fewer patients are seeking medical care because they do not have insurance coverage, our collaboration partners or customers may experience reductions in revenues, profitability and/or cash flow that could lead them to reduce their support of our programs or financing activities. If collaboration partners or customers are not successful in generating sufficient revenue or are precluded from securing financing, they may not be able to pay, or may delay payment of, accounts receivable that are owed to us. In addition, volatility in the financial markets could cause significant fluctuations in the interest rate and currency markets. We currently do not hedge for these risks. The foregoing events, in turn, could adversely affect our financial condition and liquidity. In addition, if economic challenges in the U.S. result in widespread and prolonged unemployment, either regionally or on a national basis, or if certain provisions of the Patient Protection and ACA, as amended by the Health Care and Education Reconciliation Act, collectively known as the ACA, are repealed, a substantial number of people may become uninsured or underinsured. To the extent economic challenges result in fewer individuals pursuing or being able to afford our product candidates once commercialized, our business, results of operations, financial condition and cash flows could be adversely affected.

Table of Co n t e n t s

Care and Education Reconciliation Act, collectively known as the ACA, are repealed, a substantial number of people may become uninsured or underinsured. To the extent economic challenges result in fewer individuals pursuing or being able to afford our product candidates once commercialized, our business, results of operations, financial condition and cash flows could be adversely affected.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the value of our shares to a potential acquirer or delay or prevent changes in control or changes in our management without the consent of our board of directors. The provisions in our charter documents include the following:

•a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

•no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

•the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

•the required approval of at least two-thirds of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause;

•the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

•the ability of our board of directors to alter our bylaws without obtaining stockholder approval;

Table of Contents

•the required approval of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors;

•a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

•the requirement that a special meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officer, the president or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

•advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.

In addition, these provisions would apply even if we were to receive an offer that some stockholders may consider beneficial.

We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law. Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction.

Table of Co n t e n t s

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that:

•We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such a person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.

•We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.

•We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.

•We will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnities, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification.

•The rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons.

•We may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.

Table of Contents

We do not currently intend to pay dividends on our common stock, and, consequently, our stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock.

We do not currently intend to pay any cash dividends on our common stock for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our future business opportunities. Additionally, the terms of our 2022 Loan Agreement could restrict our ability to pay dividends. Therefore, our stockholders are not likely to receive any dividends on our common stock for the foreseeable future. Since we do not intend to pay dividends, our stockholders’ ability to receive a return on their investment will depend on any future appreciation in the market value of our common stock. There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Cybersecurity Risk Management and Strategy

We ~~have~~maintain ~~developed~~a ~~and~~comprehensive ~~implemented~~cybersecurity arisk ~~cybersecurity~~management program ~~intended~~designed to ~~manage risk, and~~ protect the confidentiality, integrity, and availability of our ~~critical~~ systems and information.

We design, assess and benchmark our program based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework. This does not imply that we meet any particular technical standards, specifications or requirements, only that we use NIST as a guide to help us identify, assess and manage cybersecurity risks relevant to our business.

Our cybersecurity risk management program is integrated into our overall ~~enterprise~~ risk management program, and shares common methodologies, reporting channels and governance processes that apply across the ~~enterprise~~ risk management program, in areas such as legal, compliance, strategic, operational and financial risk.

Table of Co n t e n t s

Key elements of our cybersecurity program include but are not limited to the following:

•risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information;

•a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls and (3) our response to cybersecurity incidents;

•the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;

•cybersecurity awareness training of our employees, including incident response personnel and senior management;

•a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and

•a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile, suppliers and vendors that have access to our critical systems and information based on our assessment of their criticality to our operations and respective risk profile.

We have not ~~identified~~experienced ~~risks from known cybersecurity threats, including as a result of~~ any ~~prior~~ cybersecurity incidents, that have materially affected ~~us, including~~ our operations, business strategy, ~~results~~financial ofcondition ~~operations,~~ or ~~financial~~results ~~condition~~of operations. We face risks from cybersecurity threats that, if realized are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition. For more information, see the section titled “Risk Factors— We and our collaborators, CROs and other contractors and consultants depend on information technology systems, and any failure of these systems could harm our business. Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, results of operations and financial condition.”

Cybersecurity Governance

Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit and Compliance Committee (Audit Committee) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program, maintains a strategic role in coordinating cyber risk initiatives and policies, and confirming their efficacy.

50The Audit Committee receives annual reports from management on our cybersecurity posture. In addition, management updates the Committee where it deems appropriate regarding any cybersecurity incidents it considers to be significant or potentially significant.

The Audit Committee reports to the full board of directors regarding its activities, including those related to cybersecurity. The board of directors also receives periodic briefings from management on our cybersecurity program. The board members receive presentations on cybersecurity topics from our Chief Information Officer, internal security personnel or external experts as part of the board of directors’ continuing education on topics that impact public companies.

Our cybersecurity risk management program operates through a structured governance framework with oversight at multiple organizational levels. The IT Steering Committee, comprised of our Chief Information Officer, Chief Financial Officer and other members of management, meets quarterly to provide strategic oversight on technology investments, risk management and cybersecurity initiatives. The Audit Committee maintains independent oversight through quarterly reviews of security maturity, incidents and strategic investments. Ongoing governance includes monthly executive dashboards, Sarbanes-Oxley IT controls monitoring and annual security tabletop exercises. Our Chief Information Officer leads the program day-to-day, supervising internal cybersecurity personnel and external consultants, supported by cross-functional leadership with decades of combined experience in cybersecurity and risk management across commercial biotechnology organizations. Our Chief Information Officer has over 25 years of experience in overseeing cybersecurity and risk management.

Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us and alerts and reports produced by security tools deployed in our IT environment.

Table of Co n t e n t s

The Committee receives annual reports from management on our cybersecurity posture. In addition, management updates the Committee where it deems appropriate regarding any cybersecurity incidents it considers to be significant or potentially significant.

The Committee reports to the full board of directors regarding its activities, including those related to cybersecurity. The board of directors also receives periodic briefings from management on our cybersecurity program. The board members receive presentations on cybersecurity topics from our Chief Information Officer, internal security staff or external experts as part of the board of directors’ continuing education on topics that impact public companies.

Our Chief Information Officer has over 20 years of experience in overseeing cybersecurity and risk management. In addition, our Chief Legal and Administrative Officer has over 25 years of risk management experience and our Chief Financial and Operations Officer has over 20 years of experience in overseeing risk management and cybersecurity. This team is responsible for assessing and managing our material risks from cybersecurity threats and has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team’s experience includes experience running cybersecurity programs at similarly situated commercial biotechnology organizations and navigating the associated risk landscape.

ITEM 2. PROPERTIES

We do not own any real estate or other physical properties materially important to our operations. Our Waltham, Massachusetts headquarters is leased for ~~three~~four suites, ~~two~~all of which expire onin July ~~31, 2026, and one expires on April 30, 2027~~2029. In addition, we have lease agreements to lease office ~~space~~spaces ~~and/or laboratory space~~ in ~~Fremont, California,~~ Milwaukee, Wisconsin and Newark, California which expire in ~~March 2025,~~ February 2029 and May 2028, respectively.

ITEM 3. LEGAL PROCEEDINGS

See information under the “Legal Proceedings and Claims” caption in Note 19. Commitments ~~And~~and Contingencies which we incorporated here by reference.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

5155

Table of Co n t e n t s

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~Common~~Market ~~Stock~~and Stockholder Information

Our common stock trades on The Nasdaq Global Market under the symbol “ARDX.” As of December 31, ~~2024~~2025, there were 2423 holders of record of our common stock.

Dividends

We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the growth and development of our business.

Securities Authorized for Issuance under Equity Compensation Plans

The information required by this item regarding executive compensation will be incorporated by reference to the information set forth in the sections titled “Executive Compensation” in our Proxy Statement.

Recent Sales of Unregistered Securities

None.

Use of Proceeds

Not applicable.

Issuer Purchases of Equity Securities

Not applicable.

Stock Performance Graph

The following performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our future filings under the Securities Act of 1933, as amended, or the Securities Act, or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

The graph below compares the cumulative total stockholder return on our common stock from December 31, 2020 to the end of fiscal year 2025 with the cumulative total return of (i) the Nasdaq Composite Index and (ii) the Nasdaq Biotechnology Index. The graph assumes an initial investment value of $100 on December 31, 2020 and reinvestment of dividends.

Table of Co n t e n t s

Value of $100 invested on December 31, 2020 in stock or index, including reinvestment of dividends, for fiscal years ended December 31:


	2020		2021		2022		2023		2024		2025
Ardelyx, Inc.	$	100.00	$	17.00	$	44.05	$	95.83	$	78.36	$	90.11
Nasdaq Composite Index	$	100.00	$	121.39	$	81.21	$	116.47	$	149.83	$	180.33
Nasdaq Biotechnology Index	$	100.00	$	99.37	$	88.53	$	91.84	$	90.58	$	119.92

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our financial statements and related notes included elsewhere in this report. This discussion and other parts of this report contain forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report ~~entitled~~titled “Risk Factors.” These forward-looking statements speak only as of the date hereof. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason. Unless the context requires otherwise, the terms “Ardelyx,” “weCompany,” “uswe,” “~~our~~us” and “~~the Company~~our” refer to Ardelyx, Inc.

EXECUTIVE SUMMARY AND FINANCIAL HIGHLIGHTS

We are a commercial-stage biopharmaceutical company ~~founded~~focused ~~with~~on athe ~~mission~~development ~~to discover, develop~~ and ~~commercialize~~commercialization of innovative, ~~first-in-class~~ medicines that meet significant unmet medical needs. We ~~developed~~currently amarket ~~unique~~two ~~and~~therapies ~~innovative~~from ~~platform that enabled~~ the ~~discovery~~active ofingredient ~~new~~tenapanor, ~~biological~~an ~~mechanisms~~NHE3 ~~and~~inhibitor ~~pathways to develop potent and efficacious therapies~~ that ~~minimize~~was ~~the~~discovered ~~side effects~~ and ~~drug-drug~~developed ~~interactions~~by ~~frequently~~Ardelyx. ~~encountered~~NHE3 ~~with~~is ~~traditional,~~an ~~systemically~~antiporter ~~absorbed~~expressed ~~medicines.~~on ~~The~~the ~~first~~apical ~~molecule~~surface weof ~~discovered~~the small and ~~developed~~large ~~was~~intestines. ~~tenapanor,~~Tenapanor is a minimally absorbed, first-in-class, oral, small molecule therapy. Tenapanor, branded as IBSRELA®, is approved in the U.S. for the treatment of adults with IBS-C. Tenapanor, branded as XPHOZAH®, is approved in the U.S. to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

52Tenapanor, branded as IBSRELA®, is approved in the U.S. for the treatment of adults with irritable bowel syndrome with constipation. We believe that IBSRELA can bring meaningful benefit to the approximately 13 million Americans who suffer from the symptoms of IBS-C, many of whom continue to experience symptoms despite intervention with other therapies. We are seeking to further expand the IBSRELA eligible patient population to include patients with CIC, and have initiated a Phase 3 clinical trial evaluating tenapanor in adult CIC patients.

In addition to commercializing IBSRELA and XPHOZAH, we are also developing a next-generation NHE3 inhibitor that we believe can have application across multiple therapeutic areas.

Refer to the Summary of Abbreviated Terms at the end of this Annual Report on Form 10-K for definitions of terms used throughout the document.

We are committed to our mission of developing and commercializing innovative medicines that address unmet patient needs. Our principal strategy is to continue our commercial momentum with our current products while advancing and expanding a portfolio of important medicines for patients with unmet medical needs.

Our priorities include (i) driving significant IBSRELA growth, (ii) maintaining XPHOZAH commercial momentum, (iii) further advancing our pipeline and portfolio and (iv) maintaining a solid financial foundation to support our future growth.

Table of Co n t e n t s

In February 2025, we announced the NDA approval by China’s Center for Drug Evaluation of the NMPA for tenapanor in the control of serum phosphorus in adult patients with CKD on hemodialysis. This approval triggered a $5.0 million milestone to us under the terms of the Fosun Agreement, which was recorded as licensing revenue on our statements of operations and comprehensive loss when earned during the 2025 first quarter and was received in April 2025.

As of the end of the 2025 second quarter, we had fully recognized the maximum $75.0 million royalty obligation, which had been fully remitted as of the end of the 2025 third quarter under the AstraZeneca Termination Agreement.

On June 30, 2025, we entered into an amendment to our 2022 Loan Agreement (the Fifth Amendment), by and among the Company, as borrower, SLR, as collateral agent and the lenders party thereto. The Fifth Amendment, among other things, (i) provided for the immediate draw of $50.0 million of the Term E Loan on the closing date of the Fifth Amendment; and (ii) provides us with the option to draw an additional $100.0 million of committed senior secured term loans, consisting of the Term F Loan and the Term G Loan, each in the amount of $50.0 million. The Term F Loan and the Term G Loan may be drawn at the Company’s election by June 30, 2026 and December 20, 2026, respectively.

The 2023 Open Market Sales Agreement with Jefferies with respect to an “at-the-market offering” program which was established under the Company’s prior shelf registration statement on Form S-3 expired in January 2026. In November 2025, we filed an automatic shelf registration statement on Form S-3ASR, along with a prospectus supplement relating to the offering and sale of up to $100.0 million of our common stock pursuant to the 2025 Open Market Sales Agreement with Jefferies, deemed to be “at-the-market offerings.” During the year ended December 31, 2025, we did not sell any shares under the 2023 or 2025 Open Market Sales Agreements.

On January 22, 2026, we received an Issue Notification from the USPTO indicating the issuance of U.S. Patent No. 12,539,299. The patent relates to the formulation of tenapanor and covers the commercial formulations of IBSRELA and XPHOZAH and has an expiration date of November 26, 2042.

Below is a summary of our product sales, net by product for the years ended December 31 and total cash, cash equivalents and short-term investments as of December 31:

(in thousands)	2025		2024		~~2024~~		~~2023~~
IBSRELA product sales, net	$	274,207	$	158,286	$	~~158,286~~	$	~~80,062~~
XPHOZAH product sales, net	103,601		160,910		~~160,910~~		~~2,464~~
Total product sales, net	$	377,808	$	319,196	$	~~319,196~~	$	~~82,526~~
Cash, cash equivalents and short-term investments	$	264,689	$	250,100	$	~~250,100~~	$	~~184,299~~

IBSRELA and XPHOZAH product sales have continually grown since their respective commercial launches. IBSRELA net sales growth was attributed to patient demand for this first-in-class therapy as well as increased product awareness achieved through the IBSRELA field-based team. XPHOZAH’s commercial launch has been met with a strong response from the prescribing community and net sales continued to increase during 2024, the first full year of commercialization. As of January 1, 2025, we no longer receive reimbursement for XPHOZAH from Medicare Part D following the decision by the Centers of Medicare and Medicaid Services to eliminate Medicare Part D reimbursement to transition oral only therapies, including XPHOZAH, into the End Stage Renal Disease Prospective Payment System. Patient access to XPHOZAH remains through a prescription written by a qualifying healthcare provider through our ArdelyxAssist specialty pharmacy partner. Patients who do not have affordable access will be evaluated for eligibility to receive XPHOZAH fulfilled by our Ardelyx patient assistance program.

