Unless the context requires otherwise, in this Quarterly Report on Form 10-Q the terms “Ardelyx”, “we,” “us,” “our” and “the Company” refer to Ardelyx, Inc.

This Quarterly Report on Form 10-Q 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:

There are no assurances that our efforts to meet our operating cash flow requirements will be successful. If our current cash and investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations for at least the next twelve months following the issuance of these financial statements, ~~the Company is required to estimate its accrued expenses. This process involves reviewing open contracts~~our liquidity, financial condition and ~~purchase orders, communicating with its personnel to identify services that~~business prospects will be materially affected. These financial statements have been ~~performed~~prepared on ~~its behalf~~a going concern basis and ~~estimating~~do not include any adjustments to the ~~level~~amounts and classification of ~~service performed~~assets and liabilities that may be necessary in the ~~associated cost incurred~~event that we can no longer continue as a going concern.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:

The following table sets forth the fair value of ~~the Company’s~~our financial assets and liabilities that are measured or disclosed on a recurring basis by level within the fair value hierarchy (in thousands):

   September 30, 2017
   Total    Level 1    Level 2    Level 3
Assets:

Money market funds
   $ 44,155    $ 44,155    $ —      $ —
U.S. treasury securities
   4,787    4,787    —      —
U.S. government-sponsored agency bonds
   1,800    1,800    —      —
Corporate bonds
   40,485    —      40,485    —
Commercial paper
   23,580    —      23,580    —
Asset-backed securities
   7,227    —      7,227    —








Total
   $ 122,034    $ 50,742    $ 71,292    $ —








   December 31, 2016
   Total    Level 1    Level 2    Level 3
Assets:

Money market funds
   $ 68,561    $ 68,561    $ —      $ —
Corporate bonds
   58,410    —      58,410    —
Commercial paper
   65,330    —      65,330    —
Asset-backed securities
   4,884    —      4,884    —








Total
   $ 197,185    $ 68,561    $ 128,624    $ —

Where quoted prices are available in an active market, securities are classified as Level 1. ~~The Company classifies~~We classify money market funds ~~U.S. treasury securities and U.S. government-sponsored agency bonds~~ as Level 1. When quoted market prices are not available for the specific security, ~~then the Company estimates~~we estimate fair value by using benchmark yields, reported trades, broker/dealer quotes and issuer spreads. ~~The Company classifies~~We classify U.S. government-sponsored agency bonds, U.S. treasury notes, corporate bonds, commercial paper, and asset-backed securities as Level 2. In certain cases, where there is limited activity or less transparency around inputs to valuation, securities or derivative liabilities, such as the Exit Fee, as defined and discussed in Note 8, are classified as Level 3. ~~There were no transfers between Level 1 and Level 2 during the periods presented.~~

The carrying amounts reflected in the balance sheets for cash equivalents, short-term investments, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at ~~September 30, 2017~~both March 31, 2022 and December 31, ~~2016,~~2021, due to their short-term nature.

The interest rate of our term loan facility approximates the rate at which we could obtain alternative financing. Therefore, the carrying amount of the term loan facility approximated its fair value at March 31, 2022 and December 31, 2021.

On May 16, 2018, we entered into a loan and security agreement (as amended on October 9, 2020, March 1, 2021, May 5, 2021, and July 29, 2021) (the "2018 Loan Agreement") with Solar Capital Ltd. and Western Alliance Bank (collectively the “2018 Lenders”). The 2018 Loan Agreement provided for a $50.0 million loan facility with a maturity date of November 1, 2022 (the “2018 Loan”). As of the Closing Date for the 2022 Loan, as discussed below, we owed $25.0 million in principal payments from the 2018 Loan, which we repaid in full at that time.

On February 23, 2022 (the “Closing Date”), we entered into a loan and security agreement (the “2022 Loan Agreement”) with SLR Investment Corp. as collateral agent (the “Agent”), and the lenders listed in the 2022 Loan Agreement (collectively the “2022 Lenders”). The 2022 Loan Agreement provides for a senior secured loan facility, with $27.5 million (the “Term A Loan”) funded on the Closing Date and an additional $22.5 million that we may borrow on or prior to July 25, 2023; provided that (i) we have received approval by the FDA for our NDA for the control of serum phosphorus in chronic kidney disease patients on dialysis by December 31, 2022, and (ii) we have achieved certain product revenue milestone targets described in the 2022 Loan Agreement (the “Term B Loan”, and collectively, the Term A Loan and the Term B Loan, the “2022 Loan”). The 2022 Term A Loan funds were used to repay the 2018 Loan with the 2018 Lenders. The 2022 Loan has a maturity date of March 1, 2027.

Borrowings under the 2022 Loan bear interest at a floating per annum rate equal to 7.95% plus the greater of (i) one tenth percent (0.10%) and (ii) the one-month rate published by the Intercontinental Exchange Benchmark Administration Ltd or its successor. We are permitted to make interest-only payments on the 2022 Loan through March 31, 2024. Accordingly, beginning on April 1, 2024, we will be required to make monthly payments of interest plus repay the 2022 Loan in consecutive equal monthly installments of principal. We were obligated to pay $0.2 million, upon the closing of the Term A Loan, and we are obligated to pay $0.1 million on the earliest of (i) the funding date of the Term B Loan, (ii) July 25, 2023, and (iii) the prepayment, refinancing, substitution, or replacement of the Term A Loan on or prior to July 25, 2023. We are obligated to pay a final fee equal to 4.95% of the aggregate original principal amount of the 2022 Loan funded upon the earliest to occur of the maturity date, the acceleration of the 2022 Loan, and the prepayment, refinancing, substitution, or replacement of the 2022 Loan. We may voluntarily prepay the outstanding 2022 Loan balance, subject to a prepayment premium of (i) 3% of the

The 2022 Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, 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 or to redeem capital stock. We have agreed to not allow our cash and cash equivalents to be less than the eighty percent (80%) of the outstanding 2022 Term Loan balance for any period in which our net revenue from the sale of any products, calculated on a trailing six (6) month basis and tested monthly, is less than sixty percent (60%) of the outstanding 2022 Loan balance.

As of March 31, 2022, our future payment obligations related to the 2022 Loan, excluding interest payments and the 2022 final fee, are as follows (in thousands):

Basic net loss per share is calculated by dividing net loss by the ~~three~~weighted-average number of common shares outstanding during the period, less shares subject to repurchase, and ~~nine months ended September 30, 2017, employees exercised options~~excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per common share is computed giving effect to ~~purchase 4,833 and 33,159~~all potential dilutive common shares, ~~respectively, of the Company’s~~including common stock ~~with insignificant~~issuable upon exercise of stock options, and unvested restricted common stock and stock units. As we had net ~~proceeds in~~losses for the three months ended ~~September 30, 2017,~~March 31, 2022 and 2021, all potential common shares were determined to be anti-dilutive.

The following table sets forth the computation of net ~~proceeds to the Company of approximately $0.1 million in the nine months ended September 30, 2017.~~

~~Restricted Stock Units~~

loss per common share (in thousands, except per share amounts):

Our unique discovery platform and deep understanding of the primary mechanism of sodium transport in the intestine resulted in our discovery and development of IBSRELA, a first-in-class, U.S. Food and Drug Administration (“FDA”) approved, sodium hydrogen exchanger 3 ("NHE3") inhibitor 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 abdominal pain and altered bowel movements, estimated to affect 11 million people in the U.S. IBS-C is associated with significantly impaired quality of life, reduced productivity, and substantial economic burden.

We have established commercial agreements with Shanghai Fosun Pharmaceutical Industrial Development Co. Ltd. (“Fosun Pharma”) in China and Knight Therapeutics, Inc. (“Knight”) in Canada for IBSRELA for IBS-C. Knight is currently marketing IBSRELA in Canada.

XPHOZAH is a first-in-class medicine being developed for the control of serum phosphorus in adult patients with CKD on dialysis. XPHOZAH has a unique mechanism of action and acts locally in the gut to inhibit NHE3. This results in the tightening of the epithelial cell junctions, thereby significantly reducing paracellular uptake of phosphate, the primary pathway of phosphate absorption. If approved, XPHOZAH would be the first therapy for phosphate management that blocks phosphorus absorption at the primary site of uptake. It is not a phosphate binder.

In June 2020, we submitted a new drug application ("NDA") to the FDA for XPHOZAH for the control of serum phosphorus in adult patients with CKD on dialysis. The NDA was supported by three Phase 3 trials involving over 1,000 adult patients that evaluated the use of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis, with two trials evaluating tenapanor as monotherapy and one trial evaluating tenapanor as part of a dual mechanism approach with phosphate binders. All three Phase 3 trials met their primary and key secondary endpoints.

On July 28, 2021, we received a Complete Response Letter ("CRL") from the FDA regarding our NDA for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis. According to the CRL, while the FDA agrees “that the submitted data provide substantial evidence that tenapanor is effective in reducing serum phosphorus in adult patients with CKD on dialysis,” the FDA characterizes the magnitude of the treatment effect as “small and of unclear clinical significance.” In December 2021, we submitted a Formal Dispute Resolution Request (“FDRR”). The FDRR was focused on ~~enhancing~~demonstrating that the ~~way patients with cardiorenal~~data submitted in the NDA supported the clinical significance of the treatment effect of tenapanor.

On February 4, 2022, we received an Appeal Denied Letter (“ADL”) from the FDA’s Office of Cardiology, Hematology, Endocrinology and ~~gastrointestinal,~~Nephrology (“OCHEN”). On February 18, 2022, we submitted an appeal of the ADL to the FDA’s Center for Drug Evaluation and Research, Office of New Drugs (“OND”).

On April 25, 2022, we announced that OND has provided an interim response to our second level of appeal of the CRL. The OND noted that additional input from the Cardiovascular and Renal Drug Advisory Committee (“Advisory Committee”) in general, and specifically, from experts, including expert clinicians, would be valuable in further considering the clinical meaningfulness of the phosphate lowering effect observed in our phase 3 clinical program for XPHOZAH. Accordingly, the OND intends to direct the Division of Cardiology and Nephrology to bring the XPHOZAH NDA to the Advisory Committee, and to provide a response to our appeal within thirty (30) days after the conclusion of the Advisory Committee meeting. There can be no assurances that the Advisory Committee will recommend approval of our NDA for XPHOZAH, or ~~GI, diseases are treated~~that if approval is recommended, that such approval will ultimately be granted by ~~using~~ the ~~gut as the gateway to deliver medicines that matter. We have pioneered~~FDA.

Our small molecule potassium secretagogue program, RDX013, is focused on the development of ~~small molecule therapeutics~~a potential treatment for hyperkalemia. Hyperkalemia is a common problem in patients with heart and kidney disease, particularly in patients taking customary blood pressure medications known as renin-angiotensin-aldosterone system (“RAAS”) inhibitors. RDX013 is a novel mechanism agent designed to target the underlying biological mechanisms of potassium secretion to lower elevated potassium.