The increase in our cash, cash equivalents and short-term investment was attributed to higher product sales, net and incremental borrowings. During 2024, we amended the 2022 Loan Agreement with SLR and drew an additional $100.0 million in debt as discussed in Note 9. Borrowing. We expect that we will increasingly rely on cash generated from operations to fund our operating plan. We believe our existing cash, cash equivalents and short-term investments, and cash generated from operations will be sufficient to satisfy our anticipated cash needs for operations for at least the next few years. Our access to additional capital, including our ability to source cash from future equity sales and debt financing, provides us financial flexibility to execute our principal strategy as discussed below.

Strategy

We are committed to our mission of discovering, developing and commercializing first-in-class medicines that address unmet patient needs. Our principal strategy is to maintain our commercial momentum with our current products while identifying additional assets that leverage our core capabilities, including clinical, developmental and regulatory expertise and commercial excellence while maintaining a solid financial foundation, to support our future growth.

Our priorities include: (i) accelerating IBSRELA growth momentum; (ii) executing our XPHOZAH strategy to grow utilization; (iii) building a pipeline focused on areas of unmet patient need; and (iv) continuing to deliver strong commercial and financial performance.

RECENT ACCOUNTING PRONOUNCEMENTS

A summary of recent accounting pronouncements that we have adopted or ~~may~~ expect to adopt is included in Note 2. Summary Ofof Significant Accounting Policies in the notes to our financial statements, included in Part II, Item 8, of this Annual Report on Form 10-K.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A detailed discussion of our significant accounting policies can be found in Note 2. Summary Ofof Significant Accounting Policies, in the notes to our financial statements, included in Part II, Item 8, of this Annual Report on Form 10-K. The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses. Our critical accounting policies are those that significantly affect our financial condition and results of operations and require the most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain.

While we believe that our estimates, assumptions and judgments are reasonable, they are based on information available when the estimate or assumption was made. Actual results may differ significantly. Additionally, changes in our assumptions, estimates or assessments due to unforeseen events or otherwise could have a material impact on our financial position or results of operations.58

Table of Co n t e n t s

our financial condition and results of operations and require the most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain.

While we believe that our estimates, assumptions and judgments are reasonable, they are based on information presently available. Actual results may differ significantly from these estimates due to changes in judgments, assumptions or conditions as a result of unforeseen events or otherwise, which could have a material impact on our financial position and results of operations.

Revenue Recognition

The application of ASC 606 Revenue from Contracts with Customers substantially impacts our reported results, particularly product sales, net, which requires certain estimates in determining the transaction price. Total revenues are recognized following a five-step model: (i) identify the customer contract;, (ii) identify the contract’s performance obligations;, (iii) determine the transaction price;, (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when or as a performance obligation is satisfied.

Product Sales, Net

~~GTN~~Product ~~adjustments~~revenue ~~are~~is ~~primarily~~recognized awhen ~~function~~Customers take control of ~~sales~~the ~~volume~~product, ~~payor~~which ~~mix,~~typically ~~contractual~~occurs orupon ~~legislative~~delivery ~~discounts~~to ~~and~~the ~~rebates~~Customers. The transaction price for product sales, ~~net~~ is reduced for estimates of variable consideration related to ~~GTN~~(i) ~~adjustments for~~ discounts and chargebacks, (ii) rebates, wholesaler and GPO fees, and (iii) copay assistance and returns (collectively, gross-to-net adjustments or GTN adjustments). Except for certain wholesaler and GPO fees and discounts, which are based on contracts, ~~these~~our estimates of GTN adjustments involve ~~estimation~~assumptions and ~~judgment~~judgments. ~~The~~Our estimates of GTN adjustments for rebates, copay assistance and chargebacks ~~are~~require ~~impacted~~significant byassumptions ~~our~~and ~~estimate of payor mix~~judgments, ~~which~~considering ~~requires~~factors ~~significant~~such ~~judgment.~~as ~~We consider~~ legal interpretations of applicable laws and regulations, historical experience, payor mix (e.g., Medicare or Medicaid), current contract prices under applicable programs, unbilled claims, processing time lags and inventory levels in the distribution channel ~~in determining our estimates~~. Estimates are assessed each period and adjusted as required to revise information or actual experience.

Discounts and ~~chargebacks:~~Chargebacks

Our U.S. business participates in programs with government entities, the most significant of which are the U.S. Department of Defense, ~~and~~ the U.S. ~~Department of Veterans Affairs~~VA, and other parties, including covered entities under the 340B program, whereby pricing on products is extended below ~~wholesaler~~wholesale ~~list~~acquisition ~~price~~cost to(lower ~~participating~~program ~~entities.~~price) ~~These~~for ~~entities~~qualified ~~purchase~~government ~~products~~providers ~~through~~when ~~wholesalers~~products atare ~~the~~purchased ~~lower~~through ~~program price and the~~ wholesalers. ~~then~~The ~~charge~~chargeback usrepresents the difference between ~~their~~the wholesale acquisition cost and ~~the~~this lower program price that the wholesalers charge us. ~~Accounts~~In such sales, accounts receivable is reduced for the estimated amount of unprocessed chargeback claims ~~attributable to a sale~~ (typically within a two- to four -week time lag).

Our Customers may ~~also~~ receive prompt pay discounts for payment within a specified period, generally approximating two percent of the invoiced sales price. Our payment terms are generally 30 to 60 days. We expect discounts to be earned when offered and wetherefore deduct the full amount of these discounts from product sales when revenue is recognized. Accordingly, accounts receivable is reduced for the estimated amount of these discounts.

~~Accounts~~Rebates, ~~receivable~~Wholesaler ~~is reduced for the estimated amount of fees~~ and ~~cash~~GPO ~~discount at the time of sale and the discount is typically taken by the customer within contractual terms.~~Fees

~~Rebates~~Our U.S. business participates in state government Medicaid and Medicare programs and other qualifying federal and state government programs requiring discounts and rebates to participating federal, ~~wholesaler~~state and ~~GPO~~local ~~fees:~~government entities. For Medicaid and Medicare programs, we estimate the portion of sales attributed to such programs’ patients as rebates to be paid to the respective participating entities, which requires significant judgment.

~~Our~~The ~~U.S.~~IRA, ~~business~~among ~~participates~~other inthings, ~~state~~imposes ~~government~~financial ~~Medicaid~~penalties ~~and~~for ~~Medicare~~price ~~programs~~increases ~~and~~that ~~other~~outpace ~~qualifying~~inflation ~~Federal~~(first due in 2023) and ~~state~~replaces ~~government~~the ~~programs~~Medicare ~~requiring~~Part ~~discounts~~D ~~and~~coverage ~~rebates~~gap todiscount ~~participating~~program ~~state~~with ~~and~~a ~~local~~new ~~government~~discounting ~~entities.~~program ~~All~~(which ~~discounts~~began ~~and~~in ~~rebates~~2025). ~~provided~~The ~~through~~standard ~~these~~Part ~~programs~~D ~~are~~benefit ~~included~~now incomprises ~~our~~three ~~Medicaid~~phases: ~~and~~the ~~Medicare~~deductible ~~rebate~~phase, ~~accruals.~~the ~~Medicaid~~initial ~~rebates~~coverage ~~have~~phase ~~also~~and ~~been~~the ~~extended~~catastrophic tocoverage ~~drugs~~phase. ~~used~~Applicable indispensed ~~managed~~drugs ~~Medicaid~~will ~~plans.~~be ~~The~~subject ~~estimated~~to ~~amount~~manufacturer discounts of ~~unpaid~~10% orduring ~~unbilled~~the ~~rebates~~initial coverage phase and ~~discounts~~20% isduring ~~presented~~the ascatastrophic acoverage ~~liability~~phase. ~~Settlement~~Beginning ofin ~~Medicare~~2025, ~~and~~we ~~Medicaid~~estimate ~~accruals~~the ~~can~~percentage ~~lag~~of ~~for~~products ~~multiple~~sold ~~quarters due~~ to ~~extensive~~patients ~~time~~in ~~delays~~the ~~between~~initial ~~recording~~coverage ~~an accrual~~ and ~~subsequent~~catastrophic ~~receipt~~coverage ofphases anand ~~invoice.~~adjust ~~Due~~the totransaction ~~this~~price ~~lag,~~for ~~adjustments~~such ~~can~~discount ~~incorporate~~at ~~revision~~the time of ~~several~~sale. ~~prior~~Under ~~quarters.~~the ~~Through~~redesigned ~~December~~Medicare ~~31,~~Part ~~2024~~D, we ~~paid~~are a ~~70%~~specified ~~discount~~manufacturer towhose ~~CMS~~applicable ~~when~~drugs ~~the~~for ~~Medicare~~Low ~~Part~~Income DSubsidy-eligible beneficiaries ~~were~~under insection ~~the~~1860D-14(a) ~~coverage gap. Beginning in 2025, as part~~ of the ~~Medicare~~Social ~~Part~~Security DAct ~~redesign~~are ~~within~~subject ~~the~~to ~~IRA,~~lower ~~there~~applicable isdiscounts aduring ~~$2,000~~the ~~cap for out~~phase-~~of-pocket~~in ~~costs~~period. ~~for~~Prior ~~Medicare~~to ~~Beneficiaries~~2025, ~~and~~we ~~manufacturers~~paid ~~are~~a ~~responsible for 10~~70% ofdiscount ~~costs~~to upCMS towhen the ~~cap~~Medicare ~~and~~Part ~~20%~~D ~~after~~beneficiaries ~~the~~were ~~cap~~in isthe ~~reached~~coverage gap.

~~Wholesaler~~All unpaid or unbilled discounts and ~~GPO~~rebates ~~administrative~~provided ~~fees~~through these programs are arecorded ~~significant~~in ~~portion~~accrued ofexpenses ~~our~~and ~~GTN~~other ~~adjustments,~~current ~~however,~~liabilities ~~since~~on ~~they~~the ~~are~~balance ~~based~~sheets. onSettlement ~~contracts,~~of ~~they~~these ~~require~~accruals ~~inherently~~can ~~less~~lag ~~estimation.~~for multiple quarters due to extensive time delays

~~Copay assistance and returns:~~59

Patients who have commercial insurance may receive copay assistance when product is dispensed by pharmacies to patients. We estimate the amount of copay assistance provided to eligible patients based on the terms of the program and redemption information provided by third-party claims processing organizations. We also estimate the amount of copay assistance that we will provide to patients associated with product we have sold but has not yet been dispensed to commercial patients, which requires significant estimation and judgment. Our estimates are recorded in accrued expenses and other current liabilities on the balance sheets.

Table of Co n t e n t s

~~Considering~~between ~~the~~recording ~~timing~~an ofaccrual ~~our respective product launches,~~ and ~~limited~~subsequent ~~experiences~~receipt ~~with returns, we are primarily reliant on historical sales returns~~ of ~~similar~~an ~~products,~~invoice. ~~such~~Due asto ~~those~~this ~~within the same product line~~lag, ~~similar~~adjustments ~~therapeutic~~can ~~area,~~incorporate ~~similar~~revision ~~distribution model, estimated levels~~ of ~~inventory~~several inprior ~~the distribution channel and projected demand~~quarters. We increasingly rely on our products’ actual returns history and other factors, including levels of our inventory in the distribution channel and estimated shelf life, to estimate our returns. Our estimates are recorded in accrued expenses and other current liabilities on the balance sheets.

~~Use~~We pay wholesaler and GPO fees for distribution and related services, which are a significant portion of ~~Information~~our ~~from~~GTN ~~External~~adjustments; ~~Sources:~~however, since they are based on contracts, they require inherently less estimation.

~~Information~~Copay ~~from~~Assistance external sources is used to estimate GTN adjustments. Our estimate of inventory at the wholesalers is based on the historical inventory experience, as well as our analysis of third-party information, including written and oral information obtained from certain wholesalers with respect to their inventory levels and sell-through to customers and our internal information. The inventory information received from wholesalers is a product of their recordkeeping process and excludes inventory held by intermediaries to whom they sell, such as retailers and hospitals. We also use information from external sources to identify prescription trends, patient demand and average selling prices. Our estimates are subject to inherent limitations of estimates that rely on third-party information, as certain third-party information was itself in the form of estimates and reflect other limitations including lags between the date as of which third-party information is generated and the date on which we receive third-party information. Returns

We offer financial assistance to qualified commercially-insured patients for the portion of their prescription cost that is not covered by payors. We estimate the amount of copay assistance provided to qualified patients based on the terms of the program and redemption information provided by third-party claims processing organizations. We also estimate the amount of copay assistance that we will provide associated with product we have sold but has not yet been dispensed to patients, which requires significant assumption and judgment. Our estimates are recorded in accrued expenses and other current liabilities on the balance sheets.

We primarily rely on our products’ actual returns history and other factors, including levels of our inventory in the distribution channel and estimated shelf life, to estimate our products’ returns. We also consider historical sales returns of similar products, such as those within the same product line, similar therapeutic area, similar distribution model, estimated levels of inventory in the distribution channel and projected demand. Our estimates of products’ returns reduce accounts receivable.

Use of Information from External Sources

Information from external sources is used to estimate GTN adjustments. Our estimate of inventory at the wholesalers is based on historical inventory experience, as well as our analysis of third-party information, including written and oral information obtained from certain wholesalers with respect to their inventory levels and sell-through to customers and our internal information. The inventory information received from wholesalers is a product of their recordkeeping process and excludes inventory held by intermediaries to whom they sell, such as retailers and hospitals. We also use information from external sources to identify prescription trends, patient demand and average selling prices. Our estimates are subject to inherent limitations of relying on third-party information, as certain third-party information is itself in the form of estimates and reflects other limitations, including lags between the date third-party information is generated and the date we receive it.

RESULTS OF OPERATIONS

~~Revenue~~Revenues

Our revenue to date has been generated ~~primarily~~ through a combination of product sales and payments in connection with ~~license,~~our ~~research~~current ~~and~~collaboration ~~development~~partnerships ~~collaborative agreements~~ with ~~our~~ various ~~collaboration~~external partners. In the future, we may generate revenue from a combination of our own product sales and payments in connection with our current or future ~~collaborative~~collaboration partnerships, including license fees, other upfront payments, milestone payments, royalties and payments for drug product and/or drug substance. We expect that any revenue we generate will fluctuate in future periods as a result of many factors as described in Part I, Item 1A, “Risk Factors,” of this Annual Report on Form 10-K.

Below is a summary of our total revenues:

	Year Ended December 31,						Change ~~2024~~2025 vs. ~~2023~~2024				Change ~~2023~~2024 vs. ~~2022~~2023
($ in thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023		$		%		$		%
Product sales, net	$	~~319~~377,~~196~~808	$	82319,~~526~~196	$	1582,~~600~~526	$	~~236~~58,~~670~~612	~~287~~18	%	$	66236,~~926~~670	~~429~~287	%
Product supply revenue	1115,~~649~~879		611,~~121~~649		16,~~527~~121		54,~~528~~230		9036	%	45,~~594~~528		~~301~~90	%
Licensing revenue	785,088		~~35,809~~78		35,~~031~~809		~~(35~~5,~~731)~~010		(~~100~~a)	%	~~778~~(35,731)		2(100)	%
Non-cash royalty revenue related to the sale of future royalties	28,~~692~~545		—2,692		—		25,~~692~~853		~~(a)~~217	%	—2,692		(a)
Total revenues	$	~~333~~407,~~615~~320	$	~~124~~333,~~456~~615	$	52124,~~158~~456	$	~~209~~73,~~159~~705	~~168~~22	%	$	72209,~~298~~159	~~139~~168	%

(a) Percent change is not meaningful.

Table of Co n t e n t s

Below is a summary of our product sales, net by product:

	Year Ended December 31,						Change 2025 vs. 2024				Change 2024 vs. 2023
(in thousands)	2024		2023		2022
($ in thousands)	2025		2024		2023		$		%		$		%
Product sales, net
IBSRELA	$	~~158~~274,~~286~~207	$	80158,~~062~~286	$	1580,~~600~~062	$	115,921	73	%	$	78,224	98	%
XPHOZAH	~~160~~103,~~910~~601		2160,~~464~~910		—2,464		(57,309)		(36)	%	158,446		(a)
Total product sales, net	$	~~319~~377,~~196~~808	$	82319,~~526~~196	$	1582,~~600~~526	$	58,612	18	%	$	236,670	287	%

(a) Percent change is not meaningful.

Product sales, net:

The increase in IBSRELA product sales, net in ~~2024~~2025 and ~~2023~~2024 ~~was~~primarily ~~due~~reflected to higher demand ~~since its commercial launch in March 2022~~, ~~reflecting~~driven by continued increase in awareness and prescriber experience. InTo ~~addition~~a lesser extent, the increase in ~~2024~~2025 ~~was~~also ~~attributable~~reflected tohigher ~~the~~net ~~completion of our field-base team expansion~~price.

55The decrease in XPHOZAH product sales, net in 2025 primarily reflected lower demand and lower net price, both driven by the loss of XPHOZAH Medicare Part D reimbursement. On January 1, 2025, CMS officially transitioned oral only therapies for ESRD patients on dialysis, including XPHOZAH, into the ESRD Prospective Payment System. This decrease was partially offset by continued growth in other channels.

~~Table~~The ofincrease ~~Contents~~in XPHOZAH product sales, net in 2024 primarily reflected higher demand since its commercial launch in November 2023.

The increase in XPHOZAH product sales, net in 2024 and 2023 was due to higher demand since its commercial launch in November 2023. As of January 1, 2025, we no longer receive reimbursement for XPHOZAH from Medicare Part D following the decision by the Centers of Medicare and Medicaid Services to eliminate Medicare Part D reimbursement to transition oral only therapies, including XPHOZAH, into the End Stage Renal Disease Prospective Payment System. Patient access to XPHOZAH remains through a prescription written by a qualifying healthcare provider through our ArdelyxAssist specialty pharmacy partner. Patients who do not have affordable access will be evaluated for eligibility to receive XPHOZAH fulfilled by our Ardelyx patient assistance program.

Product supply revenue:

~~The~~Product ~~increase in product~~ supply revenue inis ~~2024~~primarily ~~and~~impacted ~~2023~~by ~~was~~the ~~due~~timing toof product supply shipments to our collaboration partners, ~~primarily Kyowa Kirin,~~ under our ~~respective~~product ~~commercial~~ supply agreements in support of ~~non~~the development and commercialization of our products ex-USU.S. ~~launches~~by our collaboration partners. The product supply revenue was primarily attributable to Kyowa Kirin for all years presented.

Licensing revenue:

Licensing revenue is primarily impacted by the timing of regulatory and ~~commercial~~commercialization milestone achievements from our ~~out-licensing~~collaboration partners, as well as sales-based royalties received from Knight. The 2023 licensing revenue included $30.0 million in payments received under the Kyowa Kirin Agreement, following Kyowa Kirin’s submission to the Japanese MHLW for the NDA for tenapanor in the improvement of hyperphosphatemia in adult patients with CKD on dialysis; and a $5.0 million payment under the Fosun Agreement, following the NDA acceptance by China’s Center for Drug Evaluation of the NMPA for tenapanor in the control of serum phosphorus in adult patients with CKD on hemodialysis and the U.S. FDA approval of XPHOZAH to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

The licensing revenue in 2025 was primarily attributable to a $5.0 million milestone earned during the 2025 first quarter under the terms of the Fosun Agreement, following the NDA approval by China’s Center for Drug Evaluation of the NMPA for tenapanor in the control of serum phosphorus in adult patients with CKD on hemodialysis.

The licensing revenue in 2023 was primarily attributable to $30.0 million in payments received under the Kyowa Kirin Agreement, following Kyowa Kirin’s submission to the Japanese MHLW for the NDA for tenapanor in the improvement of hyperphosphatemia in adult patients with CKD on dialysis; and a $5.0 million milestone payment under the Fosun Agreement, following the NDA acceptance by China’s Center for Drug Evaluation of the NMPA for tenapanor in the control of serum phosphorus in adult patients with CKD on hemodialysis and the FDA approval of XPHOZAH to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

Non-cash royalty revenue:

Non-cash royalty revenue inreflects ~~2024~~royalties ~~was~~and ~~attributable~~commercialization tomilestones ~~royalties~~ from Kyowa Kirin for sales of PHOZEVEL in Japan ~~since its launch in February 2024~~, which wewas ~~remitted~~launched ~~to HCR upon receipt~~ in ~~accordance~~February ~~with the HCR Agreement~~2024.

~~GTN~~Non-cash ~~Adjustments~~royalty revenue in 2025 included approximately $3.4 million related to a commercialization milestone earned during the 2025 third quarter under the terms of the Kyowa Kirin Agreement. The payment was remitted to HCR upon receipt in accordance with the HCR Agreement.

We recognize product sales net of GTN adjustments that are further described in Note 6. Revenue and the “Critical Accounting Policies and Estimates” caption in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Reconciliation of gross product sales to product sales, net by GTN adjustment category is as follows:61

	Year Ended December 31,
($ in thousands)	2024			2023			2022
Gross product sales	$	429,053		$	113,861		$	21,648
GTN adjustments	(109,857)			(31,335)			(6,048)
Product sales, net	$	319,196		$	82,526		$	15,600
GTN adjustment percentage	25.6		%	27.5		%	27.9		%

GTN adjustments are primarily a function of sales volume, payor mix, contractual or legislative discounts and rebates. Adjustments to provisions for product sales made in prior periods due to changes in estimates were not significant for any of the years presented. The decrease in GTN adjustment percentage in 2024 was primarily due to a higher percentage of sales which had a more favorable GTN rate. The reduction was mainly due to lower sales subjected to copay assistance and contractual chargebacks which had higher GTN adjustment percentages. We expect GTN adjustment percentages to increase in the future due to unfavorable payor mix shifts associated with loss of XPHOZAH Medicare Part D reimbursement beginning January 1, 2025.

Table of Co n t e n t s

GTN Adjustments

We recognize product sales net of GTN adjustments, as further described in Note 6. Revenue and the “Critical Accounting Policies and Estimates” caption in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Reconciliation of gross product sales to product sales, net is as follows:


	Year Ended December 31,									Change 2025 vs. 2024				Change 2024 vs. 2023
($ in thousands)	2025			2024			2023			$		%		$		%
Gross product sales	$	541,378		$	429,053		$	113,861		$	112,325	26	%	$	315,192	277	%
GTN adjustments	(163,570)			(109,857)			(31,335)			(53,713)		49	%	(78,522)		251	%
Product sales, net	$	377,808		$	319,196		$	82,526		$	58,612	18	%	$	236,670	287	%
GTN adjustment percentage	30.2		%	25.6		%	27.5		%

GTN adjustments are primarily a function of sales volume, payor mix, contractual or legislative discounts and rebates.

The increase in GTN adjustment percentage in 2025 reflected the unfavorable payor mix shifts, primarily associated with loss of XPHOZAH Medicare Part D reimbursement.

The decrease in GTN adjustment percentage in 2024 was primarily due to a more favorable payor mix and lower sales subjected to copay assistance.

The activities and ending reserve balances for each significant category of GTN adjustments on product sales, net, which constitute variable consideration, were as follows:

(in thousands)	Discounts and ~~chargebacks~~Chargebacks		Rebates, ~~wholesaler~~Wholesaler and GPO ~~fees~~Fees		Copay ~~assistance~~Assistance and ~~returns~~Returns		Total
Balance as of December 31, 2022	$	142	$	1,444	$	1,258	$	2,844
Balance as of December 31, 2023	$	478	$	4,234	$	3,916	$	8,628
Provisions	5,341		15,365		10,629		31,335
Credits/payments	(5,005)		(12,575)		(7,971)		(25,551)
Balance as of December 31, 2023	478		4,234		3,916		8,628
Provisions	15,099		65,833		28,925		109,857
Credits/payments	(13,934)		(55,592)		(21,671)		(91,197)
Balance as of December 31, 2024	$1,643	~~1,643~~	$14,475	~~14,475~~	$11,170	~~11,170~~	$27,288	~~27,288~~
Provisions(1)	23,356		108,547		31,667		163,570
Credits/payments	(23,306)		(88,566)		(33,563)		(145,435)
Balance as of December 31, 2025	$	1,693	$	34,456	$	9,274	$	45,423

~~Adjustments~~(1)Provisions toincluded ~~prior~~approximately ~~period~~$4.4 million ~~provisions~~of ~~recorded~~net infavorable ~~the~~adjustment ~~current~~resulting ~~period~~from ~~were~~changes ~~not~~in ~~material~~prior periods’ estimates.

~~Expenses~~62

Below is a summary of our cost of goods sold, operating expenses, interest expense, non-cash interest expense related to the sale of future royalties and other income, net:

	Year Ended December 31,						Change 2024 vs. 2023				Change 2023 vs. 2022
($ in thousands)	2024		2023		2022		$		%		$		%
Cost of product sales	$	6,851	$	2,323	$	566	$	4,528	195	%	$	1,757	310	%
Other cost of revenue	43,705		15,472		3,551		28,233		182	%	11,921		336	%
Total cost of goods sold	$	50,556	$	17,795	$	4,117	$	32,761	184	%	$	13,678	332	%
Research and development	$	52,317	$	35,536	$	35,201	$	16,781	47	%	$	335	1	%
Selling, general and administrative	258,692		134,401		76,599		124,291		92	%	57,802		75	%
Total operating expenses	$	311,009	$	169,937	$	111,800	$	141,072	83	%	$	58,137	52	%
Interest expense	$	(13,006)	$	(4,950)	$	(3,400)	$	(8,056)	163	%	$	(1,550)	46	%
Non-cash interest expense related to the sale of future royalties	(7,088)		(3,924)		(1,673)		(3,164)		81	%	(2,251)		135	%
Other income, net	9,174		6,630		1,633		2,544		38	%	4,997		306	%

Cost of Goods Sold

Cost of product sales consists of the cost of commercial goods sold to our Customers and includes the cost of materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process and indirect overhead costs. Other cost of revenue consists of the cost of materials sold to our international partners under product supply agreements, certain costs related to capacity expansion at current and future CMOs, as well as payments due to AstraZeneca based on sales of tenapanor. See the “AstraZeneca” caption in Note 7. Collaboration And Licensing Agreements for further detail.

Cost of product sales:

The increase in cost of product sales in 2024 and 2023 was due to higher product sales. A portion of the costs of IBSRELA and XPHOZAH units recognized as revenue during the years ended December 31, 2024 and 2023 were expensed as research and development expenses in periods prior to the commencement of capitalization of inventory costs for each respective product as discussed in Note 2. Summary Of Significant Accounting Policies. The cost associated with inventory sold but previously expensed as research and development was $6.3 million, $4.4 million and $1.9 million in 2024, 2023 and 2022, respectively. The value of inventory on hand as of December 31, 2024 and 2023 that was previously expensed as research and development was approximately $15.6 million and $21.8 million, respectively.

Table of Co n t e n t s

~~Other~~Costs ~~cost~~and ~~of revenue:~~Expenses

~~The~~Below ~~increase~~is ina ~~other~~summary ~~cost~~ of ~~revenue~~our incosts ~~2024~~ and ~~2023~~operating ~~was primarily due to higher AstraZeneca royalties~~expenses, ~~driven~~interest ~~by higher product sales~~expense, ~~net~~non-cash ofinterest ~~tenapanor.~~expense Inrelated ~~2023, AstraZeneca royalties attributed~~ to ~~licensing revenue had a greater impact on~~ the ~~obligation~~sale ~~than royalties from product sales, net. Other cost~~ of ~~revenue~~future ~~related~~royalties ~~to the AstraZeneca Termination Agreement was $34.7 million, $12.4 million~~ and ~~$3.6~~other ~~million in 2024~~income, 2023 and 2022, respectively. The remaining future royalty obligation to AstraZeneca was $12.1 million as of December 31, 2024. In addition, the increase in other cost of revenue was due to higher product supply revenue and costs associated with that revenue.net:


	Year Ended December 31,						Change 2025 vs. 2024				Change 2024 vs. 2023
($ in thousands)	2025		2024		2023		$		%		$		%
Cost of sales	$	39,537	$	50,556	$	17,795	$	(11,019)	(22)	%	$	32,761	184	%
Research and development	71,527		52,317		35,536		19,210		37	%	16,781		47	%
Selling, general and administrative	337,233		258,692		134,401		78,541		30	%	124,291		92	%
Total costs and operating expenses	$	448,297	$	361,565	$	187,732	$	86,732	24	%	$	173,833	93	%

Interest expense	$	(20,102)	$	(13,006)	$	(4,950)	$	(7,096)	55	%	$	(8,056)	163	%
Non-cash interest expense related to the sale of future royalties	$	(8,296)	$	(7,088)	$	(3,924)	$	(1,208)	17	%	$	(3,164)	81	%
Other income, net	$	8,745	$	9,174	$	6,630	$	(429)	(5)	%	$	2,544	38	%

Cost of Sales

Cost of sales consists of (i) cost of product sales and (ii) other cost of revenue. Cost of product sales includes the cost of commercial goods sold to our Customers, such as the cost of materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process and indirect overhead costs. Other cost of revenue includes the cost of materials sold to our collaboration partners under product supply agreements, certain costs related to capacity expansion at current and future CMOs, as well as payments due to AstraZeneca based on sales of tenapanor, as discussed further under the “AstraZeneca” caption in Note 7. Collaboration and Licensing Agreements.