On April 25, 2022, we reported that ~~act predominantly in the GI tract, thereby avoiding potentially negative side effects on the rest~~we have completed our data analyses of the ~~body.~~

Our strategy is to evolve from a research and development-focused company to an integrated biotechnology company, by establishing regional and global partnerships to leverage our own commercial capabilities and experience to help build our cardiorenal and GI portfolios. We are developing several products and programs focused on underserved medical needs including the following:

~~Cardiorenal Portfolio~~

~~Tenapanor: We have successfully completed one~~ Phase 32 dose ranging clinical trial for RDX013 evaluating the safety and efficacy of our potassium secretagogue for the treatment of~~end-stage~~ ~~renal~~ hyperkalemia, or elevated potassium, in chronic kidney disease ~~or ESRD,~~patients who are not on dialysis. While the results of the study demonstrated an acceptable safety and tolerability profile for RDX013 and supported proof of concept in its ability to lower serum potassium levels, with statistically significant reductions compared to placebo after eight days of treatment, the study did not meet its primary endpoint of significantly reducing serum potassium levels compared to placebo after four weeks of treatment. We currently expect that the next steps for the program will be to evaluate a new formulation that potentially enhances subject compliance and the efficacy of RDX013 in an additional Phase 2 clinical study at such time as we have determined our available resources support conducting such an additional clinical study after prioritization of our launch of IBSRELA and preparations for the Advisory Committee for XPHOZAH.

RDX020 Program: Small molecule for Treating Metabolic Acidosis

We have an ongoing discovery program targeting the inhibition of bicarbonate exchange inhibitor for the treatment of metabolic acidosis, a highly prevalent comorbidity in CKD patients that is strongly correlated with disease progression and adverse outcomes. We have identified lead compounds that are potent, selective and proprietary inhibitors of bicarbonate

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secretion. Our research organization was eliminated as part of our October 2021 restructuring, and therefore, we currently expect to continue to advance this discovery program utilizing third-party resources managed by internal non-clinical expertise.

Collaboration Partners

We have exclusive rights to tenapanor in the U.S. and we have established agreements with Kyowa Kirin Co., Ltd. (“KKC”) in Japan, Shanghai Fosun Pharmaceutical Industrial Development Co. Ltd. (“Fosun Pharma”) in China and Knight Therapeutics, Inc. (“Knight“) in Canada for the development and commercialization of tenapanor for certain indications in their respective territories.

Knight has exclusive rights for the development, commercialization and distribution of tenapanor in Canada for hyperphosphatemia and IBS-C. In March 2021, Knight announced the commercial availability of IBSRELA in Canada, following its approval by Health Canada in April 2020. Under the terms of the agreement with Knight, we received a$2.3 million nonrefundable, one-time upfront payment in March 2018 and are eligible to receive additional development and commercialization milestone payments worth up to $17.8 million. We are also eligible to receive royalties throughout the term of the agreement, and a transfer price for manufacturing services.

KKC has exclusive rights for the development, commercialization and distribution of tenapanor in Japan for cardiorenal indications. In April 2021, we announced that KKC had commenced four phase 3 clinical trials in Japan evaluating tenapanor for hyperphosphatemia. The phase 3 clinical trials consist of a multi-center, randomized, double-blind, placebo-controlled, parallel-group comparative study; a phosphate binder-combination parallel-group comparative study; an open-label, single-arm study evaluating hyperphosphatemia patients on ~~dialysis suffering~~peritoneal dialysis; and a long-term study evaluating serum phosphorus in patients who switch from ~~elevated serum phosphorous,~~one or ~~hyperphosphatemia;~~more phosphate binders to tenapanor. Under the terms of the agreement with KKC, we received a $30.0 million upfront payment from KKC, and we may be entitled to receive up to$55.0 million in total development milestones, of which $10.0 million has been received and recognized as revenue as of March 31, 2022, and approximately ¥8.5 billion for commercialization milestones, or approximately $69.7 million at the currency exchange rate on March 31, 2022, as well as royalties on net sales throughout the term of the agreement.

As discussed in Note 14 - Subsequent events, on April 11, 2022, we entered into a second amendment (the "Amendment") to the 2017 KKC Agreement. Under the terms of the Amendment, the parties have agreed to a reduction in the royalty rate payable to us by KKC upon net sales of tenapanor in Japan. The royalty rate will be reduced from the high teens to low double digits for a two-year period of time following the first commercial sale in Japan, and then to mid-single digits for the remainder of the royalty term. As consideration for the reduction in the royalty rate, KKC has agreed to pay us up to an ~~effort~~additional U.S. $40.0 million payable in two tranches, with the first payment due following KKC's filing with the Japanese Ministry Health, Labour and Welfare (MHLW) of its application for marketing approval for tenapanor and the second payment due following KKC's receipt of regulatory approval to ~~optimize~~market tenapanor for hyperphosphatemia in Japan.

Fosun Pharma has exclusive rights for the ~~potential~~development and commercialization for ~~clinical~~the development, commercialization and ~~regulatory success~~distribution of tenapanor in China for both hyperphosphatemia andIBS-C. Under the terms of the Fosun Agreement, we received$12.0 million inupfrontlicense, and we may be entitled to additional development and commercialization milestones of up to$110.0 million, as well as reimbursement of cost plus a reasonable overhead for the supply of product and tiered royalties on net sales ranging from the mid-teens to20%.

Impact of COVID-19

The global COVID-19 pandemic has impacted the operational decisions of companies worldwide. It also has created and may continue to create significant uncertainty in the global economy. We have undertaken measures to protect our employees, partners, collaborators, and vendors, some of which impact our normal operations. To date, we have been able to continue our operations with our workforce, most of whom are working remotely, and our pre-existing infrastructure that supports secure access to our internal systems. If, however, the COVID-19 pandemic has a substantial impact on the productivity of our employees, the results of our operations and overall financial performance may be adversely impacted. The extent of the impact from the COVID-19 pandemic on our business will depend largely on future developments that are highly uncertain and cannot be predicted. For a discussion of risks of COVID-19 relating to our business, see “Part II: Other Information-Item 1A.- Risk Factors- Risks Related to Our Business-The ongoing effects of the COVID-19 pandemic, or any other outbreak ofepidemic diseases, or the perception of their effects, could have a material adverse effect on our business, financial condition, results of operations or cash flows.” As of the date of issuance of this financial report, we are not aware of any specific event or circumstance that would require updates to our estimates and judgments or revisions to the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained.

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Critical Accounting Policies and Significant Judgments and Estimates

Our discussion and analysis of financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

Critical accounting policies are those that require significant judgment and/or estimates by management at the time that financial statements are prepared such that materially different results might have been reported if other assumptions had been made. These estimates form the basis for making judgments about the carrying values of assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates.

The critical accounting policies that we believe impact significant judgments and estimates used in the preparation of our condensed financial statements presented in this report are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our ~~second Phase 3 study,~~Annual Report on Form 10-K filed with the SEC on February 28, 2022.

During the three months ended March 31, 2022, we ~~are awaiting feedback~~adopted the following critical accounting policies and significant judgements and estimates:

Product Sales, Net

We account for our commercial product sales, net in accordance with Topic 606 - Revenue from Contracts with Customers. We received approval from the U.S. Food and Drug Administration ~~or FDA,~~(“FDA”) in September 2019 to market IBSRELA, the first and ~~pending the agency’s response, we are ready to begin enrollment in this Phase~~only sodium hydrogen exchanger 3 ~~clinical trial.~~

RDX7675: We initiated a Phase 3 clinical trial in patients with hyperkalemia, a severe disorder of elevated serum potassium common in patients with chronic kidney disease, or CKD, and/or heart failure; we anticipate providing an update from our onset-of-action study for RDX7675(“NHE3”) inhibitor for the treatment of ~~hyperkalemia by the end of 2017.~~

~~Research Programs: We are engaged in research regarding unique, small-molecule approaches to treat hyperkalemia to improve efficacy and compliance by significantly reducing pill burden.~~

~~Gastrointestinal Portfolio~~

~~Tenapanor: We have successfully completed two Phase 3 clinical trials for the treatment of patients with~~ irritable bowel syndrome with constipation or~~IBS-C,~~("IBS-C") in adults, in the United States (the "U.S."). We began selling IBSRELA in the U.S. in March 2022. We distribute our products principally through a ~~highly prevalent disorder~~limited number of distributors and specialty pharmacy providers (collectively, our "Customers"). Our Customers subsequently sell our products to pharmacies and patients. Separately, we enter into arrangements with ~~symptoms~~third parties that provide for government-mandated and privately-negotiated rebates, chargebacks and discounts. Revenue from product sales is recognized when our performance obligations are satisfied, which is when Customers obtain control of ~~both constipation~~our product and ~~abdominal pain;~~occurs upon delivery.

Reserves for Variable Consideration

Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration, including rebates, discounts, patient copay assistance programs, and estimated product returns. These estimates are based on the amounts earned or to be claimed for related sales and are classified as reductions of accounts receivable if the amount is payable to our Customers or a current liability if the amount is payable to a party other than a Customer. Where appropriate, these estimates are based on factors such as industry data and forecasted customer buying and payment patterns, our historical experience, current contractual and statutory requirements, specific known market events and trends. Overall, these reductions to gross sales reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we adjust these estimates, which would affect product revenue and earnings in the period such variances become known. As we gain more historical experience, estimates will be more heavily based on the expected utilization from historical data we have accumulated since the IBSRELA product launch. Rebates are generally invoiced and paid quarterly in arrears.

Rebates: Rebates include mandated discounts under the Medicaid Drug Rebate Program ("Medicaid") and the Medicare Coverage Gap Program ("Medicare"). Rebates are amounts owed after the final dispensing of products to a benefit plan participant and are based upon contractual agreements or legal requirements with the public-sector benefit providers. These estimates for rebates are recorded in the same period the related gross revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses on the condensed balance sheets. We estimate our Medicaid and Medicare rebates based upon the estimated payor mix, and statutory discount rates. Our Our estimates for payor mix are guided by payor information received from specialty pharmacies, expected utilization for specialty distributor sales to pharmacies, and available industry payor information.

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Chargebacks: Chargebacks are discounts that occur when contracted purchasers purchase directly from our specialty distributors at a discounted price. The specialty distributor, in turn, charges back the difference between the price initially paid to us by the specialty distributor and the discounted price paid to the specialty distributor by the contracted purchaser. Amounts for estimated chargebacks are established in the same period that the related gross revenue is recognized, resulting in a reduction of product revenue and accounts receivable. The accrual for specialty distributor chargebacks is estimated based on known chargeback rates, known sales to specialty distributors, and estimated utilization by types of contracted purchasers.

Discounts and Fees: Our payment terms are generally 30 to 60 days. Specialty distributors and specialty pharmacies are offered various forms of consideration, including service fees and prompt pay discounts for payment within a specified period. We expect these Customers will earn prompt pay discounts and therefore, we deduct the full amount of these discounts and service fees from product sales when revenue is recognized, resulting in a reduction of product revenue and accounts receivable.