Below is a summary of our costs of sales:


	Year Ended December 31,						Change 2025 vs. 2024				Change 2024 vs. 2023
($ in thousands)	2025		2024		2023		$		%		$		%
Cost of product sales	$	11,185	$	6,851	$	2,323	$	4,334	63	%	$	4,528	195	%
Other cost of revenue	28,352		43,705		15,472		(15,353)		(35)	%	28,233		182	%
Cost of sales	$	39,537	$	50,556	$	17,795	$	(11,019)	(22)	%	$	32,761	184	%

The increase in cost of product sales in 2025 and 2024 reflected higher product sales. A portion of the costs of IBSRELA and XPHOZAH units recognized as revenue during 2025 and 2024 was expensed as research and development expense in periods prior to the commencement of capitalization of inventory costs for each respective product as discussed in Note 2. Summary of Significant Accounting Policies. The cost associated with inventory sold but previously expensed as research and development was $3.2 million, $6.3 million and $4.4 million in 2025, 2024 and 2023, respectively. The value of inventory on hand as of December 31, 2025 and 2024 that was previously expensed as research and development was approximately $10.9 million and $15.6 million, respectively.

The decrease in other cost of revenue in 2025 primarily reflected the full recognition of the maximum $75.0 million royalty obligation under the AstraZeneca Termination Agreement as of the end of the 2025 second quarter, partially offset by higher costs associated with product supply revenue.

The increase in other cost of revenue in 2024 primarily reflected higher AstraZeneca royalties, driven by higher product sales, net of tenapanor, as well as higher costs associated with product supply revenue.

Other cost of revenue related to the AstraZeneca Termination Agreement was $12.7 million, $34.7 million and $12.4 million in 2025, 2024 and 2023, respectively. As of the end of the 2025 second quarter, the maximum $75.0 million royalty obligation under the AstraZeneca Termination Agreement had been fully recognized.

Table of Co n t e n t s

Research and Development

Research and development activities include research and early discovery, preclinical and clinical development, drug formulation and medical support to marketed products. External R&D and other expenses include research and development expenses incurred under agreements with outside consultants, third-party CROs and investigative sites where a substantial portion of our clinical studies are conducted, and with CMOs where our clinical supplies are produced;. ~~employee~~Employee-related expenses, ~~which~~ include salaries, bonuses, benefits, travel and stock-based compensation;. ~~expenses~~Facilities, ~~associated~~equipment, ~~with~~depreciation and other expenses include supplies and materials consumed in connection with our research operations~~; and other allocated expenses~~, ~~which include~~ direct and allocated expenses for rent and maintenance of facilities, depreciation and amortization expense, information technology expense and other supplies.

Below is a summary of our research and development expenses:

	Year Ended December 31,						Change ~~2024~~2025 vs. ~~2023~~2024				Change ~~2023~~2024 vs. ~~2022~~2023
($ in thousands)	~~2024~~2025		~~2023~~2024		~~2022~~2023		$		%		$		%
External R&D and other expenses	$	2031,~~723~~747	$	1520,~~213~~723	$	1715,~~011~~213	$	511,~~510~~024	3653	%	$	(15,~~798)~~510	~~(11)~~36	%
Employee-related expenses	2735,~~541~~250		1727,~~391~~541		1517,~~065~~391		107,~~150~~709		5828	%	210,~~326~~150		1558	%
Facilities, equipment, depreciation and other expenses	4,~~053~~530		24,~~932~~053		32,~~125~~932		~~1,121~~477		3812	%	~~(193)~~1,121		~~(6)~~38	%
Total research and development expenses	$	5271,~~317~~527	$	3552,~~536~~317	$	35,~~201~~536	$	1619,~~781~~210	4737	%	$	~~335~~16,781	147	%

The increase in R&D expenses in ~~2024,~~2025 ~~including~~reflected ~~other~~higher external R&D and other expenses, primarily ~~reflected~~associated ~~increased medical engagement~~ with ~~scientific~~clinical ~~communities~~trial ~~in the areas of gastroenterology and nephrology related to our marketed products~~activities. The increase in ~~external~~ R&D expenses was also ~~attributable~~due to ~~clinical~~increased ~~trial and pharmacovigilance activities. The increase in~~ employee-related ~~R&D~~ expenses ~~was~~primarily ~~the~~driven ~~result~~by ofhigher ~~increases~~headcount into ~~headcount~~support ~~and~~clinical ~~personnel~~trial ~~costs,~~activities ~~including~~and anmedical ~~increase~~engagement inwith ~~stock-based~~scientific ~~compensation~~communities ~~expenses~~in ~~totaling~~the ~~$6.0~~areas ~~million~~of gastroenterology and ~~$0.4~~nephrology ~~million~~related into ~~2024~~our ~~and~~marketed ~~2023, respectively~~products.

The increase in R&D expenses in ~~2023~~2024 ~~remained~~reflected ~~relatively~~increased ~~stable~~employee-related asexpenses ~~compared~~primarily driven by higher headcount to ~~2022,~~support ~~however,~~medical ~~the~~engagement ~~focus~~with ofscientific ~~2023~~communities ~~activities~~in ~~primarily~~the ~~shifted~~areas ~~towards~~of ~~medical~~gastroenterology and ~~pharmacovigilance~~nephrology ~~efforts~~related ~~supporting~~to our marketed products. ~~Whereas,~~and inhigher ~~2022,~~external ~~activities~~R&D ~~focused~~and ~~more~~other onexpenses ~~clinical~~attributable ~~activities~~to inclinical ~~preparation~~trial ~~for~~and ~~the~~pharmacovigilance ~~respective regulatory approvals~~activities.

The increases in employee-related expenses in 2025 and 2024 included incremental stock-based compensation expenses of $0.7 million and $6.0 million, respectively.

Selling, General and Administrative

Selling, general and administrative expenses relate to sales and marketing, finance, human resources, legal and other administrative activities, including information technology ~~investments~~. Selling, general and administrative expenses consist primarily of personnel costs, outside professional services, marketing, advertising and legal expenses, facilities costs not otherwise allocated to research and development and other general and administrative costs.

The increase in selling, general and administrative expenses in ~~2024~~2025 and ~~2023~~2024 ~~was~~ primarily ~~due~~reflected to increased commercialization and administrative costs to support net sales growth of IBSRELA and XPHOZAH ~~and to support our strategy~~. The increases consisted of external spending for disease awareness initiatives, patient affordability, access support and related patient awareness, as well as increased commercial infrastructure ~~and increased legal fees incurred related to the Company’s lawsuit against CMS in 2024~~. ~~The~~In ~~increase~~addition, ~~was~~these ~~also~~increases were attributable to increases in headcount and related personnel costs, including anincremental ~~increase in~~ stock-based compensation ~~expense~~expenses ~~totaling~~of $1710.89 million and $217.48 million in ~~2024~~2025 and ~~2023~~2024, respectively.

Table of Contents

Interest Expense

Interest expense represents the interest associated with our ~~loan~~2022 ~~agreements~~Loan Agreement.

The increase in interest expense in ~~2024~~2025 and ~~2023~~2024 ~~was~~primarily ~~due~~reflected to a higher outstanding loan balance resulting from the term loan draws in each respective year: $50.0 million for the Term DE Loan in ~~October~~June ~~2024~~2025, $50.0 million for the Term CD Loan in ~~March~~October 2024, and $2250.50 million for the Term BC Loan in ~~October~~March ~~2023~~2024.

Non-Cash Interest Expense Related to the Sale of Future Royalties

Non-cash interest expense ~~related~~consists ~~to the sale~~ of ~~future~~imputed ~~royalties~~interest ~~represents~~on the ~~imputed~~carrying ~~interest~~value ~~expense~~of on our deferred royalty obligation, ~~related~~which tois ~~the~~impacted ~~sale~~by ~~of future royalties using~~ the ~~effective~~imputed interest ~~method.~~rate ~~Non-cash~~derived ~~interest~~from ~~expense~~estimated isamounts ~~impacted~~and bytiming ~~the outstanding balance~~ of ~~the~~future ~~deferred~~royalties ~~royalty~~and ~~obligation,~~commercialization ~~which~~payments ~~increases~~to ~~from~~be ~~milestone payments~~ received ~~from~~by HCR. ~~under~~The ~~the~~carrying ~~sale~~value of ~~future royalties agreement and imputed interest accrued on~~ the ~~outstanding~~ deferred royalty obligation, ~~and~~increases ~~decreases~~from asproceeds ~~royalties~~ received from Kyowa Kirin related to the sale of tenapanor for cardiorenal indications in Japan are subsequently remitted to HCR. Refer to Note 8. Deferred Royalty Obligation Related To The Sale Of Future Royalties for further detail.

The increase in non-cash interest expense related to the sale of future royalties in 2024 and 2023 was due to the increasing outstanding balance of the deferred royalty obligation attributed to the upfront milestones received from HCR, including the $10.0 million upfront payment received in June 2022 and the $5.0 million milestone payment received in October 2023 as a result of Kyowa Kirin’s receipt of regulatory approval to market tenapanor for hyperphosphatemia in Japan in February 2024 and imputed interest accrued on the outstanding balance. In 2024, we began to receive royalties from Kyowa Kirin which were remitted to HCR, thereby reducing the outstanding deferred royalty obligation.64

Table of Co n t e n t s

HCR and recorded non-cash interest expense, and decreases as royalties and commercialization milestone payments received from Kyowa Kirin from sales of tenapanor in Japan are remitted to HCR. Refer to Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties for further detail.

The increase in non-cash interest expense related to the sale of future royalties in 2025 and 2024 primarily reflected the imputed interest accrued on the increasing carrying value of the deferred royalty obligation, partially offset by royalties and commercialization milestones received from Kyowa Kirin related to the sale of PHOZEVEL, which were remitted to HCR.

Other Income, Net

Other income, net consists of interest income earned on our cash, cash equivalents and short-term investments, the periodic revaluation of ~~the~~previously outstanding exit fees ~~related to our loan agreements~~, as well as currency exchange gains and losses.

The ~~increase~~decrease in other income, net in ~~2024~~2025 ~~and 2023~~ primarily reflected ~~higher~~lower income on our investments, resulting from ~~both~~lower ~~higher~~ interest rates ~~and~~throughout the period, partially offset by larger investment balances ~~throughout~~and ~~the~~higher ~~periods~~currency exchange gains.

The increase in other income, net in 2024 primarily reflected higher income on our investments resulting from both higher interest rates and larger investment balances throughout the period. In 2024 and 2023, other income, net included the periodic revaluations of our previously outstanding 2022 Exit Fee and 2018 Exit Fee, as discussed in Note 10. Derivative Liabilities, which were settled in October 2024 and October 2023, respectively.

Provision for Income Taxes

Our provision for income taxes includes current and deferred tax, including foreign withholding taxes paid on payments received from certain collaboration partners. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their income tax bases, as well as from net operating loss and tax credit carryforwards. Our deferred tax assets continue to be fully offset by a valuation allowance, including deferred tax assets related to our net operating loss and tax credit carryforwards, which may be subject to annual limitations as a result of ownership changes that may have occurred or could occur in the future.

Refer to Note 2. Summary Ofof Significant Accounting Policies for further discussion of our significant accounting policies.

LIQUIDITY AND CAPITAL RESOURCES

Below is a summary of our cash, cash equivalents and short-term investments:

	December 31,				Change ~~2024~~2025 vs. ~~2023~~2024
($ in thousands)	~~2024~~2025		~~2023~~2024		$		%
Cash and cash equivalents	$	6467,~~932~~999	$	2164,~~470~~932	$	433,~~462~~067	~~202~~5	%
Short-term investments	~~185~~196,~~168~~690		~~162~~185,~~829~~168		2211,~~339~~522		146	%
Total liquid funds	$	~~250~~264,~~100~~689	$	~~184~~250,~~299~~100	$	6514,~~801~~589	366	%

We regularly assess our cash position and our working capital needs to execute our strategy. ~~Our primary uses of cash to date have been to fund research and development expenditures related to our development of tenapanor and to support the commercialization of our marketed products.~~ We have historically funded our operations primarily from ~~the sale of common stock,~~ product sales, ~~funds~~sales ~~from~~of our ~~collaboration~~common ~~partnerships~~stock, funds from our loan agreements with SLR, funds from our collaboration partnerships, as well as ~~sales~~the sale of future royalties and commercialization milestones to HCR. We expect that we will increasingly rely on cash generated from our commercial operations to fund our operating plan while maintaining financial flexibility ~~from our ability~~ to source cash from future equity sales and debt financing.

59Sources of Liquidity

In January 2023, we entered into the 2023 Open Market Sales Agreement with Jefferies with respect to an “at-the-market offering” program, which was established under the Company’s shelf registration statement on Form S-3 and expired in January 2026. Under the 2023 Open Market Sales Agreement, we sold a total of 16.8 million shares of our common stock and received gross proceeds of $70.0 million at a weighted average sales price of approximately $4.17. During the year ended December 31, 2025, we did not sell any shares under the 2023 Open Market Sales Agreement.

In November 2025, we filed an automatic shelf registration statement on Form S-3ASR, which became effective upon filing, containing (i) a base prospectus, which covers the offering, issuance and sale from time to time in one or more offerings of our common stock, preferred stock, debt securities, warrants and/or units; and (ii) a prospectus supplement for the offering, issuance and sale of up to a maximum aggregate offering price of $100.0 million of our common stock that may be issued and sold from time to time, under the 2025 Open Market Sales Agreement, deemed to be “at-the-market offerings.” Pursuant to the

Table of Co n t e n t s

~~Under~~2025 aOpen ~~registration~~Market ~~statement~~Sales ~~filed~~Agreement, ~~in 2020~~Jefferies, weas ~~had~~sales ~~the~~agent, ~~ability~~may toreceive ~~sell~~a commission of up to ~~$150.0~~three ~~million~~percent of the gross sales price for shares of our common stock ~~through~~sold ~~Jefferies,~~under asthe ~~our~~2025 ~~sales~~Open ~~agent~~Market Sales Agreement. As of ~~March~~December 31, ~~2023~~2025, wethere ~~had~~have ~~received~~been ~~the~~no ~~maximum~~sales ~~gross proceeds~~ of ~~$150.0~~our ~~million~~common atstock aunder ~~weighted~~the ~~average~~2025 ~~share~~Open ~~price~~Market ofSales ~~approximately $1~~Agreement.~~57.~~

InWe ~~January~~have ~~2023, we filed~~ a ~~registration~~loan ~~statement~~and onsecurity ~~Form~~agreement ~~S-3,~~(as ~~which became effective in January 2023~~amended, ~~containing (i) a base prospectus for~~ the ~~offering,~~2022 ~~issuance~~Loan ~~and~~Agreement) ~~sale~~with bySLR. usThe of2022 upLoan toAgreement provides a ~~maximum~~total ~~aggregate offering price~~ of $~~250~~300.0 million, of ~~our~~which ~~common~~$200.0 million ~~stock,~~has ~~preferred~~been ~~stock,~~drawn ~~debt securities, warrants~~ and~~/or~~ ~~units,~~is ~~from~~outstanding ~~time~~as toof ~~time~~December 31, in2025, ~~one~~including or$50.0 ~~more~~million ~~offerings;~~of ~~and~~the ~~(ii)~~Term aE ~~prospectus~~Loan ~~supplement~~drawn ~~for~~during the ~~offering,~~2025 ~~issuance~~second ~~and~~quarter. ~~sale~~The byadditional usavailable ofborrowings ~~up to a maximum aggregate offering price~~ of $~~150~~100.0 million consist of ~~our~~the ~~common~~Term ~~stock~~F ~~that~~Loan ~~may be issued~~ and ~~sold,~~the ~~from~~Term ~~time~~G ~~to time~~Loan, ~~under~~each ain ~~sales agreement with Jefferies, deemed to be “at-~~the~~-market~~ ~~offerings”~~amount ~~(2023 Open Market Sales Agreement). Pursuant to the 2023 Open Market Sales Agreement, Jefferies, as sales agent, may receive a commission~~ of ~~up to 3~~$50.0% ~~of the gross sales price for shares of common stock sold under the 2023 Open Market Sales Agreement~~million. AsThe ofTerm ~~December 31,~~F ~~2024,~~Loan weand ~~have completed sales pursuant to~~ the ~~2023~~Term ~~Open~~G ~~Market~~Loan ~~Sales~~may ~~Agreement~~be ~~resulting~~drawn inat the ~~issuance~~Company’s ofelection ~~16.8~~by ~~million~~June ~~shares~~30, of2026 ~~our common stock~~ and ~~receipt~~December of20, ~~gross~~2026, ~~proceeds of $70~~respectively.0 ~~million~~See atNote a9. ~~weighted~~Borrowing ~~average~~for ~~sales~~further ~~price of approximately $4~~discussion.~~17.~~

WeCash ~~have~~Flow a loan and security agreement (as amended, the 2022 Loan Agreement) with SLR. The 2022 Loan Agreement provides a total of $200.0 million, of which $150.0 million has been drawn as of December 31, 2024 to support our ongoing operations and the commercial launches of IBSRELA and XPHOZAH. The borrowings under the 2022 Loan Agreement bear interest at SOFR plus a spread based on our public debt rating. We classify outstanding borrowings under the 2022 Loan Agreement as long-term based on the maturity date of the loan. All the term loans mature on July 1, 2028. See Note 9. Borrowing for further discussion.Activities

We believe our available cash, cash equivalents and short-term investments as of December 31, 2024 will be sufficient to fund our planned operations for at least a period of one year from the issuance of these financial statements. We have based this estimate on assumptions that may prove to be wrong and we could utilize our available capital resources sooner than we currently expect. In particular, our operating plan may change and we may require significant additional capital to fund our operations. There are no assurances that our efforts to meet our operating cash flow requirements will be successful. If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations following the issuance of these financial statements, our liquidity, financial condition and business prospects will be materially affected.

Our future funding requirements will depend on many factors as described in Part I, Item 1A, “Risk Factors,” of this Annual Report on Form 10-K.

CASH FLOW ACTIVITIES

The following table summarizes our cash flows activities:

	Year Ended December 31,				Change 2025 vs. 2024		~~Change 2024 vs. 2023~~				~~Change 2023 vs. 2022~~
($ in thousands)	~~2024~~2025		~~2023~~2024		~~2022~~		$		%		$		%
Net cash used in operating activities	$	(4442,~~809~~483)	$	(8944,~~717~~809)	$	~~(70,044)~~	$	442,~~908~~326	(505)	%	$	~~(19,673)~~	28	%
Net cash (used in) provided by investing activities	(18,318)		(131,248)		18,415		112,930		(86)	%	(149,663)		(813)	%
Net cash used in investing activities	(8,959)		(18,318)				9,359		(51)	%
Net cash provided by financing activities	~~106~~54,~~589~~509		~~146~~106,~~295~~589		~~75,341~~		(3952,~~706~~080)		(2749)	%	~~70,954~~		94	%
Net increase (decrease) in cash and cash equivalents	$	43,462	$	(74,670)	$	23,712	$	118,132	(158)	%	$	(98,382)	(415)	%
Net increase in cash and cash equivalents	$	3,067	$	43,462			$	(40,395)	(93)	%

Cash Flows from Operating Activities

~~Net~~Cash ~~cash~~flows ~~used~~from in operating activities ~~decreased~~represent inthe ~~2024~~cash ~~compared~~receipts and payments related to ~~2023,~~all ~~primarily~~of ~~due~~our toactivities other than investing and financing activities. Net operating cash ~~generated~~flow ~~from~~is ~~higher~~derived ~~product~~by ~~sales,~~adjusting our net, ~~partially~~loss ~~offset~~for bynon-cash ~~working~~operating ~~capital~~items and changes in operating assets and liabilities resulting from timing differences between the cash ~~uses~~receipts toand ~~support~~payments and when the transactions are recognized in our ~~commercial~~result ~~growth~~of operations. ~~Net~~As ~~working~~a ~~capital~~result, changes in net operating cash ~~outflows~~flow ~~were~~reflect, ~~driven~~among ~~primarily~~other bythings, ~~increases~~the intiming ~~customer~~of ~~credit~~(i) ~~and~~cash ~~inventory~~collections ~~purchases,~~from ~~which~~our ~~were~~Customers ~~partially~~and ~~offset~~(ii) bypayments ~~increases~~made in ~~accounts~~the ~~payable~~normal course of business such as payments to suppliers, including our CMOs, CROs and ~~accruals~~government agencies.

Net cash used in operating activities ~~increased~~ in ~~2023~~2025 was materially unchanged compared to ~~2022~~2024, primarily due to ~~working~~the ~~capital~~increased cash ~~uses~~inflows ~~to support our commercial launches, partially offset by cash~~ generated from ~~higher~~our product sales, ~~net~~and ~~from~~timing ~~such~~of ~~launches.~~cash ~~Net~~collections ~~working~~from ~~capital~~our ~~cash~~Customers ~~outflows~~exceeded ~~were~~the ~~driven~~increased ~~primarily~~payments bymade ~~increases~~ in ~~customer~~the ~~credit,~~normal ~~upfront~~course ~~payments~~of business to ~~CMOs~~support ~~for~~our ~~the~~ commercial ~~manufacturing~~growth ~~of IBSRELA~~ and ~~XPHOZAH~~research and ~~increased~~development ~~prepaid selling and marketing spending~~activities.

Table of Contents

Cash Flows from Investing Activities

~~Net~~Cash ~~cash~~flows ~~used~~from in investing activities ~~for~~include ~~2024~~cash ~~and~~used ~~2023~~for ~~was~~capital ~~primarily~~expenditures ~~impacted~~and bypurchases ~~the timing~~ of ~~our~~short-term ~~investment~~investments ~~maturities~~as ~~and~~well ~~purchases.~~as ~~In 2023,~~ net ~~investment~~proceeds ~~purchases~~from ~~were~~asset ~~significantly~~dispositions ~~higher when compared to other reported periods. To a lesser extent, the 2024 cash used for investing activities included property, plant~~ and ~~equipment~~maturities ~~purchases associated with our new leased facility and build outs~~ of ~~existing~~short-term ~~facilities~~investments.

Net cash used in investing activities in 2025 primarily reflected our short-term investment maturities and purchases.

Cash Flows from Financing Activities

~~Net~~Cash ~~cash~~flows ~~provided~~from by financing activities ~~decreased~~include ~~in 2024 compared to 2023, primarily due to $99.5 million~~ net proceeds ~~from~~associated ~~the~~with ~~Term~~our Cloan ~~Loan~~agreements, ~~and~~sales ~~Term D Loan and proceeds from the issuance~~ of ~~common stock under~~ our ~~equity~~common ~~incentive and~~ stock ~~purchase~~with ~~plans~~respect into ~~2024 which were less than $119.2 million received in 2023 from~~ the ~~issuance of common stock pursuant to~~ “at -the -market ~~offerings.~~offering” Weprograms ~~have~~and ~~not~~issuances ~~received~~of ~~any~~our ~~proceeds~~common stock under ~~the~~our ~~2021~~equity ~~Open~~incentive ~~Market Sales Agreement in 2024~~plans.

Net cash provided by financing activities ~~increased~~ in ~~2023~~2025 ~~compared~~included to$48.7 ~~2022,~~million ~~primarily~~received ~~due~~from tothe ~~higher~~Term ~~net~~E ~~proceeds~~Loan, ~~from~~net ~~issuance~~ of ~~our~~costs ~~common~~and ~~stock~~$5.8 ~~pursuant~~million toreceived from the atissuance ~~the~~of ~~market~~our ~~offerings~~common ofstock ~~$47.6~~under ~~million,~~our asequity ~~well~~incentive asplans, ~~net~~which ~~proceeds~~was ~~received~~lower ofthan $2299.45 million received from ~~drawing~~ the Term BC Loan asand ~~compared~~Term toD Loan, net ~~expenditure~~ of costs and $68.1 million inreceived ~~2022~~from ~~in conjunction with entering into~~ the ~~2022~~issuance ~~Loan~~of ~~Agreement~~our ~~and~~common ~~repaying~~stock ~~the principal outstanding~~ under ~~the~~our ~~2018~~equity ~~Loan.~~incentive ~~This~~plans ~~increase~~in ~~was partially offset by lower net proceeds from the sale of future royalties to HCR of $5~~2024.~~0 million.~~

~~SMALLER REPORTING COMPANY AND LARGE ACCELERATED FILER STATUS~~66

AsTable ~~a non-accelerated filer, we were not required to obtain an opinion~~ of our independent auditors with respect to our internal controls over financial reporting for the year ended December 31, 2022. On June 30, 2023, our public float exceeded $700.0 million and therefore since January 1, 2024, we are considered a large accelerated filer. This Annual Report on Form 10-K includes an opinion of Ernst & Young LLP, our independent auditors with respect to our internal control over financial reporting as of December 31, 2024.Contents

Funding Requirements

Based on our current operating model, we believe our available cash, cash equivalents and short-term investments as of December 31, 2025 will be sufficient to fund our planned operations for at least a period of one year from the issuance of these financial statements. We have based this estimate on assumptions that may prove to be wrong and we could utilize our available capital resources sooner than we currently expect. In particular, our operating plan may change and we may require significant additional capital to fund our operations. There are no assurances that our efforts to meet our operating cash flow requirements will be successful. If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations following the issuance of these financial statements, our liquidity, financial condition and business prospects will be materially affected.

Our future funding requirements will depend on many factors as described in Part I, Item 1A, “Risk Factors,” of this Annual Report on Form 10-K.

Contract Obligations and Commitments

As of December 31, 2025, our total future payment obligation related to the outstanding balance of the term loans, excluding interest payments, was $209.9 million, which is due on July 1, 2028. See Note 9. Borrowing for further information on our long-term debt.

We have entered into various operating leases for our offices. As of December 31, 2025, our total undiscounted obligation for operating leases was $5.6 million, with maturities ranging up through July 2029. See Note 11. Leases for further information on our operating leases.

We enter into a variety of contracts in the normal course of business. These contracts generally allow us to terminate on notice, reschedule or adjust our requirements based on our business needs prior to the delivery of goods or performance of services.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are subject to market risks, including interest rate fluctuation exposure through our investments, in the ordinary course of our business. The goals of our investment policy are the preservation of capital, fulfillment of liquidity needs and fiduciary control of cash. To achieve our goal of maximizing income without assuming significant market risk, we maintain our excess cash and cash equivalents in money market funds and short-term debt securities. Because of the short-term maturities of our cash equivalents, we do not believe that a decrease in interest rates would have any material negative impact on the fair value of our cash equivalents.

As of December 31, ~~2024~~2025, we had cash, cash equivalents and short-term investments of $~~250~~264.17 million, which consisted of bank deposits and money market funds, as well as high quality fixed income instruments, including commercial paper, U.S. government-sponsored agency bonds, U.S. treasury securities, corporate bonds, Yankee bonds and asset-backed securities. The credit rating of our short-term investments must be rated A-1/P-1, or better by Standard and Poor’s and Moody’s Investors Service. Asset-backed securities must be rated AAA/Aaa. Money ~~Market~~market funds must be rated AAA/Aaa. Such interest-earning instruments carry a degree of interest rate risk. However, because our investments are high quality and short-term in duration, we believe that our exposure to interest rate risk is not significant and that a 10% movement in market interest rates would not have a significant impact on the total value of our portfolio, as noted above. We do not enter into investments for trading or speculative purposes.

WeThe ~~are~~principal outstanding under our 2022 Loan Agreement is subject to a variable interest rate, ~~fluctuation~~which ~~exposure~~fluctuates ~~through~~with ~~our~~changes ~~borrowings~~in ~~under~~one-month ~~the~~CME ~~2022~~Term ~~Loan~~SOFR ~~Agreement,~~reference ~~which~~rate ~~bear~~as ~~interest~~published atby ~~SOFR~~the ~~plus~~CME aTerm ~~spread~~SOFR ~~based~~Administrator on ~~our~~the ~~public~~CME ~~debt~~Term ~~rating~~SOFR Administrator’s Website. A hypothetical increase in one-month CME Term SOFR of 100 basis points above the current one-month CME Term SOFR rate would have increased our interest expense by approximately $1.08 million for the year ended December 31, ~~2024~~2025. As of December 31, ~~2024~~2025, we had an aggregate principal amount of $~~150~~200.0 million outstanding pursuant to our 2022 Loan Agreement.