Other Reserves: Patients who have commercial insurance may receive co-pay assistance when product is dispensed by pharmacies to patients. We estimate the amount of co-pay assistance provided to eligible patients based on the terms of the program and redemption information provided by third-party claims processing organizations and are recorded in accounts payable, accrued expenses and other current liabilities on the condensed balance sheets.

Recent Accounting Pronouncements

A summary of recent accounting pronouncements that we have adopted or may expect to ~~submit~~adopt is included in Note 1 – Organization and Basis of Presentation to our condensed financial statements (see Part I, Item 1 Notes toCondensed Financial Statements, of this Quarterly Report on Form 10-Q).

Financial Operations Overview

Revenue

Our revenue to date has been generated primarily through license, research and development collaborative agreements with various collaboration partners. We realized our first commercial product sales of IBSRELA in March 2022. In the future, we may generate revenue from a ~~new~~combination of our own product sales and payments in connection with our current or future collaborative partnerships, including license fees, other upfront payments, milestone payments, royalties and payments for drug ~~application,~~ product and/or ~~NDA, requesting marketing authorization~~drug substance. We expect that any revenue we generate will fluctuate in future periods as a result of, among other factors: whether and the extent to which we are successful in our commercialization of IBSRELA, whether we are able to gain approval from the FDA for our NDA for XPHOZAH; the timing and progress of goods and services provided pursuant to our current or future collaborative partnerships; our or our collaborators’ achievement of clinical, regulatory or commercialization milestones, to the extent achieved; the timing and amount of any payments to us relating to the aforementioned milestones; and the extent to which tenapanor is approved and successfully commercialized by a collaboration partner. If our current collaboration partners or any future collaboration partners fail to obtain regulatory approval for tenapanor, our ability to generate future revenue from our collaborative arrangements, and our results of operations and financial position, would be materially and adversely affected. Our past revenue performance is not necessarily indicative of results to be expected in future periods.

Cost of Revenue

Cost of revenue consists of the cost of commercial goods sold to Customers, collaboration partners under product supply agreements, and royalty expense based on sales of tenapanor. We capitalize inventory costs associated with the production of our products after regulatory approval or when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Otherwise, such costs are expensed as research and development. A portion of the costs of IBSRELA units recognized as revenue during the three months ended March 31, 2022 were expensed prior to the fourth quarter of 2021, when our intent to commercialize IBSRELA was established and we commenced preparation for the commercial launch of IBSRELA. We believe our cost of goods sold for the three months ended March 31, 2022 would have been $9 thousand higher, if we had not previously expensed certain material and production costs with respect to the units sold. As of March 31, 2022, we had approximately $32.3 million of inventory on hand that was previously expensed as research and development expense and will not be reported as cost of goods sold in future periods when sales of IBSRELA are recognized as revenue.

Cost of revenue includes payments due to AstraZeneca, which under the terms of a termination agreement entered into in 2015 (the "AZ Termination Agreement") is entitled to (i) future royalties at a rate of 10% of net sales of tenapanor or other

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NHE3 products by us or our licensees, and (ii) 20% of non-royalty revenue received from our collaboration partners in connection with the development and commercialization of tenapanor or certain other NHE3 inhibitors. We have agreed to pay AstraZeneca up to a maximum of $75.0 million in the ~~second half~~aggregate for (i) and (ii). We recognize these expenses as cost of ~~2018.~~

~~Research Programs: We~~revenue when we recognize the corresponding revenue that gives rise to payments due to AstraZeneca. To date, we have ~~programs focused on TGR5 agonists and gut-biased farnesoid X receptors, or FXR, agonists for~~recognized an aggregate of $11.7 million as cost of revenue under the ~~treatment of various GI disorders, and are also leveraging our knowledge of the mechanisms of tenapanor in order to discover new agents that modulate transport of ions and other processes in the gut.~~AZ Termination Agreement.

~~Financial Operations Overview~~

Research and Development ~~Expenses~~

Pursuant to the October 2021 restructuring plan, we eliminated our internal research organization and expect to continue our discovery efforts with respect to RDX020 through the use of third-parties managed internally by non-clinical expertise. We recognize all research and development expenses as they are incurred to support the discovery, research, development and manufacturing of our product candidates. Research and development expenses ~~consist of~~include, but are not limited to, the following:

•external research and development expenses incurred under agreements with consultants, third-party contract research organizations (“CROs”) and investigative sites where a substantial portion of our clinical studies are conducted, and with contract manufacturing organizations where our clinical supplies are produced;

•expenses associated with supplies and materials consumed in connection with our research operations;

•expenses associated with producing tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis prior to FDA approval;

•other costs associated with research, clinical development and regulatory activities;

•employee-related expenses, which include salaries, bonuses, benefits, travel and stock-based compensation; and

~~other costs associated with regulatory, clinical andnon-clinical~~ ~~development activities; and~~

•facilities 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.

We expect to continue to make substantial investments in research and development activities as we progress the development of tenapanor and RDX7675, as well as our other product candidates, advance our research programs into the preclinical stage and continue our early stage research including further development of our proprietary drug discovery and design platform. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in achieving marketing approval for any of our product candidates. The probability of success of each of the product candidates may be affected by numerous factors, including preclinical data, clinical data, our ability to access capital on acceptable terms, competition, manufacturing capability and commercial viability.

The successful development of our product candidates is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. Given the uncertainty associated with clinical trial enrollment and the risks inherent in the development process, we are unable to determine the duration and completion costs of current or future clinical trials of our product candidates or if and to what extent we will generate revenues from the commercialization and sale of any of our product candidates. We anticipate that we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to the scientific and clinical success of each product candidate, ongoing assessments as to each product candidate’s commercial potential, and our ability to access capital on acceptable terms. We will need to raise additional capital and will seek collaboration partnerships in order to complete the development and commercialization of our product candidates, including tenapanor and RDX7675.

Selling, General and Administrative

~~General~~

Selling, general and administrative expenses consist ~~principally~~primarily of salaries and related ~~costs,~~benefits, including stock-based compensation, for certain of our executives, our board members, and ~~travel expenses, for personnel in executive~~our finance, legal, business development, market development, commercial and ~~other administrative functions.~~support staff. Other selling, general and administrative expenses include facility related costs ~~communication expenses~~ and professional fees for legal, accounting and audit, investor relations, other consulting services and ~~accounting services.~~

~~We anticipate that~~allocated facility related costs not otherwise included in research and development expenses.

Interest Expense

Interest expense represents the interest paid on our ~~general~~loan payable.

Other Income, net

Other income, net consists of interest income earned on our cash and ~~administrative expenses will increase substantially in~~cash equivalents and available-for-sale investments, the ~~future primarily because~~periodic revaluation of ~~(i) increasedpre-commercial~~ ~~activities to support~~ the potential launch of tenapanor for the treatment of hyperphosphatemia in ESRD patients on dialysis and the potential launch of RDX7675 for the treatment of hyperkalemia, if and when authorized for marketing by the FDA, (ii) expensesexit fee related to ~~costs~~our loan and currency exchange gains and losses.

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Table of ~~operating as a public company and preparing for future integrated audits, and (iii) expenses related~~Contents

RESULTS OF OPERATIONS

The results of operations are not necessarily indicative of the results to ~~personnel costs including stock-based compensation and growth of personnel related to the potential launch of our cardiorenal products.~~

~~Provision for Income Taxes~~

~~We did not record a provision for income taxes for the three or nine months ended September 30, 2017, because we expect to generate a net operating loss~~be expected for the year ending December 31, ~~2017. Our deferred tax assets continue to be fully offset by~~2022, for any other interim period, or for any other future year.

Comparison of thethree months ended March 31, 2022 and 2021

Revenue

Below is a ~~valuation allowance.~~

~~Critical Accounting Polices and Estimates~~

~~Our management’s discussion and analysis~~summary of our ~~financial condition and results~~total revenue (dollars in thousands):


	Three Months Ended March 31,				Change 2022 vs. 2021
	2022		2021		$		%
Product sales, net	$	450	$	—	$	450	(a)
Product supply revenue	14		126		(112)		(88.9)	%
Licensing revenue	4		5,002		(4,998)		(99.9)	%
Collaborative development revenue	—		1,454		(1,454)		(100.0)	%
Total revenues	$	468	$	6,582	$	(6,114)	(92.9)	%
(a) Percent change is not meaningful.

The decrease to total revenues during the three months ended March 31, 2022 is primarily attributable to a $5.0 million milestone that was earned during the prior year upon the initiation of ~~operations is based upon our unaudited condensed consolidated financial statements, which have been prepared~~phase 3 clinical studies by KKC in ~~accordance with United States generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires us~~Japan to ~~make estimates and assumptions~~evaluate tenapanor for hyperphosphatemia that ~~affect~~did not recur during the ~~reported amounts of assets and liabilities at the date of the financial statements,~~current year, as well as the ~~expenses incurred~~full recognition of upfront payments associated with the 2019 KKC Agreement through the end of 2021, for which there was no comparable revenue during the ~~reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results~~three months ended March 31, 2022. Partially offsetting these decreases was recognition of ~~which form the basis~~$0.5 million of product sales, net for ~~making judgments about the carrying values~~initial sales of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We consider certain accounting policies related to research and development expense, accruals and stock-based compensation to be critical policies. There have been no changesIBSRELA to our ~~critical accounting policies since we filed our 2016 Form10-K~~Customers in connection with the ~~SEC on February 17, 2017. For~~commercial launch of IBSRELA.

Operating Expenses

Below is a ~~description~~summary of our ~~critical accounting policies, please refer to our Form10-K~~ ~~we filed with the SEC on February 17, 2017.~~

~~RESULTS OF OPERATIONS~~

~~Three and nine months ended September 30, 2017 and 2016~~

~~Research and Development~~

~~Research and development~~operating expenses ~~for the three and nine months ended September 30, 2017, as compared to same periods~~(dollars in ~~the prior year, were as follows (in~~ thousands):

   Three Months Ended September 30,    Nine Months Ended September 30,
   2017 2016    2017 2016
Research and development
   $ 15,365 $ 24,863    $ 58,325 $ 67,951
Dollar change from prior year
   (9,498 )    (9,626 )
Percent change from prior year
   -38 %    -14 %

~~Research and development expenses were $15.4 million~~


	Three Months Ended March 31,				Change 2022 vs. 2021
	2022		2021		$		%
Cost of revenue	$	85	$	1,000	$	(915)	(91.5)	%
Research and development	8,851		20,456		(11,605)		(56.7)	%
Selling, general and administrative	19,339		17,131		2,208		12.9	%
Total operating expenses	$	28,275	$	38,587	$	(10,312)	(26.7)	%

Cost of revenue

The decrease in cost of revenue for the three months ended ~~September 30, 2017, a decrease~~March 31, 2022 was primarily attributable to $1.0 million payment due to AstraZeneca under the AZ Termination Agreement related to the development milestone we earned upon the initiation by KKC of ~~$9.5 million, or 38%,~~phase 3 clinical studies in Japan to evaluate tenapanor for hyperphosphatemia during the three months ended March 31, 2021, compared to ~~$24.9~~$0.1 million due to AstraZeneca during the three months ended March 31, 2022. In addition, during the three months ended March 31, 2022, we incurred cost of revenue from initial sales of IBSRELA to our Customers in connection with the commercial launch of IBSRELA.

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Research and Development

Below is a summary of our research and development expenses (dollars in thousands):


	Three Months Ended March 31,				Change 2022 vs. 2021
	2022		2021		$		%
External R&D expenses	$	2,940	$	11,508	$	(8,568)	(74.5)	%
Employee-related expenses	4,177		7,220		(3,043)		(42.1)	%
Facilities, equipment and depreciation expenses	1,114		1,284		(170)		(13.2)	%
Other	620		444		176		39.6	%
Total research and development expenses	$	8,851	$	20,456	$	(11,605)	(56.7)	%

The decrease in our external R&D expenses for the three months ended ~~September 30, 2016. The decrease consisted~~March 31, 2022 is primarily the result of ~~a $10.2 million decrease~~lower clinical study costs from the OPTIMIZE study, lower tenapanor manufacturing expense as we have begun to capitalize costs associated with the production of IBSRELA to inventory, and lower expenses for research following the elimination of our research function in ~~our external program costs offset by a $0.7 million increase in our internal program costs.~~

the fourth quarter of 2021. The decrease in our ~~external program costs of $10.2 million was~~employee-related expenses for the three months ended March 31, 2022 is due to ~~a decrease of $7.7 million primarily related to a decrease~~lower compensation and benefits expenses for our research and development workforce following restructuring actions in ~~expenses incurred for clinical development activities related to the completion of some of our Phase 3 clinical trials for tenapanor, as well as a decrease in clinical~~2021.

Selling, General and process development activities. In addition, expenses incurred for clinical development activities, clinical manufacturing and process development activities associated with RDX8940 and with RDX7675 decreased by $1.5 million and $1.0 million, respectively.

Administrative

The increase in our internal costs of $0.7 million was primarily due to increases in salaries and related costs, including stock-based compensation costs, principally related to supporting the growth of our development team, and severance costs, offset by a reduction in research activities related to our early-stage programs.

Research and development expenses were $58.3 million for the nine months ended September 30, 2017, a decrease of $9.6 million, or 14%, compared to $67.9 million for the nine months ended September 30, 2016. The decrease consisted of a $15.3 million decrease in our external program costs offset by a $5.7 million increase in our internal program costs.

The decrease in our external program costs of $15.3 million was due to a decrease of $15.2 million primarily related to a decrease in expenses incurred for clinical development activities related to the completion of some of our Phase 3 clinical trials for tenapanor, as well as a decrease in clinical and process development activities. In addition, expenses incurred for clinical development activities, clinical manufacturing and process development activities associated with RDX8940 decreased by $1.9 million. These decreases were offset by an increase of $1.8 million in expenses incurred for clinical development activities, clinical manufacturing and process development activities associated with RDX7675.

The increase in our internal costs of $5.7 million was primarily due to an increase in salaries and related costs, including stock-based compensation, facilities-related and other costs, principally related to supporting the growth of our development team, and severance costs.

~~General and Administrative~~

~~General~~general and administrative expenses for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022 was primarily due to increased costs associated with building and staffing our commercial infrastructure and teams as ~~compared to~~we prepared for the ~~same periods~~U.S. launch of IBSRELA. The increase consisted of headcount and related personnel costs and an increase in ~~the prior year, were as follows (in~~external spending for disease awareness initiatives, commercial infrastructure and strategy.

Other Income, net

Below is a summary of our other income, net (dollars in thousands):

   Three Months Ended September 30,    Nine Months Ended September 30,
   2017 2016    2017 2016
General and administrative
   $ 5,860 $ 4,337    $ 17,752 $ 13,469
Dollar change from prior year
   1,523    4,283
Percent change from prior year
   35 %    32 %

~~General and administrative expenses were $5.8 million~~


	Three Months Ended March 31,				Change 2022 vs. 2021
	2022		2021		$		%
Interest expense	$	(746)	$	(1,100)	$	354	(32.2)	%
Other income (expense), net	484		(49)		533		(1,087.8)	%
Total other income, net	$	(262)	$	(1,149)	$	887	(77.2)	%

Interest Expense

The decrease in interest expense for the three months ended ~~September 30, 2017, an~~March 31, 2022 was primarily due to lower principal outstanding on our loan payable.

Other Expense, net

The increase ~~of $1.5 million, or 35%~~in other income (expense), ~~compared to $4.3 million~~net for the three months ended ~~September 30, 2016.~~March 31, 2022 primarily resulted from sales of certain lab equipment and supplies for a net gain of $0.7 million. The ~~increase~~gain was primarily due to increases in salaries and related costs, including stock-based compensation and facilities costs, due to an increase in headcount and an expansion of facilities in the second half of 2016, increased legal fees, principally related to patent applications, and severance costs due to the refocusing of resources towards late-stage programs and subsequent reduction in the workforce in the third quarter of 2017,partially offset by ~~reductions in certain professional services.~~

~~General and administrative expenses were $17.8~~$0.1 million ~~for~~expense incurred upon the ~~nine months ended September 30, 2017, an increase~~settlement of $4.3 million, or 32%, compared to $13.5 million for the nine months ended September 30, 2016. The increase was primarily due to increases in salaries and related costs, including stock-based compensation and facilities costs, due to an increase in headcount and an expansionour 2018 Loan, as well as higher unrealized foreign currency exchange losses.

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Table of facilities in the second half of 2016, increased legal fees, principally related to patent applications, and severance costs due to the refocusing of resources towards late-stage programs and subsequent reduction in the workforce in the third quarter of 2017, offset by reductions in certain professional services.

Contents

Liquidity and Capital Resources

~~The following table displays~~

Below is a summary of our cash, cash equivalents and ~~short-term~~investments (in thousands):


	March 31, 2022		December 31, 2021		Change $		Change %
Cash and cash equivalents	$	47,077	$	72,428	$	(25,351)	(35)	%
Short-term investments	42,627		44,261		(1,634)		(4)	%

Total liquid funds	$	89,704	$	116,689	$	(26,985)	(23)	%

As of March 31, 2022, we had cash, cash equivalents and investments totaling $89.7 million compared to $116.7 million as of December 31, 2021. We have incurred operating losses since inception and our accumulated deficit as of March 31, 2022 is $741.0 million. Our current level of cash and investments alone is not sufficient to meet our plans for the next twelve months following the filing of these financial statements on May 5, 2022. These factors raise substantial doubt regarding our ability to continue as a going concern for a period of one year from the issuance of these financial statements. We plan to address our operating cash flow requirements with our current cash and investments, cash generated from the product launch of IBSRELA, our potential receipt of anticipated milestone payments from our collaboration partners, our potential receipt of anticipated payments from KKC under the Amendment, our ability to access the capital markets, as well as through the implementation of cash preservation activities to reduce or defer discretionary spending.

There are no assurances that our efforts to meet our operating cash flow requirements will be successful. If our current cash and investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations for at least the next twelve months following the issuance of ~~September 30, 2017~~these financial statements, our liquidity, financial condition and business prospects will be materially affected. These financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event that we can no longer continue as a going concern.

In July 2020, we filed a Form S-3 registration statement, which became effective in August 2020 ("Registration Statement"), containing (i) a base 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 $100.0 million of our common stock that may be issued and sold, from time to time, under a sales agreement with Jefferies LLC ("Jefferies"), deemed to be “at the market offerings” (the "2020 Open Market Sales Agreement"). The 2020 Open Market Sales Agreement was fully utilized as of December 31, ~~2016~~2021. During the three months ended March 31, 2021 we sold 4.9 million shares and received gross proceeds of $35.0 million at a weighted average sales price of approximately $7.09 per share under the 2021 Open Market Sales Agreement.

In August 2021, we filed an additional prospectus supplement under the Registration Statement 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 an additional sales agreement we entered into with Jefferies (the "2021 Open Market Sales Agreement"), pursuant to which we may, from time to time, sell up to $150.0 million in shares of our common stock through Jefferies. We are not required to sell shares under the 2021 Open Market Sales Agreement. Pursuant to the 2021 Open Market Sales Agreement, Jefferies, as our sales agent, receives a commission of up to 3% of the gross sales price for shares of common stock sold under the 2021 Open Market Sales Agreement. During the three months ended March 31, 2022 we sold 5.9 million shares and received gross proceeds of $6.0 million at a weighted average sales price of approximately $1.02 per share under the 2021 Open Market Sales Agreement.

In February 2022, we entered into a loan and security agreement (the “2022 Loan Agreement”) with SLR Investment Corp. The 2022 Loan Agreement provides for a senior secured term loan facility, with $27.5 million funded at closing and an additional $22.5 million that we may borrow on or prior to July 25, 2023; provided that (i) we have received approval by the FDA for our NDA for tenapanor for the control of serum phosphorus in chronic kidney disease patients on dialysis by December 31, 2022, and (ii) we have achieved certain product revenue milestone targets described in the 2022 Loan Agreement. The initial funding of $27.5 million is being used to repay the 2018 Loan and to fund our ongoing operations. We had $25.0 million principal from the 2018 Loan outstanding as of the closing date. In connection with entering into the 2022 Loan Agreement, we entered into an agreement, whereby we agreed to pay an exit fee in the amount of 2% of the 2022 Loan funded (the “2022 Exit Fee”) upon (i) any change of control transaction or (ii) our achievement of net revenue from the sale of any products equal to or greater than $100.0 million, measured on a six (6) months basis (the "Revenue Milestone"), tested monthly at the end of each month. Notwithstanding the prepayment or termination of the 2022 Loan, the 2022 Exit Fee will

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expire on February 23, 2032. We concluded that the 2022 Exit Fee is a freestanding derivative which should be accounted for at fair value on a recurring basis. The estimated fair value of the 2022 Exit Fee is recorded as a derivative liability and included in accrued expenses and other current liabilities on the accompanying condensed balance sheets.