Foreign Currency Risk

The majority of our transactions are denominated in U.S. dollars. However, we do have certain transactions that are denominated in currencies other than the U.S. dollar, primarily Swiss francs, Japanese yen and the Euro, and we therefore are subject to foreign exchange risk. The fluctuation in the value of the U.S. dollar against other currencies affects the reported ~~amounts of expenses, non-cash royalty revenue related to the sale of future royalties, assets and liabilities associated with a limited number of manufacturing activities.~~

6167

Table of Co n t e n t s

Weamounts doof ~~not use derivative financial instruments for speculative trading purposes~~expenses, ~~nor~~non-cash doroyalty werevenue ~~hedge~~related ~~foreign~~to ~~currency exchange rate exposure in a manner that entirely offsets~~ the ~~earnings~~sale ~~effects~~ of ~~changes~~future inroyalties, ~~foreign~~assets ~~currency~~and ~~exchange~~liabilities ~~rates.~~associated ~~The~~with ~~counterparties~~a tolimited ~~our~~number ~~forward foreign currency exchange contracts are creditworthy commercial banks, which minimizes the risk~~ of ~~counterparty~~manufacturing ~~nonperformance~~activities.

We do not use derivative financial instruments for speculative trading purposes, nor do we hedge foreign currency exchange rate exposure in a manner that entirely offsets the earnings effects of changes in foreign currency exchange rates. As of December 31, ~~2024~~2025, we had no open forward foreign currency exchange contracts.

6268

Table of Co n t e n t s

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ARDELYX, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			6470
Balance Sheets			6672
Statements of Operations and Comprehensive Loss			6773
Statements of Stockholders’ Equity			6874
Statements of Cash Flows			6975
Notes to Financial Statements			7076

6369

Table of Co n t e n t s

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Ardelyx, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Ardelyx, Inc. (the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, ~~2024~~2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company asat of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2024~~2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, ~~2024~~2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 2019, ~~2025~~2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

6470

Table of Co n t e n t s

Description of the Matter			Estimates of Reserves for Variable Consideration Impacted by Estimated Payor Mix
			As described in Notes 2 and 6 to the financial statements, the transaction price for product sales, net is reduced for estimates of variable consideration related to gross-to-net (“GTN”) adjustments for discounts and chargebacks, rebates, wholesaler and group purchasing organization (“GPO”) fees, copay assistance and returns. Except for certain wholesaler and GPO fees and discounts, which are based on contracts, these adjustments involve estimation and judgment. The GTN adjustments for rebates, copay assistance and chargebacks are impacted by our estimate of payor mix, which requires significant judgment. The Company’s total estimate of reserves for variable consideration was $27.3 million as of December 31, 2024. During 2024, the Company recorded $109.9 million in total reductions to gross product sales for variable consideration.Auditing the Company’s estimates of reserves for variable consideration relating to rebates, copay assistance and chargebacks was especially challenging as it involved evaluation of management’s subjective judgments with respect to payor mix that considers various data sources. The Company has a limited history upon which to base its assumptions, and changes in these assumptions could have a material impact on the reserves recorded for variable consideration.
			As described in Note 2 and 6 to the financial statements, the transaction price for product sales, net is reduced for estimates of variable consideration related to gross-to-net (“GTN”) adjustments for discounts and chargebacks, rebates, wholesaler and group purchasing organization (“GPO”) fees, copay assistance and returns. Except for certain wholesaler and GPO fees and discounts, which are based on contracts, these adjustments involve estimation and judgment. The GTN adjustments for rebates, copay assistance and chargebacks are impacted by the Company’s estimate of payor mix, which requires significant judgment. The Company’s total estimate of reserves for variable consideration was $45.4 million as of December 31, 2025. During 2025, the Company recorded $163.6 million in total reductions to gross product sales for variable consideration.Auditing the Company’s estimates of reserves for variable consideration relating to rebates, copay assistance and chargebacks was especially challenging as it involved evaluation of management’s subjective judgments with respect to payor mix that considers various data sources. The Company has a limited history upon which to base its assumptions, and changes in these assumptions could have a material impact on the reserves recorded for variable consideration.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s process to determine the reserves for variable consideration that are impacted by the payor mix. For example, we tested controls over management’s review of the completeness and accuracy of the data used to determine the estimate. To test the Company’s estimates of reserves for variable consideration relating to rebates, copay assistance and chargebacks, our audit procedures included, among others, evaluating the methodologies and assumptions used and testing the accuracy and completeness of the underlying data used in the Company’s payor mix analysis and the related reserves. We compared the assumptions used by management to third-party industry data and evaluated trends in the data. We also evaluated the reasonableness of changes in estimated reserves during the year and assessed the accuracy of the Company’s estimates against actual results. We also performed sensitivity analyses to determine the effect of changes in management’s payor mix assumptions on the reserves recorded for variable consideration impacted by the payor mix. Further, we evaluated the appropriateness of classification and disclosure of the Company’s reserves for variable consideration in the financial statements.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2009.

Boston, MAMassachusetts

February 2019, ~~2025~~2026

6571

Table of Co n t e n t s

ARDELYX, INC.

BALANCE SHEETS

(in thousands, except share and per share amounts)

	December 31,
	2024		2023
	2025		2024
Assets
Current assets
Cash and cash equivalents	$	6467,~~932~~999	$	2164,~~470~~932
Short-term investments	~~185~~196,~~168~~690		~~162~~185,~~829~~168
Accounts receivable	5771,~~705~~848		2257,~~031~~705
Inventory	2117,~~173~~735		1221,~~448~~173
Prepaid commercial manufacturing	1614,~~378~~479		1816,~~925~~378
Prepaid expenses and other current assets	1113,~~096~~566		811,~~408~~096
Total current assets	~~356~~382,~~452~~317		~~246~~356,~~111~~452
Property and equipment, net	12,~~495~~184		1,~~009~~495
Inventory, non-current	70105,~~011~~372		3770,~~039~~011
Prepaid commercial manufacturing, non-current	—		4,235
Right-of-use assets	4,795		2,380
Right-of-use assets	2,380		5,589
Other assets	6,936		5,416
Other assets	5,416		3,596
Total assets	$	501,604	$	435,754
Total assets	$	435,754	$	297,579
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	1619,~~000~~235	$	1116,~~138~~000
Accrued compensation and benefits	1419,~~940~~108		1214,~~597~~940
Current portion of operating lease liability	1,~~562~~479		41,~~435~~562
Deferred revenue	101,~~686~~206		710,~~182~~686
Accrued expenses and other current liabilities	3447,~~642~~577		1534,~~041~~642
Total current liabilities	7788,~~830~~605		5077,~~393~~830
Operating lease liability, net of current portion	13,~~023~~641		1,~~725~~023
Long-term debt	~~150~~202,~~853~~834		49150,~~822~~853
Deferred revenue, non-current	713,~~232~~699		87,~~644~~232
Deferred royalty obligation related to the sale of future royalties	25,~~527~~876		2025,~~179~~527
Total liabilities	~~262~~334,~~465~~655		~~130~~262,~~763~~465
Commitments and contingencies (Note 19)
Stockholders’ equity
Common stock, $0.0001 par value; 500,000,000 shares authorized; 238,015,825 and 232,453,190 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively.	24		23
Common stock, $0.0001 par value per share; 500,000,000 shares authorized; 244,351,501 and 238,015,825 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively	24		24
Additional paid-in capital	1,~~058~~113,~~548~~666		1,~~012~~058,~~773~~548
Accumulated deficit	(~~885~~946,~~340~~939)		(~~846~~885,~~204~~340)
Accumulated other comprehensive income	57198		~~224~~57
Total stockholders’ equity	~~173~~166,~~289~~949		~~166~~173,~~816~~289
Total liabilities and stockholders’ equity	$	~~435~~501,~~754~~604	$	~~297~~435,~~579~~754

The accompanying notes are an integral part of these financial statements.

6672

Table of Co n t e n t s

ARDELYX, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

	Year Ended December 31,
	2024		2023		2022
	2025		2024		2023
Revenues
Product sales, net	$	~~319~~377,~~196~~808	$	82319,~~526~~196	$	1582,~~600~~526
Product supply revenue	1115,~~649~~879		611,~~121~~649		16,~~527~~121
Licensing revenue	785,088		~~35,809~~78		35,~~031~~809
Non-cash royalty revenue related to the sale of future royalties	28,~~692~~545		—2,692		—
Total revenues	~~333~~407,~~615~~320		~~124~~333,~~456~~615		52124,~~158~~456
Cost of goods sold
Costs and operating expenses
Cost of product sales	6,851		2,323		566
Cost of sales	39,537		50,556		17,795
Other cost of revenue	43,705		15,472		3,551
Research and development	71,527		52,317		35,536
Total cost of goods sold	50,556		17,795		4,117
Selling, general and administrative	337,233		258,692		134,401
Operating expenses
Total costs and operating expenses	448,297		361,565		187,732
Research and development	52,317		35,536		35,201
Loss from operations	(40,977)		(27,950)		(63,276)
Selling, general and administrative	258,692		134,401		76,599
Interest expense	(20,102)		(13,006)		(4,950)
Total operating expenses	311,009		169,937		111,800
Non-cash interest expense related to the sale of future royalties	(8,296)		(7,088)		(3,924)
Loss from operations	(27,950)		(63,276)		(63,759)
Other income, net	8,745		9,174		6,630
Interest expense	(13,006)		(4,950)		(3,400)
Loss before provision for income taxes	(60,630)		(38,870)		(65,520)
Non-cash interest expense related to the sale of future royalties	(7,088)		(3,924)		(1,673)
Provision for income taxes	969		266		547
Other income, net	9,174		6,630		1,633
Net loss	$	(61,599)	$	(39,136)	$	(66,067)
Loss before provision for income taxes	(38,870)		(65,520)		(67,199)
Net loss per share of common stock - basic and diluted	$	(0.26)	$	(0.17)	$	(0.30)
Provision for income taxes	266		547		8
Shares used in computing net loss per share - basic and diluted	241,033,750		235,232,927		219,331,253
Net loss	$	(39,136)	$	(66,067)	$	(67,207)
Net loss per share of common stock - basic and diluted	$	(0.17)	$	(0.30)	$	(0.42)
Shares used in computing net loss per share - basic and diluted	235,232,927		219,331,253		158,690,083
Comprehensive loss
Net loss	$	(3961,~~136~~599)	$	(6639,~~067~~136)	$	(6766,~~207~~067)
Unrealized (losses) gains on available-for-sale securities	(167)		278		(48)
Unrealized gains (losses) on available-for-sale securities	141		(167)		278
Comprehensive loss	$	(3961,~~303~~458)	$	(6539,~~789~~303)	$	(6765,~~255~~789)

The accompanying notes are an integral part of these financial statements.

6773

Table of Co n t e n t s

ARDELYX, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive(Loss) Income		Total Stockholder’ Equity
	Shares	Amount
Balance as of December 31, 2021	130,182,535	$	13	$	795,540	$	(712,930)	$	(6)	$	82,617
Issuance of common stock under employee stock purchase plan	308,356	—		195		—		—		195
Issuance of common stock for services	711,675	—		390		—		—		390
Issuance of common stock upon exercise of options	14,080	—		7		—		—		7
Issuance of common stock upon vesting of restricted stock units	3,243,828	—		—		—		—		—
Issuance of common stock in at-the-market offering	64,114,542	7		71,618		—		—		71,625
Stock-based compensation	—	—		10,750		—		—		10,750
Unrealized losses on available-for-sale securities	—	—		—		—		(48)		(48)
Net loss	—	—		—		(67,207)		—		(67,207)
Balance as of December 31, 2022	198,575,016	$	20	$	878,500	$	(780,137)	$	(54)	$	98,329
Issuance of common stock under employee stock purchase plan	435,708	—		808		—		—		808
Issuance of common stock for services	86,095	—		337		—		—		337
Issuance of common stock upon exercise of options	225,988	—		365		—		—		365
Issuance of common stock upon vesting of restricted stock units	855,642	—		—		—		—		—
Issuance of common stock in at-the-market offering	32,274,741	3		119,233		—		—		119,236
Stock-based compensation	—	—		13,530		—		—		13,530
Unrealized gains on available-for-sale securities	—	—		—		—		278		278
Net loss	—	—		—		(66,067)		—		(66,067)
Balance as of December 31, 2023	232,453,190	$	23	$	1,012,773	$	(846,204)	$	224	$	166,816
Issuance of common stock under employee stock purchase plan	479,609	—		2,227		—		—		2,227
Issuance of common stock for services	40,549	—		257		—		—		257
Issuance of common stock upon exercise of options	2,654,370	1		5,910		—		—		5,911
Issuance of common stock upon vesting of restricted stock units	2,388,107	—		—		—		—		—
Stock-based compensation	—	—		37,381		—		—		37,381
Unrealized losses on available-for-sale securities	—	—		—		—		(167)		(167)
Net loss	—	—		—		(39,136)		—		(39,136)
Balance as of December 31, 2024	238,015,825	$	24	$	1,058,548	$	(885,340)	$	57	$	173,289
Issuance of common stock under employee stock purchase plan	385,593	—		1,718		—		—		1,718
Issuance of common stock for services	87,256	—		315		—		—		315
Issuance of common stock upon exercise of options	1,880,472	—		4,123		—		—		4,123
Issuance of common stock upon vesting of restricted stock units	3,982,355	—		—		—		—		—
Stock-based compensation	—	—		48,962		—		—		48,962
Unrealized gains on available-for-sale securities	—	—		—		—		141		141
Net loss	—	—		—		(61,599)		—		(61,599)
Balance as of December 31, 2025	244,351,501	$	24	$	1,113,666	$	(946,939)	$	198	$	166,949

The accompanying notes are an integral part of these financial statements.

6874

Table of Co n t e n t s

ARDELYX, INC.

STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2024		2023		2022
	2025		2024		2023
Operating activities
Net loss	$	(3961,~~136~~599)	$	(6639,~~067~~136)	$	(6766,~~207~~067)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense	23,~~063~~059		12,~~292~~063		1,~~144~~292
Non-cash lease expense	41,~~008~~947		34,~~624~~008		3,~~457~~624
Stock-based compensation	3748,~~381~~962		1337,~~530~~381		1013,~~750~~530
Non-cash interest expense	78,~~400~~958		47,~~220~~400		14,~~962~~220
Non-cash royalty revenue related to the sale of future royalties	(28,~~692~~545)		—(2,692)		—
Gain on sale of equipment	—		—		(1,260)
Other, net	(3,913)		(4,664)		(2,930)
Other, net	(4,664)		(2,930)		685
Changes in operating assets and liabilities
Accounts receivable	(3514,~~674~~143)		(1435,~~298~~674)		(714,~~231~~298)
Inventory	(4131,~~697~~923)		(2141,~~141~~697)		(2821,~~346~~141)
Prepaid commercial manufacturing	61,~~782~~899		(96,~~593)~~782		(49,~~161~~593)
Prepaid expenses and other assets	(4,~~543~~293)		(64,~~035~~543)		2(6,~~299~~035)
Accounts payable	43,~~862~~235		~~279~~4,862		~~6,582~~279
Accrued compensation and benefits	24,~~343~~168		52,~~049~~343		25,~~126~~049
Operating lease liabilities	(41,~~588~~827)		(34,~~928~~588)		(3,~~491~~928)
Accrued and other liabilities	2114,~~254~~545		321,~~691~~254		43,~~138~~691
Deferred revenue	2(3,~~092~~013)		2,~~590~~092		82,~~509~~590
Net cash used in operating activities	(4442,~~809~~483)		(8944,~~717~~809)		(7089,~~044~~717)
Investing activities
Proceeds from maturities and redemptions of investments	~~177~~211,~~854~~456		84177,~~321~~854		6784,~~000~~321
Purchases of investments	(~~195~~218,~~161~~923)		(~~215~~195,~~225~~161)		(50215,~~328~~225)
Proceeds from sale of property and equipment	—		—		1,798
Purchases of property and equipment	(1,492)		(1,011)		(344)
Purchases of property and equipment	(1,011)		(344)		(55)
Net cash used in investing activities	(8,959)		(18,318)		(131,248)
Net cash (used in) provided by investing activities	(18,318)		(131,248)		18,415
Financing activities
Proceeds from issuance of common stock in at the market offering, net of issuance costs	—		~~119,236~~—		71119,~~625~~236
Proceeds from 2022 Loan Agreement, net of issuance costs	99,451		22,386		26,971
Proceeds from 2022 Loan Agreement, net of costs	48,668		99,451		22,386
Proceeds from the sale of future royalties, net of issuance costs	—		~~5,000~~—		95,~~581~~000
Proceeds from issuance of common stock under equity incentive and stock purchase plans	8,138		1,173		202
Proceeds from issuance of common stock under equity incentive plans	5,841		8,138		1,173
Payment of the exit fees	(1,000)		(1,500)		—
Payments of the previously outstanding exit fees	—		(1,000)		(1,500)
Payments for the 2018 Loan, net of costs	—		—		(33,038)
Net cash provided by financing activities	54,509		106,589		146,295
Net cash provided by financing activities	106,589		146,295		75,341
Net increase (decrease) in cash and cash equivalents	3,067		43,462		(74,670)
Net increase (decrease) in cash and cash equivalents	43,462		(74,670)		23,712
Cash and cash equivalents at beginning of period	64,932		21,470		96,140
Cash and cash equivalents at beginning of period	21,470		96,140		72,428
Cash and cash equivalents at end of period	$	67,999	$	64,932	$	21,470
Cash and cash equivalents at end of period	$	64,932	$	21,470	$	96,140
Supplementary disclosure of cash flow information
Cash paid for interest	$	1115,~~408~~717	$	411,~~240~~408	$	24,~~901~~240
Cash paid for income taxes	$	~~266~~485	$	51266	$	651
Supplementary disclosure of non-cash activities
Right-of-use assets obtained in exchange for lease obligations	$	14,~~010~~362	$	~~339~~1,010	$	—339
Issuance of common stock for services	$	~~257~~315	$	~~337~~257	$	~~390~~337
Issuance of derivative in connection with issuance of loan payable	$	—	$	—	$	375

The accompanying notes are an integral part of these financial statements.

6975

Table of Co n t e n t s

ARDELYX, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1. NATURE OF OPERATIONS

We are a commercial-stage biopharmaceutical company ~~founded~~focused ~~with~~on athe ~~mission~~development ~~to discover, develop~~ and ~~commercialize~~commercialization of innovative, ~~first-in-class~~ medicines that meet significant unmet medical needs. We ~~developed~~currently amarket ~~unique~~two ~~and~~therapies ~~innovative~~from ~~platform that enabled~~ the ~~discovery~~active ofingredient ~~new~~tenapanor, ~~biological~~an ~~mechanisms~~NHE3 ~~and~~inhibitor ~~pathways to develop potent and efficacious therapies~~ that ~~minimize~~was ~~the~~discovered ~~side effects~~ and ~~drug-drug~~developed ~~interactions~~by ~~frequently~~Ardelyx. ~~encountered~~NHE3 ~~with~~is ~~traditional,~~an ~~systemically~~antiporter ~~absorbed~~expressed ~~medicines.~~on ~~The~~the ~~first~~apical ~~molecule~~surface weof ~~discovered~~the small and ~~developed~~large ~~was~~intestines. ~~tenapanor,~~Tenapanor is a minimally absorbed, first-in-class, oral, small molecule therapy. Tenapanor, branded as IBSRELA®, is approved in the U.S. for the treatment of adults with IBS-C. Tenapanor, branded as XPHOZAH®, is approved in the U.S. to reduce serum phosphorus in adults with CKD on dialysis as add-on therapy in patients who have an inadequate response to phosphate binders or who are intolerant of any dose of phosphate binder therapy.

Tenapanor, branded as IBSRELA®, is approved in the U.S. for the treatment of adults with irritable bowel syndrome with constipation. We believe that IBSRELA can bring meaningful benefit to the approximately 13 million Americans who suffer from the symptoms of IBS-C, many of whom continue to experience symptoms despite intervention with other therapies. We are seeking to further expand the IBSRELA eligible patient population to include patients with CIC, and have initiated a Phase 3 clinical trial evaluating tenapanor in adult CIC patients.

In addition to commercializing IBSRELA and XPHOZAH, we are also developing a next-generation NHE3 inhibitor that we believe can have application across multiple therapeutic areas.

We operate in one business segment, which is the development and commercialization of biopharmaceutical products. Refer to Note 17. Segment Reporting for further segment reporting information.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in accordance with ~~accounting principles generally accepted in the United States of America (~~U.S. GAAP). Certain prior year amounts have been reclassified to conform to the current year presentation on the statements of operations and comprehensive loss to include the “cost of product sales” and the “other cost of revenue” captions within the “cost of sales” caption. This reclassification had no effect on the previously reported results of operations. Prior to the end of the 2025 second quarter, the “other cost of revenue” caption was primarily comprised of royalty expenses recognized under the AstraZeneca Termination Agreement. As of the end of the 2025 second quarter, the maximum $75.0 million royalty obligation under this agreement had been fully recognized.

Refer to the Summary of Abbreviated Terms at the end of this Annual Report on Form 10-K for definitions of terms used throughout the document.

Use of Estimates

The preparation of financial statements requires management to make estimates, judgments and assumptions. ~~The~~Significant ~~most~~estimates ~~significant~~include ~~assumptions~~those ~~are estimates~~ used in our revenue gross-to-net ~~accruals~~adjustments and other ~~assumptions~~estimates. Management bases its estimates on historical experience and on various ~~other market-specific and~~ relevant assumptions that management believes to be reasonable under the circumstances. Actual results could materially differ from those estimates.

Cash ~~and Cash~~ Equivalents

Cash ~~and cash~~ equivalents consist of highly liquid investments purchased with an original maturity date of 90 days or less and are recognized at cost, which approximates fair value.

Table of Co n t e n t s

Short-Term Investments

Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than one year, from the date of acquisition. Short-term investments are carried at fair value based upon quoted market prices or other observable market data. Unrealized gains (losses) ~~gains~~ on available-for-sale securities are included in accumulated other comprehensive income on our balance sheets. The cost of available-for-sale securities sold is based on the specific-identification method.

Marketable debt securities are reviewed for impairment by determining whether the decline in their market value below carrying value is other-than-temporary. This assessment considers the intent and ability to retain the investment for a period of time sufficient for an anticipated recovery in market value,; the duration and extent that the market value has been below cost,; and the investee’s financial condition. Other-than-temporary impairments and credit losses are recorded in the statements of operations and comprehensive loss.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. We are exposed to credit risks in the event of default by the counterparties to the extent of the amount recorded in our balance sheets. Cash, cash equivalents and short-term investments are invested through banks and other financial institutions in the U.S.

Table of Contents

Foreign Currency

Our business is conducted in U.S. dollars; however, a portion of our expense and capital activities are transacted in foreign currencies which are subject to exchange rate fluctuations that can affect cash or earnings. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. All gains and losses on these foreign currency transactions are recorded inas other income, net inon our statements of operations and comprehensive loss.

Property and Equipment

Expenditures for property and equipment are capitalized at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, ranging from three to five years for laboratory equipment and office equipment and furniture. Leasehold improvements are amortized over the lesser of the estimated useful lives or the related remaining lease term.

Impairment of Long-Lived Assets

The carrying values of long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future undiscounted cash flows, expected to result from the use of the asset and its eventual disposition, ~~are~~is less than the asset’s carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value.

Income Taxes

The asset and liability method of accounting is used for income taxes. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to ~~reverse~~be reversed. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized.

Accounts Receivable

Accounts receivable are stated at amortized cost less allowance for credit losses. ~~The~~An allowance for credit losses reflects our best estimate of future credit losses over the contractual life of outstanding accounts receivable ~~and~~under the assumption that the current conditions as of the balance sheet date do not change for the remaining life of the asset. An allowance for credit losses is determined based on ~~the~~various ~~basis~~factors, ofsuch as historical experience, specific allowances for known troubled accounts, ~~other~~customers’ ~~currently available information including customer~~ financial condition and both current and forecasted economic conditions. To date, we have determined that an allowance for doubtful accounts is not required. As of December 31, ~~2024~~2025, our accounts receivable balance was comprised of $5666.74 million from commercial customers and $15.04 million from our collaboration partners. As of December 31, ~~2023~~2024, our accounts ~~receivable balance was comprised of $17.1 million from commercial customers and $4.9 million from our collaboration partners.~~

Table of Co n t e n t s

receivable balance was comprised of $56.7 million from commercial customers and $1.0 million from our collaboration partners.

Inventory

Inventory costs incurred are capitalized after regulatory approval, or if based on management’s judgment, future commercialization is considered probable and future economic benefit is expected to be realized. We began to capitalize inventory costs associated with IBSRELA during the 2021 fourth quarter ~~of 2021~~, when our intent to commercialize IBSRELA was established and we commenced preparation for the launch of IBSRELA. We began to capitalize inventory costs associated with XPHOZAH during the 2023 fourth quarter ~~of 2023~~, following approval by the ~~U.S.~~ FDA to market XPHOZAH in the U.S. Inventory costs incurred prior to regulatory approval were expensed as research and development.

Inventories are stated at the lower of cost or estimated net realizable value with cost determined under the specific identification method. A portion of inventory that represents product that is not expected to be sold or used within the next 12 months is classified as non-current assets onin our balance sheets.

Revenue Recognition

71Product Sales, Net

We apply the ASC 606 five-step process above to the contracts with our Customers. Product revenue is recognized when Customers take control of the product, which typically occurs upon delivery to the Customers. The transaction price for product sales is reduced for estimates of variable consideration related to (i) discounts and chargebacks, (ii) rebates, wholesaler and GPO fees, and (iii) copay assistance and returns (collectively, gross-to-net adjustments or GTN adjustments). Except for certain wholesaler and GPO fees and discounts, which are based on contracts, our estimates of GTN adjustments involve assumptions and judgments. Our estimates of GTN adjustments for rebates, copay assistance and chargebacks require significant assumptions and judgments, considering factors such as legal interpretations of applicable laws and regulations, historical experience, payor mix (e.g., Medicare or Medicaid), current contract prices under applicable programs, unbilled claims, processing time lags and inventory levels in the distribution channel.

Estimates are assessed each period and adjusted as required to revise information or actual experience.

Collaboration and Licensing Revenue

Our collaboration and licensing arrangements may include the grant of licenses for use of our intellectual property and manufacturing supply services. Considerations for such arrangements may include non-refundable upfront license fees; payments based upon the achievement of development, regulatory, or commercialization milestones; payments for manufacturing supply services; and future royalties on net sales of licensed products. We perform the ASC 606 five-step process above to determine the appropriate amount of revenue to be recognized under our collaboration and licensing arrangements. For performance obligations that are satisfied over time, we recognize revenue using an input or output measure of progress that best depicts the satisfaction of the relevant performance obligation.

We evaluate performance obligations by assessing whether promised goods or services are both (i) capable of being distinct and (ii) distinct in the context of the arrangement. Goods or services that meet these criteria are considered distinct performance obligations. Judgment is required to determine whether promised goods or services represent distinct performance obligations. We estimate the transaction price based on expected consideration, which may include fixed or variable consideration. At the inception of each arrangement that includes variable consideration, we evaluate the amount of potential transaction price and the likelihood that the transaction price will be received. The amount of variable consideration that is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events.

Table of Co n t e n t s

~~Product~~Licensing ~~Sales, Net Recognition~~Revenue:

~~The~~•Non-refundable ~~transaction~~upfront ~~price~~license ~~for~~fees: ~~product~~For ~~sales,~~arrangements ~~net~~that isinclude ~~reduced~~a ~~for~~license ~~estimates~~ of ~~variable~~intellectual ~~consideration related to GTN adjustments for discounts and chargebacks~~property, ~~rebates, wholesaler~~ and ~~GPO~~it ~~fees,~~is ~~copay~~determined ~~assistance~~to ~~and~~be ~~returns.~~distinct ~~Except~~from ~~for~~the ~~certain~~other ~~wholesaler~~performance ~~and~~obligations ~~GPO~~identified ~~fees~~in ~~and~~the ~~discounts~~arrangement, ~~which~~we ~~are~~recognize ~~based~~the ontransaction ~~contracts,~~price ~~these~~allocated ~~adjustments~~to ~~involve~~the ~~estimation~~license ~~and~~as ~~judgment.~~licensing ~~The~~revenue ~~GTN~~upon ~~adjustments~~transfer ~~for rebates, copay assistance and chargebacks are impacted by our estimate~~ of ~~payor~~control ~~mix, which requires significant judgment. We consider legal interpretations~~ of ~~applicable laws and regulations, historical experience, current contract prices under applicable programs, unbilled claims, processing time lags and inventory levels in~~ the ~~distribution channel in determining our estimates~~license.

~~Estimates~~•Milestone payments: Contingent milestones at contract inception are ~~assessed~~estimated at the amount which is not probable of a material reversal and included in the transaction price using the most likely amount method. Milestone payments that are not within our control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore, the variable consideration is constrained. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such contingent milestones and ~~adjusted~~any asrelated ~~required~~constraints, toand ~~revise~~if ~~information~~necessary, oradjust ~~actual~~our ~~experience~~estimate of the overall transaction price. ~~Changes~~Any insuch ~~estimates~~adjustments are recorded ~~through~~on ~~December 31~~a cumulative catch-up basis, ~~2024~~which ~~have~~would ~~not~~affect ~~been~~earnings ~~material~~in the period of adjustment.