Our primary sources of cash have been from the sale and issuance of common stock (in ~~thousands):~~

   September 30,
2017    December 31,
2016
Cash and cash equivalents
   $ 59,454    $ 74,598
Short-term investments
   69,834    126,225




Total liquid funds
   $ 129,288    $ 200,823

both public offerings and private placements) and private placements of convertible preferred stock, funds from our collaboration partnerships and funds from our 2018 Loan Agreement. Our primary uses of cash ~~are~~have been to fund operating expenses, primarily research and development ~~expenditures.~~expenditures and pre-commercial expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

~~We believe that our existing capital resources as of September 30, 2017,~~

Our future funding requirements are difficult to forecast and will ~~be sufficient to meet our projected operating requirements for at least the next 12 months. We have based this estimate~~depend on assumptions, that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Further, our operating plans can change, and we will require significant additional capital to fund our operations, including to support the development,~~pre-commercialization~~ and commercialization efforts for the cardiorenal products we intend to commercialize ourselves, including tenapanor for the treatment of hyperphosphatemia in ESRD patients on dialysis and RDX7675 for the treatment of hyperkalemia. We may seek to obtain such additional capital through debt financings, credit facilities, additional equity offerings and/or strategic collaborations. We currently have no credit facility or committed sources of capital, and there can be no assurances that such sources of capital will be available to us when needed or on acceptable terms. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, and many factors, including:

•the extent to which we ~~may enter into collaborative partnerships with third parties~~are able to ~~participate in their development and commercialization,~~generate product revenue from sales of IBSRELA;

•whether we are ~~unable to estimate~~successful in our efforts under the ~~amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies. Our future funding requirements will depend on many factors,~~FDR process, including the ~~following:~~

Advisory Committee meeting to be convened as part of the ~~progress, timing, scope, results and costs of~~FDR process, to secure approval for our ~~clinical trial programs evaluating~~NDA for tenapanor for the ~~treatment of hyperphosphatemia in ESRD patients on dialysis, the completion of our Phase 3 clinical program evaluating tenapanor for the treatment ofIBS-C,~~ ~~and the subsequent submission of an NDA~~Hyperphosphatemia Indication, or to reach resolution with the FDA regarding a path to ~~request marketing authorization, as well as our decision whether or not to pursue other indications for tenapanor;~~

address the ~~progress, timing, scope, results~~deficiencies in the NDA noted in the CRL and ~~costs of our clinical programs for RDX7675;~~

ADL, and the time and cost ~~necessary to obtain regulatory approvals~~associated with such path;

•the availability of adequate third-party reimbursement for ~~our product candidates~~IBSRELA and, if approved, the sales price and the ~~costs~~availability of ~~post-marketing studies that could be required by regulatory authorities;~~adequate third-party reimbursement for XPHOZAH;

~~our ability to successfully commercialize our product candidates, either alone or with one or more collaboration partners;~~

•the manufacturing costs of ~~our product candidates,~~IBSRELA and ~~the availability of one or more suppliers for our product candidates at reasonable costs, both for clinical and commercial supply;~~XPHOZAH;

•the selling and marketing costs associated with ~~our product candidates, including the cost~~IBSRELA and, ~~timing of building our sales and marketing capabilities;~~if approved, XPHOZAH;

•our ability to ~~establish and~~ maintain our existing collaboration partnerships and to~~in-license~~ or establish additional collaboration partnerships, in-license/out-license, ~~our current programs~~ 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 revenue, if any, that may be received from KKC in connection with the 2022 KKC Amendment;

•the timing, receipt, and amount of sales of, or royalties on, ~~our future products,~~tenapanor, if any;

~~the sales price and the availability of adequate third-party reimbursement for our product candidates;~~

•the cash requirements of any future acquisitions or discovery of product candidates;

~~the number and scope of research programs that we decide to pursue or initiate, and~~ •any clinical trials we are required to or decide to pursue for ~~other product candidates;~~tenapanor or RDX013;

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

•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, including 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.~~candidates; and

•the payment of interest and principal related to our loan and security agreement entered into with SLR Investment Corp. in February 2022.

Please see the risk factors set forth in Part II, Item 1A, Risk Factors, in this Quarterly Report on Form 10-Q for additional risks associated with our capital requirements.

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CASH FLOW ACTIVITIES

The following table summarizes our cash flows ~~for the periods indicated~~ (in thousands):

   Nine Months Ended September 30,
   2017    2016
Net cash used in operating activities
   $ (69,888 )    $ (65,786 )
Net cash provided by (used in) investing activities
   54,069    (71,848 )
Net cash provided by financing activities
   675    190,990




Net (decrease) increase in cash and cash equivalents
   $ (15,144 )    $ 53,356


	Three Months Ended March 31,
	2022		2021		Change $		Change %
Net cash used in operating activities	$	(27,620)	$	(44,217)	$	16,597	(38)	%
Net cash provided by investing activities	2,332		2,485		(153)		(6)	%
Net cash provided by (used in) financing activities	(63)		34,770		(34,833)		(100)	%
Net decrease in cash and cash equivalents	$	(25,351)	$	(6,962)	$	(18,389)	264	%

Cash Flows from Operating Activities

Net cash used in operating activities during the ~~nine~~three months ended ~~September 30, 2017, was approximately $69.9 million. The~~March 31, 2022 decreased by $16.6 million primarily as a result of changes to our operating assets and liabilities as we built and staffed our commercial infrastructure and teams in preparation for the U.S. launch of tenapanor. In addition to the changes in our operating assets and liabilities, our net loss ~~of $74.5~~was $5.1 million ~~was adjusted for(i) non-cash~~ charges of $2.5 million for depreciation and amortization and $7.2 million for stock-based compensation and issuance of shares for services, (ii) a decrease in prepaid expenses, primarily advances to vendors for clinical development and manufacturing activities, of $2.4 million and (iii) a decrease of accounts payable and accrued liabilities of $2.7 million primarily due to expenses incurred for the clinical manufacturing, process development, and clinical development activities for tenapanor and RDX7675.

~~Net cash used in operating activities~~less than during the ~~nine~~three months ended September 30, 2016, was approximately $65.8 million. The net loss of $81.1 million was adjusted for (i) an increase in accounts payable and accrued liabilities of $9.3 million due to expenses incurred for the clinical manufacturing, process development, and clinical development activities for tenapanor, RDX7675 and RDX8940, (ii)~~non-cash~~ charges of $1.3 million for depreciation and amortization and $4.0 million for stock-based compensation and issuance of shares for services and (iii) advance payments of $0.7 million to vendors for clinical development and manufacturing activities.

March 31, 2021.

Cash Flows from Investing Activities

Net cash provided by investing activities ~~was $54.1~~decreased by $0.2 million ~~for the nine months ended September 30, 2017, primarily~~ due to the timing of our investment maturities and ~~sales, less~~ purchases, ~~of short-term investments of $56.4 million. This was offset by the acquisition of property and equipment of $2.3~~as well as $0.8 million ~~related to the purchase~~proceeds from sale of laboratory equipment and ~~leasehold improvements.~~

~~Net cash used in investing activities was $71.8 million for~~supplies during the ~~nine~~three months ended September 30, 2016, primarily due to purchases of marketable securities of $69.7 million and acquisition of property and equipment of $2.1 million related to the expansion of our laboratory and related equipment.

March 31, 2022.

Cash Flows from Financing Activities

Net cash provided by financing activities ~~for the nine months ended September 30, 2017, was $0.7 million, due to proceeds from issuance of common stock under stock plans.~~

~~Net cash provided~~decreased by ~~financing activities for the nine months ended September 30, 2016, was $191.0~~$34.8 million primarily due to net proceeds from issuance of ~~$80.8 million from a public offering of~~our common stock ~~in January 2016~~pursuant to the at the market offerings of $34.3 million during the three months ended March 31, 2021 compared to $5.9 million during the three months ended March 31, 2022. In addition, during the three months ended March 31, 2022, we received net proceeds of $27.0 million pursuant to the 2022 Loan Agreement and repaid $33.0 million, net of ~~$109.8 million from a private placement transaction in July 2016.~~

settlement costs, to repay the 2018 Loan.

Off-Balance Sheet Arrangements

~~None.~~

~~Recent Accounting Pronouncements~~

~~Refer to Note 2~~

As of March 31, 2022 and 2021, respectively, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K as promulgated by the ~~notes to our unaudited interim condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form10-Q,~~ ~~for a discussion of recent accounting pronouncements.~~

SEC.

~~ITEM 3.~~

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

~~There~~

ITEM 3. 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. However, 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 ~~been no~~any material negative impact on the fair value of our cash equivalents.

As of March 31, 2022, we had cash, cash equivalents and investments of $89.7 million, which consist of bank deposits and money market funds, as well as high quality fixed income instruments including corporate bonds, commercial paper, and asset-backed securities collateralized by non-mortgage consumer receivables. The credit rating of our 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 funds must be rated AAAm/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.

We are subject to interest rate fluctuation exposure through our borrowings under the Loan Agreement and our investment in money market accounts which bear a variable interest rate. Borrowings under the 2022 Loan bear interest at a floating per annum rate equal to 7.95% plus the greater of (i) one tenth percent (0.10%) and (ii) the one-month rate published by the

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Intercontinental Exchange Benchmark Administration Ltd ("ICE") or its successor. A hypothetical increase in one-month ICE of 100 basis points above the current one-month ICE rates would have increased our interest expense by approximately $0.1 million for the three months ended March 31, 2022. As of March 31, 2022, we had an aggregate principal amount of $27.5 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 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, assets and liabilities associated with a limited number of manufacturing 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. The counterparties to our forward foreign currency exchange contracts are creditworthy commercial banks, which minimizes the ~~sources and effects~~risk of ~~our market risk compared to the disclosures in Item 7A~~counterparty nonperformance.

As of ~~our 2016 Form10-K.~~

March 31, 2022, we had no open forward foreign currency exchange contracts.

~~ITEM 4.~~

~~CONTROLS AND PROCEDURES~~

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, under the supervision and with the participation of our principal executive officer and principal ~~accounting and~~ financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules13a-15(e) and15d-15(e) under the Exchange Act) as of ~~September 30, 2017.~~March 31, 2022. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our principal executive officer and principal ~~accounting and~~ financial officer have concluded that, as of ~~September 30, 2017,~~March 31, 2022, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

During the three months ended March 31, 2022, we implemented certain internal controls in connection with our product launch. There were no other changes in our internal control over financial reporting that occurred during ~~the~~our most recent fiscal quarter ~~ended September 30, 2017,~~ that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

PART II. OTHER INFORMATION

~~ITEM 1.~~

~~LEGAL PROCEEDINGS~~

ITEM 1. LEGAL PROCEEDINGS

On July 30 and August 12, 2021, two putative securities class action lawsuits were commenced in the U.S. District Court for the Northern District of California naming as defendants Ardelyx and two current officers captioned Strezsak v. Ardelyx, Inc., et al., Case No. 4:21-cv-05868-HSG, and Siegel v. Ardelyx, Inc., et al., Case No. 5:21-cv-06228-HSG (together, the “Securities Class Actions”). The complaints allege that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact related to tenapanor. The plaintiffs seek to represent all persons who purchased or otherwise acquired Ardelyx securities between August 6, 2020, and July 19, 2021. The plaintiffs seeks damages and interest, and an award of costs, including attorneys’ fees. On September 28, 2021, several shareholders filed motions to consolidate the two putative class actions and to be appointed lead plaintiff and have their selection of counsel be appointed lead counsel. The court has not yet ruled on those motions. Once the court appoints a lead plaintiff and lead counsel, the parties will negotiate and submit a

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proposed schedule for lead plaintiff to file a consolidated amended complaint and for defendants to file a motion to dismiss. We believe the plaintiff’s claims are without merit and we have not recorded any accrual for a contingent liability associated with these legal proceedings.