~~Licensing~~•Royalties: ~~Revenue~~For ~~Recognition~~arrangements that include sales-based royalties and a license of intellectual property that is deemed to be the predominant item to which the royalties relate, revenue is recognized at the later of when the related sales occur or when the performance obligation to which some or all of the royalties have been allocated has been satisfied (or partially satisfied). To date, royalty revenue resulting from licensing arrangements has not been material.

~~Licensing~~Product ~~revenue~~Supply ~~and~~Revenue: ~~product~~For ~~supply~~arrangements ~~revenue~~that ~~result~~include ~~from~~a ~~our~~promise ~~collaboration~~for ~~and~~the ~~licensing~~future ~~agreements~~supply asof ~~discussed~~drug insubstance ~~Note~~or 7.drug ~~Collaboration~~product ~~And~~for ~~Licensing~~either ~~Agreements.~~clinical ~~Goods~~development ~~and~~or ~~services~~commercial insupply ~~these~~at ~~agreements may include~~ the ~~grant~~customer’s ofdiscretion ~~licenses~~(manufacturing ~~for~~supply ~~use~~services), ~~of our intellectual property~~ and ~~manufacturing~~it ~~services. Significant judgment~~ is ~~required~~determined to ~~determine~~be ~~whether~~distinct ~~promised~~from ~~goods~~the ~~and~~other ~~services~~performance ~~represent~~obligations ~~distinct~~identified ~~performance~~in ~~obligations~~the arrangement, ~~which~~we ~~are~~recognize ~~identified~~the ~~and~~transaction ~~separated~~price ~~when~~allocated to the ~~other~~manufacturing ~~party~~supply ~~can~~services ~~benefit~~as ~~from~~product ~~the~~supply ~~rights,~~revenue ~~goods~~upon ortransfer ~~services~~of ~~either~~control onof ~~their~~the ~~own~~product orto ~~together~~the ~~with~~customer, ~~other~~which ~~readily~~is ~~available~~upon ~~resources~~delivery. ~~and~~Advanced ~~when~~payments from customers for the ~~rights,~~manufacturing ~~goods~~of ordrug ~~services~~substance are ~~not~~recognized ~~highly~~as ~~interdependent~~deferred orrevenue ~~interrelated~~until delivery.

~~Transaction prices for these arrangements may include non~~Non-~~refundable,~~Cash ~~up-front~~Royalty ~~license~~Revenue ~~fees;~~Related research, development, regulatory and commercial milestone payments; payments for manufacturing supply services; and future royalties on net sales of licensed products. Variable consideration is included in the transaction price only to the ~~extent~~Sale ~~significant reversal~~ of ~~cumulative~~Future ~~revenue~~Royalties: ~~recognized~~Royalties isand ~~not~~commercialization ~~probable~~milestones ofearned ~~occurring~~from ~~when~~Kyowa ~~the~~Kirin ~~uncertainty~~are ~~associated~~recorded ~~with~~as ~~the~~non-cash ~~variable~~royalty ~~consideration is subsequently resolved~~revenue. ~~Significant~~As ~~judgment~~discussed ~~is required~~ in ~~estimating~~Note ~~variable consideration for each performance obligation identified in the contract~~8. ~~This~~Deferred ~~judgment~~Royalty ~~involves~~Obligation ~~assessing~~Related ~~factors~~to ~~outside of our influence, including market conditions, development timelines, likelihood of regulatory success, reimbursement rates for personnel costs, forecasted revenues, potential limitations on~~ the ~~selling~~Sale ~~price~~ of ~~the~~Future ~~product~~Royalties, ~~discount~~future ~~rates,~~royalties ~~lack of relevant past experience~~ and acommercialization ~~large~~milestone ~~number~~payments ~~and~~we ~~broad~~may ~~range~~receive ofunder ~~possible amounts. The most likely amount method is used to estimate contingent development, regulatory and sales-based milestones because~~ the ~~ultimate~~Kyowa ~~outcomes~~Kirin ~~are~~Agreement ~~binary~~will inbe ~~nature.~~remitted ~~The expected value method is used~~ to ~~estimate~~HCR ~~royalties~~pursuant ~~because a broad range of potential outcomes exists, except in instances where the royalties relate~~ to ~~a license. For arrangements with multiple separable performance obligations,~~ the ~~transaction~~HCR ~~price assigned to each distinct performance obligation is reflective on the relative stand-along selling price and recognized at a point in time upon the transfer of control~~Agreement.

Collaboration agreements typically include: (i) licensing intellectual property to a third party with no further performance obligations and (ii) arrangements that include both a license and an additional performance obligation to supply product upon the request of the third party. Out-licensing arrangements that contain a single performance obligation are satisfied upon execution of the agreement, when development and commercialization rights are transferred to a third party. Upfront fees are immediately recognized as licensing revenue. Contingent development and regulatory milestones are assessed each period for likelihood of achievement, however, they are typically constrained and recognized when uncertainty is subsequently resolved for the full amount of the milestone and included in licensing revenue. Licensing revenue also includes sales-based milestones and royalties, which are recognized when the milestone is achieved or when the subsequent sales occur.

Certain collaboration agreements also include contingent performance obligations to supply commercial product to the third party upon its request. The license and supply obligations are accounted for as separate distinct performance obligations as the third party can benefit from the license either on its own or together with the other supply resources readily available to it and the other obligations in the contract. Consideration for the supply obligation is based upon stipulated cost-plus margin contractual terms which represent a standalone selling price. The supply consideration is recognized as product supply revenue at a point in time upon transfer of control of the product to the third party. After considering the stand-alone selling price of these supply arrangements, the upfront fees, contingent development, regulatory and sales-based milestones and royalties are allocated to the license.

When two or more contracts are entered into with the same customer at or near the same time, we evaluate the contracts to determine whether the contracts should be accounted for as a single arrangement. Contract modifications due to the addition of distinct promised goods or services with price increases consistent with stand-alone selling prices are accounted for as a separate contract. Contract modifications that are not considered a separate contract and containing remaining goods or services distinct from the goods or services transferred on or before the date of the contract modification are accounted for as a termination of the existing contract and the subsequent creation of a new contract. Contract modifications not considered a

Table of Contents

separate contract and containing remaining goods or services not distinct are accounted for as an add-on to the existing contract and as an adjustment to revenue on a cumulative catch-up basis.

Accrued Expenses

As part of the process of preparing our financial statements, we are required to estimate our accrued expenses, which involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. The majority of our service providers invoice us monthly in arrears for services performed or when contractual milestones are met. We ~~make~~estimate ~~estimates of~~ our accrued expenses as of each balance sheet date based on facts and circumstances known to us at that time. We periodically confirm the accuracy of our estimates with our service providers and make adjustments if necessary.

Service fee accruals are estimated based on the period over which each component of service will be performed, with vendor input if appropriate. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrued or prepaid expense balance, accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing may differ from the actual status and timing of services performed~~, we may report amounts that are too high or too low in any particular period~~.

Retirement Savings Plan

We offer retirement saving plans through our 401(k) plan, which is available to all full-time employees. In June 2023, we expanded the benefit with the inclusion of a company matching contribution. We contribute to tax-qualified retirement plans for the benefit of employees who meet certain eligibility requirements and choose to participate in the plans. Participating employees specify the percentage of salary they wish to contribute from their compensation, and we make matching contributions. We recognized compensation costs from our contributions of $1.4 million, $1.1 million and $0.2 million in 2025, 2024 and 2023, respectively.

Stock-Based Compensation

Stock-based compensation expense is recognized for all stock-based payment awards made to employees, non-employees and directors based on estimated fair values. The grant date fair value of the awards is determined using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period ~~and is reduced for estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.~~

~~Non-cash Interest Expense on Deferred Royalty Obligation~~ 79

~~Non-cash~~Table ~~interest expense related to the sale~~ of ~~future royalties represents imputed interest expense on our deferred royalty obligation related to the sale of future royalties using the effective interest method.~~Contents

and is reduced for estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Non-Cash Interest Expense on Deferred Royalty Obligation

In connection with the HCR Agreement, as discussed further in Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties, we recorded a liability related to the sale of future royalties and commercialization milestones that is amortized using the effective interest method over the estimated life of the HCR Agreement. As a result, we impute interest on proceeds received from HCR and record non-cash interest expense at the effective interest rate derived from estimated amounts and timing of future royalties and commercialization payments expected to be received by HCR.

Leases

Operating leases are included in right-of-use assets, current portion of operating lease liability, and operating lease liability, net of current portion on our balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, we use our incremental borrowing rate based on information available at the lease commencement date. Operating lease right-of-use assets also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate a lease when it is reasonably certain that we will exercise any such option. Leases with an initial term of 12 months or less are not recorded on the balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. We have elected not to separate lease and non-lease components, such as common area maintenance charges, and instead account for these as a single lease component.

Net Loss per Share

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potential shares of common stock. Diluted net loss per common share in the periods presented is the same as basic net loss per common share because the effects of potentially dilutive securities are antidilutive due to net ~~loses~~losses recognized for each period presented.

Table of Contents

Recent Accounting Pronouncements

New Accounting Pronouncements - Recently Adopted

In ~~November~~December 2023, the FASB issued ASU No. 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740) - Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures. ~~This~~The ~~Update~~ASU ~~requires~~provides ~~publicly~~additional ~~traded~~transparency ~~entities~~within tothe ~~provide~~income ~~enhanced~~tax disclosures, ~~about~~primarily ~~significant~~related ~~segment~~to ~~expenses regularly reviewed by~~ the ~~chief~~rate ~~operating~~reconciliation ~~decision maker, including publicly traded entities with a single reportable segment. The amendments in this update were effective for fiscal years beginning after December 15, 2023,~~ and ~~interim~~income ~~periods~~taxes ~~within~~paid ~~fiscal years beginning after December 15, 2024~~information. We adopted ~~the~~ ASU 2023-09 retrospectively in the 2025 fourth quarter ~~of 2024~~ and determined that ~~its~~the adoption did not have a material impact on our financial statements. Refer to ~~Note~~the ~~17.~~related ~~Segment~~disclosures ~~Reporting~~presented ~~for~~in ~~additional~~Note ~~information~~16. Income Taxes.

Recent Accounting Pronouncements Not Yet Adopted

In ~~December~~November ~~2023~~2024, the FASB issued ASU No. ~~2023~~2024-0903, Income ~~Taxes~~Statement (Topic ~~740~~220) - ~~Improvements~~Reporting toComprehensive Income ~~Tax~~- Expense Disaggregation Disclosures, anDisaggregation ~~amendment which modifies the measurement and recognition~~ of ~~credit~~Income ~~losses~~Statement ~~for~~Expenses, ~~most~~which ~~financial~~requires ~~assets~~public ~~and~~companies ~~certain~~to ~~other~~disclose, ~~instruments. The amendments~~ in ~~this~~interim ~~Update~~and ~~provide~~annual ~~more~~reporting ~~transparency~~periods, ~~about~~additional ~~income tax~~ information ~~through~~about ~~improvements~~certain toexpenses ~~income~~in ~~tax disclosures primarily related to~~ the ~~rate~~financial ~~reconciliation and income taxes paid information~~statements. ~~For~~The ~~public~~new ~~business~~disclosure ~~entities,~~requirements ~~the amendments in this Update~~ are effective for our annual periods beginning ~~after~~January ~~December~~1, 152027, ~~2024.~~and ~~Early~~interim ~~adoption~~periods isbeginning ~~permitted~~January on1, a2028, ~~prospective~~with ~~basis~~early ~~for~~adoption ~~annual~~permitted, ~~financial~~and ~~statements~~may ~~that~~be ~~have~~applied ~~not~~either ~~yet~~prospectively ~~been issued~~ or ~~made~~retrospectively. ~~available~~We ~~for~~are ~~issuance.~~in ~~Management~~the isprocess ~~currently~~of ~~assessing~~evaluating the impact of this ~~standard~~new guidance on our ~~financial statements~~disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement (Topic 220) - Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses, which requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial statements. ASU No. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. Management is currently assessing the impact of this standard on our financial statements.80

NOTE 3. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Securities classified as cash, cash equivalents and short-term investments as of December 31, 2024 and 2023 were as follows:

	December 31, 2024
			Gross Unrealized
(in thousands)	Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents
Cash	$	16,282	$	—	$	—	$	16,282
Money market funds	48,650		—		—		48,650
Total cash and cash equivalents	64,932		—		—		64,932
Short-term investments
U.S. treasury securities	$	79,720	$	58	$	(5)	$	79,773
U.S. government-sponsored agency bonds	45,960		29		(27)		45,962
Commercial paper	37,061		19		(15)		37,065
Corporate bonds	17,415		4		(6)		17,413
Asset-backed securities	2,983		2		—		2,985
Yankee bonds	1,972		—		(2)		1,970
Total short-term investments	185,111		112		(55)		185,168
Total cash, cash equivalents and investments	$	250,043	$	112	$	(55)	$	250,100

Table of Co n t e n t s

	December 31, 2023
			Gross Unrealized
(in thousands)	Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents
Cash	$	2,829	$	—	$	—	$	2,829
Money market funds	18,641		—		—		18,641
Total cash and cash equivalents	21,470		—		—		21,470
Short-term investments
U.S. government-sponsored agency bonds	$	101,892	$	235	$	(34)	$	102,093
Commercial paper	49,630		41		(17)		49,654
Asset-backed securities	8,628		2		(5)		8,625
U.S. treasury securities	2,455		2		—		2,457
Total short-term investments	162,605		280		(56)		162,829
Total cash, cash equivalents and investments	$	184,075	$	280	$	(56)	$	184,299

NOTE 3. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

~~Realized~~The ~~gains~~following ortable ~~losses~~summarizes ~~have~~our ~~not been significant and are included in other income~~cash, ~~net,~~cash inequivalents ~~our statements of operations~~ and ~~comprehensive~~short-term ~~loss.~~investments:

Unrealized losses in 2024 and 2023 were not material. We determined that none of our available-for-sale securities were other-than-temporarily impaired as of December 31, 2024 and 2023, and no investment was in a continuous unrealized loss position for more than one year. Therefore, we believe that it is more likely than not that the investments will be held until maturity or a forecasted recovery of fair value.


	December 31, 2025								December 31, 2024
			Gross Unrealized								Gross Unrealized
(in thousands)	Amortized Cost		Gains		Losses		Fair Value		Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents
Cash	$	18,569	$	—	$	—	$	18,569	$	16,282	$	—	$	—	$	16,282
Money market funds	49,430		—		—		49,430		48,650		—		—		48,650
Total cash and cash equivalents	67,999		—		—		67,999		64,932		—		—		64,932
Short-term investments
U.S. treasury securities	$	95,052	$	105	$	—	$	95,157	$	79,720	$	58	$	(5)	$	79,773
Commercial paper	46,421		32		(3)

Filing Compare · ARDELYX, INC.