On December 7, 2021 and March 29, 2022, two verified shareholders derivative lawsuits were filed purportedly on behalf of Ardelyx against certain of Ardelyx’s executive officers and members of our board of directors, captioned Go v. Raab, et al., Case No. 4:21-cv-09455-HSG, and Morris v. Raab, et al., Case No. 4:22-cv-01988-JSC. The complaints allege violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste, and seek contribution under Sections 10(b) and 21D of the Securities Exchange Act of 1934 from two executive officers. On January 19, and April 27, 2022, the court granted the parties’ stipulation to stay the Go and Morris actions, respectively, until resolution of the anticipated motion(s) to dismiss in the Securities Class Actions, and the cases remain stayed.

From time to time, we may be involved in legal proceedings arising in the ordinary course of business. As of ~~September 30, 2017,~~March 31, 2022, there is no litigation pending that would reasonably be expected to have a material adverse effect on our results of operations and financial ~~condition.~~

condition, and no contingent liabilities were accrued as of March 31, 2022.

~~ITEM 1A.~~

~~RISK FACTORS~~

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 Quarterly Report on Form10-Q, including our financial statements and the ~~related~~ 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 Limited Operating History,~~our Financial Condition and Capital Requirements

We have a limited operating history, have incurred significant losses since our inception and we will incur losses in the future, which makes it difficult to assess our future ~~viability.~~

viability; although our financial statements have been prepared on a going concern basis, our current level of cash and investments alone is not sufficient to meet our operating plans for the next twelve months, raising substantial doubt regarding our ability to continue as a going concern.

We are a clinical-stage biopharmaceutical company with a limited operating history. Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. To date, we have focused substantially all of our efforts on our research and development activities, including developing ~~our clinical product candidates,~~ tenapanor ~~and RDX7675,~~ and developing our proprietary drug discovery and design platform. ~~To date, we~~We began selling our first product, IBSRELA®(tenapanor) for the treatment of irritable bowel syndrome with constipation (“IBS-C”) in March 2022, and have ~~not commercialized any products or~~ generated ~~any~~limited revenue from ~~the sale of products.~~

product sales to date.

We are not profitable and 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 ~~have only a limited operating history upon which to evaluate our business and prospects. We~~ continue to incur significant ~~research,~~commercialization, development and other expenses related to our ongoing operations. As of ~~September 30, 2017,~~March 31, 2022, we had an accumulated deficit of ~~$288.3~~$741.0 million.

We expect ~~that our~~to continue to incur substantial operating losses ~~will substantially increase~~ for the foreseeable future as we commercialize IBSRELA, seek to gain approval for XPHOZAH® (tenapanor) for the control of serum phosphorus in adult patients with chronic kidney disease (“CKD”) on dialysis (the “Hyperphosphatemia Indication”); prepare for the potential commercialization of ~~tenapanor~~XPHOZAH, if approved; and ~~RDX7675,~~ incur manufacturing and development ~~costs~~cost for, ~~tenapanor and RDX7675, including costs associated with completing the ongoing Phase 3 development of tenapanor inIBS-C~~ ~~and in hyperphosphatemia, preparing the new drug application, or NDA, for submission to the U.S. Food and Drug Administration, or FDA, to request marketing authorization for tenapanor~~tenapanor.

Ernst & Young LLP, our independent registered public accounting firm for the ~~treatment~~fiscal year ended December 31, 2021, has included an explanatory paragraph in their opinion that accompanies our audited financial statements as of ~~patients~~the year ended December 31, 2021, indicating our current liquidity position raises substantial doubt about our ability to continue as a going concern. We plan to address our operating cash flow requirements with~~IBS-C,~~ ~~completing~~ our current cash and investments, cash generated from the ~~ongoingonset-of-action~~ ~~trial~~product launch of IBSRELA, our potential receipt of anticipated milestone payments from our collaboration partners, our potential receipt of anticipated payments from our collaboration partner, Kyowa Kirin, Co., Ltd. (“KKC”) in connection with the transaction entered into with KKC in March 2022 which amended our License Agreement entered into with KKC in 2017 (the “2022 KKC Amendment”); our ability to access the capital markets, as well as through the implementation of cash preservation activities to reduce or defer discretionary spending.

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There are no assurances that our efforts to meet our operating cash flow requirements will be successful. If our current cash and investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations for at least the ~~Phase 3 clinical trial for RDX7675,~~next twelve months, our liquidity, financial condition and ~~continuing our discovery and research activities.~~

business prospects will be materially affected.

Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. Further, the net losses we incur may fluctuate significantly from ~~quarter to quarter~~quarter-to-quarter and ~~year to year,~~year-to-year, such that aperiod-to-period comparison of our results of operations may not be a good indication of our future performance.

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 will be subject to limitations, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that have occurred previously and additional limitations may be applicable as a result of ownership changes that could occur in the future.

~~We have never generated any revenue from product sales and may never be profitable.~~

We have no products approved for sale and have never generated any revenue from product sales. Our ability to generate revenue from product sales and achieve profitability depends on our ability to successfully complete the development of and obtain the regulatory and marketing approvals necessary to commercialize one or more of our product candidates. We do not anticipate generating revenue from product sales for the foreseeable future. Our ability to generate future revenue from product sales or pursuant to milestone payments depends heavily on many factors, including but not limited to:

~~the successful completion of nonclinical and clinical development of our product candidates;~~

~~obtaining regulatory approvals for our product candidates, either on our own, or with one or more collaboration partners;~~

~~our ability to successfully commercialize our product candidates, either on our own, or with one or more collaboration partners;~~

developing a sustainable and scalable manufacturing process for any approved product candidates and establishing and maintaining supply and manufacturing relationships with third parties that can provide an adequate (in amount and quality) supply of product to support clinical development and the market demand for our product candidates, if approved;

~~obtaining market acceptance of our product candidates, if approved, as viable treatment options;~~

~~addressing any competing technological and market developments;~~

~~identifying, assessing, acquiring, in licensing and/or developing new product candidates;~~

~~negotiating favorable terms in any collaboration partnership, licensing or other arrangements into which we may enter;~~

~~maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, andknow-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.~~

In cases where we are successful in obtaining regulatory approvals to market one or more of our product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which regulatory approval is granted, the accepted price for the product, the ability to get reimbursement at any price and whether we are commercializing the product or the product is being commercialized by a collaboration partner, and in such case, whether we have royalty and/or~~co-promotion~~ rights for that territory. If the number of patients suitable for our product candidates is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from the sale of such products, even if approved. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to generate revenue from product sales would likely depress our market value and could impair our ability to raise capital, expand our business, discover or develop other product candidates or continue our operations. A decline in the value of our common stock could cause our stockholders to lose all or part of their investment.

We will require substantial additional financing to achieve our goals, including our goals of commercializing IBSRELA and preparing for and participating in a Cardiovascular and Renal DrugsAdvisory Committee (“Advisory Committee”) meeting in connection with the formal dispute resolution ("FDR") process commenced in response to the Complete Response Letter (“CRL”) received from the U.S. Food and Drug Administration (“FDA”) relating to our New Drug Application (“NDA”) for tenapanor for the Hyperphosphatemia Indication and the inability to access ~~this~~ necessary capital when needed on acceptable terms, or at all, could force us to ~~delay,~~ limit, reduce or terminate our ~~planned clinical programs for RDX7675, ourpre-commercialization~~efforts to commercialize IBSRELA or to seek and obtain approval for tenapanor ~~or RDX7675, or our other product development and platform development activities.~~

for the Hyperphosphatemia Indication.

Since our inception, most of our resources have been dedicated to our research and development activities, including developing ~~our clinical product candidates,~~ tenapanor ~~and RDX7675,~~ and developing our proprietary drug discovery and design platform. WeFollowing the receipt of the CRL, we implemented two restructuring plans in order to reduce operating costs and to better align our workforce with the needs of our business. Notwithstanding the restructurings, we believe that we will continue to expend substantial resources for the foreseeable future, including, costs associated with ~~conducting~~our efforts to commercialize IBSRELA, which we began selling in the ~~clinical programs~~U.S. in March 2022, cost associated with our efforts to pursue approval for our NDA for tenapanor for the Hyperphosphatemia Indication through the FDR process, and ~~RDX7675, research and development,~~Advisory Committee meeting; conducting ~~preclinical studies and~~pediatric clinical trials for ~~our other programs, obtaining regulatory approvals, developing~~IBSRELA and ~~maintaining scalable~~XPHOZAH, if approved, and manufacturing ~~processes~~ for ~~our product candidates~~IBSRELA and, sales and marketing. Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization or~~co-promotion~~ ~~of any of our product candidates.~~if approved, XPHOZAH. Our future funding requirements will depend on many factors, including, but not limited to:

•the ~~progress, timing, scope, results and costs~~extent to which we are able to generate product revenue from sales of IBSRELA;

•whether we are successful in our ~~clinical trial programs evaluating~~efforts under the FDR process, including the Advisory Committee meeting to be convened as part of the FDR process, to secure approval for our NDA for tenapanor for the ~~treatment of hyperphosphatemia in ESRD patients on dialysis, the completion of our Phase 3 clinical program evaluating tenapanor for the treatment ofIBS-C,~~ ~~and the subsequent submission of an NDA~~Hyperphosphatemia Indication, or to reach resolution with the FDA regarding a path to ~~request marketing authorization, as well as our decision whether or not to pursue other indications for tenapanor;~~

address the ~~progress, timing, scope, results~~deficiencies in the NDA noted in the CRL and ~~costs of our clinical programs for RDX7675;~~

ADL, and the time and cost ~~necessary to obtain regulatory approvals~~associated with such path;

•the availability of adequate third-party reimbursement for ~~our product candidates~~IBSRELA and, if approved, the sales price and the ~~costs~~availability of ~~post-marketing studies that could be required by regulatory authorities;~~adequate third-party reimbursement for XPHOZAH;

~~our ability to successfully commercialize our product candidates, either alone or with one or more collaboration partners;~~

•the manufacturing costs of ~~our product candidates,~~IBSRELA and ~~the availability of one or more suppliers for our product candidates at reasonable costs, both for clinical and commercial supply;~~XPHOZAH;

•the selling and marketing costs associated with ~~our product candidates, including the cost~~IBSRELA and, ~~timing of building our sales and marketing capabilities, should we elect to do so;~~if approved, XPHOZAH;

•our ability to ~~establish and~~ 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 revenue, if any, that may be received from KKC in connection with the 2022 KKC Amendment;

•the timing, receipt, and amount of sales of, or royalties on, ~~our future products,~~tenapanor, if any;

~~the sales price and the availability of adequate third-party reimbursement for our product candidates;~~

•the cash requirements of any future acquisitions or discovery of product candidates;

~~the number and scope of preclinical and discovery programs that we decide to pursue or initiate, and~~ •any clinical trials we are required to or decide to pursue for ~~other product candidates;~~tenapanor or RDX013;

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

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•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, including 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.~~candidates; and

•the payment of interest and principal related to our loan and security agreement entered into with SLR Investment Corp. in February 2022.

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,~~ limit, reduce or terminate ~~the clinical development~~our commercialization of ~~RDX7675,~~IBSRELA, delay, limit, reduce or terminate our ~~research activities, preclinical and~~efforts to secure approval for XPHOZAH for the Hyperphosphatemia Indication, or clinical trials for tenapanor. Additionally, our ~~other product candidates~~inability to access capital on a timely basis and on terms that are acceptable to us may force us to restructure certain aspects of our ~~establishment~~business or identify and ~~maintenance of sales and marketing capabilities~~complete one or more strategic collaborations or other ~~activities~~transactions in order to fund the commercialization of IBSRELA or the development and commercialization of XPHOZAH, if approved, through the use of alternative structures.

Our failure to meet the continued listing requirements of The Nasdaq Global Market could result in a de-listing of our common stock.

If we fail to satisfy the continued listing requirements of The Nasdaq Global Market ("Nasdaq") such as the minimum stockholders’ equity requirement or the minimum closing bid price requirement, Nasdaq may take steps to de-list our common stock. For example, on February 28, 2022 we received a letter from Nasdaq indicating that Nasdaq had determined that we had failed to comply with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2). Nasdaq Listing Rule 5550(a)(2) requires that companies listed on the Nasdaq Global Market maintain a minimum closing bid price of at least $1.00 per share (the “Listing Requirement”). We received a letter from Nasdaq on March 31, 2022, indicating that the Company had regained compliance with the Listing Requirement after the closing bid price for its common stock listed on Nasdaq equaled or exceeded $1.00 per share for ten (10) consecutive business days, and confirming that the Company will remain in compliance with this Listing Requirement as long as the closing bid price of its common stock does not fall below $1.00 for thirty (30) consecutive business days. On April 8, 2022, the closing bid price of our common stock listed on Nasdaq was below $1.00 per share, and there can be no assurances that we will continue to remain in compliance with the Listing Requirement. In the event that we are not able to remain in compliance with the Listing Requirement, there can be no assurances that we will be able to regain compliance with the Listing Requirement in the time frame that may be ~~necessary~~afforded us by Nasdaq. We are monitoring the bid price of our common stock and will consider options available to us, including the implementation of a reverse stock split, to maintain or regain, if required, compliance with the Listing Requirement. On April 29, 2022, we filed our definitive Proxy Statement with the U.S. Securities and Exchange Commission (the “SEC”) indicating our intention to seek approval from our stockholders during our Annual Meeting of Stockholders to be held on June 15, 2022, for a proposal to grant our Board of Directors authority to effect a reverse stock split of our authorized common stock and issued and outstanding common stock by amending our Amended and Restated Certificate of Incorporation by September 15, 2022 and within a range of not less than 1-for-2 and not more than 1-for-10, if our Board of Directors deems it within our best interests. There can be no assurances that our stockholders will approve the proposal, or that we will have other options available to maintain compliance with the Listing Requirement. If we fail to maintain compliance with this requirement, or any other of the continued listing requirements of The Nasdaq Global Market, Nasdaq may take steps to de-list our common stock.

If Nasdaq de-lists our securities for trading on the Nasdaq or takes other actions with respect to our Nasdaq listing, we could face significant adverse consequences, including:

• a limited availability of market quotations for our common stock;

• reduced liquidity with respect to our common stock;

• reduced trading volume in and market price of our common stock;

• a limited amount of news and analyst coverage for our company; and

• a decreased ability to issue additional securities or obtain additional financing in the future.

Such a de-listing would likely have an adverse effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. We may take actions to avoid such a de-listing or in the event of a de-listing, we may take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to remain listed or to become listed again, stabilize the market price or improve the liquidity or trading volume of our common stock, prevent our common capitalization and stockholder’s

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equity from dropping below the Nasdaq minimum requirements, or prevent other future non-compliance with Nasdaq’s continued listing requirements.

We have generated limited revenue from product sales and may never be profitable.

We began selling IBSRELA in the U.S. in March 2022, and have generated limited revenue from product sales to date. We have no other products approved for sale and have received a CRL from the FDA for our NDA for the Hyperphosphatemia Indication and an Appeal Denied Letter (“ADL”) in response to our first level of appeal of the CRL to the FDA Office of Cardiology, Hematology, Endocrinology and Nephrology (“OCHEN”). Additionally, we have received an Interim Response to our second level of appeal to the Office of New Drugs (“OND”), Center for Drug Evaluation and Research (CDER), indicating that OND intends to direct the Division of Cardiology and Nephrology of OCHEN (the “Division”) to bring the XPHOZAH NDA to the Advisory Committee (the “Interim Response”). There can be no assurances that any such Advisory Committee will recommend approval of our NDA for tenapanor for the Hyperphosphatemia Indication, or that if approval is recommended, that such approval will ultimately be granted by the FDA. To date, we have generated limited product revenue from product sales of IBSRELA. There can be no assurances that we will be successful in increasing the amount of product revenue from sales of IBSRELA. Our ability to generate revenue from product sales and achieve profitability depends on our ability to successfully commercialize IBSRELA; obtain approval by the FDA for the Hyperphosphatemia Indication, and subsequently successfully commercialize XPHOZAH for the Hyperphosphatemia Indication; and the ability of our collaboration partners to obtain regulatory approval to market tenapanor in their respective territories. There can be no assurances that we will generate sufficient product revenue from sales of IBSRELA and, if approved, XPHOZAH, to cover our expenses. Our ability to generate product revenue from sales or pursuant to milestone payments depends heavily on many factors, including but not limited to:

•our ability to successfully commercialize IBSRELA;

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

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

•whether we are successful in our efforts during the Advisory Committee meeting and under the FDR process to secure approval for our NDA for tenapanor for the Hyperphosphatemia Indication, or whether we are otherwise able during the FDR to reach resolution with the FDA regarding a path to addressing the deficiencies in our NDA noted in the CRL, ADL and Interim Response that is achievable in terms of clinical study design, time and cost;

•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, if approved, XPHOZAH;

•addressing any competing technological and market developments;

•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 if we are successful in obtaining regulatory approval to market XPHOZAH, our revenue will be dependent, in part, upon the size of the markets in the U.S. and the label for which approval is or was granted, acceptance of the price for the product, and the ability to get reimbursement at any price. While there is significant uncertainty related to the insurance coverage and reimbursement of newly approved products in general in the United States, there is additional uncertainty related to insurance coverage and reimbursement for drugs, like XPHOZAH, which, if approved, will be marketed for the control of serum phosphorus in adult patients with CKD on dialysis or for another other related indication. If we are successful in obtaining regulatory approval to market XPHOZAH for such indication, our ability to generate and sustain future revenues from sales of tenapanor for such indication, may be dependent upon whether and when XPHOZAH, along with other oral ESRD related drugs without an injectable or intravenous equivalent, are bundled into the ESRD prospective payment system, and the manner in which such introduction into the ESRD prospective payment system may occur. See “Third-party payor coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for IBSRELA or, if approved, XPHOZAH, could limit our ability to market those products and decrease our ability to generate revenue” below. Additionally, if the number of adult patients for IBSRELA or, if approved, XPHOZAH is not as significant as we estimate, the indication approved by regulatory authorities for XPHOZAH is narrower than we expect, coverage and reimbursement for either ~~alone~~IBSRELA or, ~~with a collaboration partner.~~

if approved, XPHOZAH are not available in the manner and to the extent we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from the sale of IBSRELA or, if approved, XPHOZAH. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to generate adequate revenue from product sales would likely depress our market value and could impair

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our ability to raise capital, expand our business, discover or develop other product candidates or continue our operations. A decline in the value of our common stock could cause our stockholders to lose all or part of their investment.

Principal Risks Related to Our Business

We are substantially dependent on the successful launch and commercialization of IBSRELA for IBS-C, and there is no guarantee that we will achieve sufficient market acceptance for IBSRELA; secure adequate coverage and reimbursement for IBSRELA; or generate sufficient revenue from product sales of IBSRELA.

We began selling IBSRELA, our approved treatment for IBS-C in adults 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 launch and market demand for IBSRELA;

•our ~~lead product candidate, tenapanor,~~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;

•the size of the treatable patient population;

•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;

•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.

Our potential to achieve revenue from the commercialization of IBSRELA and the amount of such potential revenue 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 secure adequate physician and patient acceptance of IBSRELA or adequate coverage and reimbursement for IBSRELA, we may not generate sufficient revenue from sales of IBSRELA. Any failure of IBSRELA to achieve market acceptance, sufficient third-party coverage or reimbursement, or commercial success for would adversely affect our results of operations.

Our success is also dependent upon our ability to obtain regulatory approval for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis, and there can be no assurances that we will be successful in ~~nonclinical studies or clinical trials, receive~~obtaining such regulatory approval.

Our success is also dependent upon our ability to obtain regulatory approval ~~or be successfully commercialized.~~

for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis. To date, we have invested a significant amount of our efforts and financial resources in the research and development of tenapanor ~~which~~for the control of serum phosphorus in adult patients with CKD on dialysis. On July 28, 2021, we received a CRL from the Division regarding our NDA for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis. According to the CRL, the FDA has determined that the magnitude of the treatment effect observed in our Phase 3 clinical trials was small and of unclear of clinical significance. Following an End-of-Review Type A meeting (“End of Review Meeting”) in October 2021, with the Division, we submitted a Formal Dispute Resolution Request (“FDRR”) in December 2021. The FDRR was focused on demonstrating that the data submitted in the NDA supported the clinical significance of the treatment effect of tenapanor. On February 4, 2022, we received an ADL from OCHEN. On February 18, 2022, we submitted an appeal of the ADL to the FDA’s Center for Drug Evaluation and Research, Office of New Drugs (“OND”), and on April 15, 2022, we received an Interim Response from OND. The Interim response indicated that OND intends to direct the Division to bring the XPHOZAH NDA to the Advisory Committee. We are currently awaiting further guidance from OND regarding the timing of the Advisory Committee meeting. OND expects to provide a response to the FDR within thirty (30) days after the conclusion of the Advisory Committee meeting. There can be no

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assurances that the Advisory Committee will recommend approval of our NDA for tenapanor for the Hyperphosphatemia Indication, or that if approval is ~~currently~~recommended, that such approval will ultimately be granted by the FDA.

Even if we are successful in obtaining regulatory approval for tenapanor for control of serum phosphorus in adult patients with CKD on dialysis, the expense and time required to do so could adversely impact our ~~lead product candidate~~ability to successfully commercialize XPHOZAH for the Hyperphosphatemia Indication.

We may not be successful in obtaining approval for tenapanor for the Hyperphosphatemia Indication, and ~~one~~if we are able to obtain approval, the expense and time to do so could adversely impact our ability to successfully commercialize XPHOZAH for the Hyperphosphatemia Indication, our business and our results of ~~only two product candidates~~operations. If we are successful in ~~clinical trials. The clinical and~~obtaining approval for XPHOZAH for the Hyperphosphatemia Indication, the commercial success of ~~tenapanor~~XPHOZAH will depend on a number of factors, including the following:

~~our ability to, in a timely manner and under terms that are acceptable to us, to establish one or more collaborative relationships for the commercialization of tenapanor;~~

•the ability of the third-party manufacturers we contract with to ~~successfully execute~~provide an adequate (in amount and ~~scale up~~quality) supply of product to support the ~~manufacturing processes~~market demand for ~~tenapanor, which has~~both IBSRELA and XPHOZAH;

•whether or not ~~yet been demonstrated,~~the content and ~~to manufacture supplies~~breadth of ~~tenapanor and to develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP, requirements;~~

~~whether~~the label approved by the FDA for XPHOZAH may materially and adversely impact our ability to commercialize the product for the approved indication;

•whether or ~~foreign regulatory authorities require additional nonclinical and/~~when XPHOZAH, along with other oral end-stage renal disease (“ESRD”) related drugs without an injectable or ~~clinical studies,~~intravenous equivalent, are bundled into the ESRD prospective payment system, and the manner in which ~~could delay~~such introduction into the ~~commercialization of tenapanor;~~ESRD prospective payment system may occur;

~~whether the FDA or foreign regulatory authorities require us to conduct clinical trials in addition to those anticipated prior to approval to market tenapanor;~~

~~whether we will be required to conduct clinical trials in addition to those anticipated to obtain adequate commercial pricing;~~

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

~~whether tenapanor’s safety and efficacy profile is satisfactory to the FDA and foreign regulatory authorities to gain marketing approval;~~

~~the timely receipt of necessary marketing approvals from the FDA and foreign regulatory authorities;~~

our ability, either alone, or with a collaboration partner, to successfully commercialize tenapanor, if approved for marketing and sale by the FDA or foreign regulatory authorities, including educating physicians and patients about the benefits, administration and use of tenapanor;

~~achieving and maintaining compliance with all regulatory requirements applicable to tenapanor;~~

•acceptance of ~~tenapanor~~XPHOZAH as safe, effective and well-tolerated by patients and the medical ~~community;~~community, and, the extent to which the issuance of a CRL by the FDA has impacted the potential acceptance of XPHOZAH as safe, effective and well-tolerated;

•our ability to manage the commercialization of IBSRELA and XPHOZAH and the complex pricing and reimbursement negotiations ~~associated~~that may arise with marketing the same product at different doses for separate ~~indications, if tenapanor is approved for marketing and sale by the FDA or foreign regulatory authorities for bothIBS-C~~ ~~and hyperphosphatemia in dialysis patients;~~indications;

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

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

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

~~avoiding~~•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 ~~tenapanor~~XPHOZAH following approval.

~~As tenapanor is afirst-in-class~~ ~~drug, there is a higher likelihood~~

IBSRELA, and/or, if approved and commercialized, XPHOZAH, may cause undesirable side effects or have other properties that ~~approval may not be attained as compared~~could limit the commercial success of the product.

Undesirable side effects caused by IBSRELA, and/or, if approved, XPHOZAH, could cause us or regulatory authorities to ~~a class~~interrupt, delay or halt the commercialization of ~~drugs with approved products. While tenapanor met~~ the ~~primary endpoint~~product. To date, the most common adverse reactions reported in at least 2% of patients in IBSRELA-treated patients and at an incidence greater than placebo in the two Phase 3 ~~clinical studies evaluating tenapanor~~trials include: diarrhea, abdominal distension, flatulence and dizziness. Despite our receipt of marketing approval for IBSRELA and the ~~treatment~~completion of ~~patients withIBS-C,~~ ~~there can be no assurance that~~ our NDA that we plan to submit for this indication, once submitted, will be accepted by FDA or that we will receive marketing authorization from FDA. Although tenapanor met the primary endpoint in the first Phase 3 clinical ~~trial~~program for XPHOZAH, the prevalence and/or severity of these or other side effects could result in a number of potentially significant negative consequences could occur, 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 ~~treatment~~product or any component thereof, including the imposition of ~~hyperphosphatemia~~a Risk Evaluation and Mitigation Strategy (“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;

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•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;

•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, if approved, XPHOZAH, and could result in ~~ESRD patients on dialysis,~~the loss of significant revenue to us, which would materially and adversely affect our results of operations and business..

As a company, we have no prior experience in the marketing, sale and distribution of pharmaceutical products; and there are significant risks in building and managing a commercial organization.

As a company, we have no prior experience in building and managing a commercial organization, or in the marketing, sale and distribution of pharmaceutical products. There can be no assurances that we will be successful in our efforts to retain, and incentivize qualified individuals, generate sufficient sales leads, comply with regulatory requirements applicable to the ~~second Phase 3 trial~~marketing and sale of drug products and effectively manage a geographically dispersed sales and marketing team.

If we fail or are delayed in the development of our internal sales, marketing and distribution capabilities, the commercialization of IBSRELA could be adversely impacted.

Our operating activities may be restricted as a result of covenants related to the indebtedness under our loan and security agreement 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 with SLR Investment Corp. (the “Lender”) pursuant to which the Lender agreed to provide us a $50.0 million term loan facility with a maturity date of March 1, 2027. The loan was funded in the amount of $27.5 million on February 23, 2022 and the remaining $22.5 million may be funded upon the satisfaction of both (i) receipt from the FDA of approval of the NDA for tenapanor for the Hyperphosphatemia Indication on or prior to December 31, 2022 and (ii) our achievement of certain product revenue milestone targets described in ~~this indication~~the 2022 Loan Agreement. Until we have repaid all funded indebtedness, the loan and security 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.

We are permitted to make interest only payments on the loan facility through March 2024, with principal repayments commencing on April 1, 2024, however, we may be required to repay the outstanding indebtedness under the loan facility if an event of default occurs under the loan and security agreement. An event of default will ~~achieve~~occur if, among other things, we fail to make payments under the ~~primary endpoint,~~loan and security agreement; we breach any of our covenants under the loan and security 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 ~~tenapanor~~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 delay, limit, reduce or terminate our activities necessary to commercialize IBSRELA, and/or if approved, XPHOZAH, or clinical trials for tenapanor. The Lender 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.

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, if approved, XPHOZAH, could limit our ability to market those products and decrease our ability to generate revenue.

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The pricing, coverage and reimbursement of IBSRELA and, if approved, 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, if approved and commercialized, XPHOZAH, will ~~receive regulatory approval. Further, it~~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 ~~possible or practicable~~able to ~~demonstrate,~~successfully commercialize IBSRELA, or, if approved, XPHOZAH. Even if coverage is provided, the approved reimbursement amount may not be high enough to ~~market, tenapanor~~allow us to establish or maintain pricing sufficient to realize a return on our investment.

There is significant uncertainty related to the ~~basis~~insurance coverage and reimbursement of ~~certain~~newly approved products. In the United States, the principal decisions about coverage and reimbursement for new drugs are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the United States Department of Health and Human Services responsible for administering the ~~benefits we believe tenapanor possesses. For example,~~Medicare program, as CMS decides whether and to what extent a new drug will be covered and reimbursed under Medicare. Private payors tend to follow the ~~reduction~~coverage reimbursement policies established by CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for products such as ours.

There is increased uncertainty related to insurance coverage and reimbursement for drugs, like XPHOZAH for the Hyperphosphatemia Indication, which, if approved, will be marketed for the control of serum phosphorus ~~is currently an approvable endpoint~~ in ~~ESRD~~adult patients with CKD on dialysis ~~but not~~or for another other related indication. In January 2011, CMS implemented a new prospective payment system for dialysis treatment. Under the ESRD prospective payment system, 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. The inclusion of oral medications without injectable or intravenous equivalents in the bundled payment was initially delayed until January 1, 2014, and through several subsequent legislative actions was delayed until January 1, 2025. As a result, absent further legislation or regulation on this matter, beginning in 2025, oral ESRD-related drugs without injectable or intravenous equivalents may be included in the ESRD bundle and separate Medicare payment for these drugs will no longer be available, as is the case today under Medicare Part D. While it is too early to project the full impact that bundling may have on sales of XPHOZAH, if approved and commercialized, and on our business should XPHOZAH be brought into the bundle in 2025, or at any time, we may be unable to sell XPHOZAH for the ~~broader CKD patient population~~Hyperphosphatemia Indication, if approved, to dialysis providers on a profitable basis if third-party payors reduce their current levels of payment, or if our costs of production are higher than levels necessary for an appropriate gross margin after payment of all discounts, rebates and chargebacks.

Outside the United States, 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. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.

Moreover, increasing efforts by governmental and third-party payors in the United ~~States.~~States 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 if approved and commercialized, 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 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, if approved and commercialized, XPHOZAH, and our future development efforts for tenapanor may be materially harmed.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture IBSRELA, or any of other our product candidates on a commercial scale, or to manufacture our drug supplies for use in the conduct of our nonclinical and clinical studies. The facilities used by our contract manufacturers to manufacture our drug supply are subject to

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inspection by the FDA. Our ability to control the manufacturing process of our product candidates is limited to the contractual requirements and obligations we impose on our contract manufacturer. Although they are contractually required to so do, we are completely dependent on our contract manufacturing partners for compliance with the regulatory requirements, known as current Good Manufacturing Practice requirements (“cGMPs”), 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 contract manufacturers 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 ~~patients~~sources. Any delay or disruption in the ~~market for tenapanor~~availability of these raw materials could result in production disruptions, delays or higher costs with consequent adverse effects on us.

If our contract manufacturers fail to adhere to applicable GMP or other regulatory requirements, experience delays or disruptions in the ~~price that the market can bear is not as significant as we estimate,~~availability of raw materials or experience manufacturing or distribution problems, we may ~~not generate sufficient revenue from sales~~suffer significant consequences, including the inability to meet our product requirements for our clinical development programs, and if tenapanor is commercialized for any indication, such events could result in product seizures or recalls, loss of ~~tenapanor,~~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 ~~approved. Accordingly, there can be no assurance that tenapanor will ever be successfully commercialized~~maximum or ~~that we will ever generate income from sales of tenapanor. If we~~available manufacturing capacities are ~~not successful in completing the~~insufficient to meet demand, our development ~~of, obtaining approval~~or our commercialization efforts for ~~and commercializing tenapanor,~~ IBSRELA, and/or, ~~are significantly delayed in doing so, our business will~~if approved, XPHOZAH, may be materially harmed.

Additional Risks Related to Our Business and Industry

Clinical drug development involves a lengthy and expensive process with an uncertain ~~outcome, and we may encounter substantial delays in our clinical studies. Furthermore, results of earlier studies and trials may not be predictive of future trial results.~~

outcome.

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. ~~Failure can occur at any time during the clinical trial process. The results of preclinical and clinical studies of our product candidates may not be predictive of~~For example, while the results of ~~later-stage~~our Phase 2 clinical trials. An unexpected adverse event profile, or the results of drug-drug interaction studies, may present challenges for the future development and commercialization of a product candidate for a particular condition despite receipt of positive efficacy data in a clinical study. Although tenapanor met the primary endpoint in the first Phase 3 clinical trial evaluating RDX013 for the treatment of ~~hyperphosphatemia~~hyperkalemia demonstrated an acceptable safety and tolerability profile for RDX013 and supported proof of concept in ~~ESRD patients on dialysis, there~~its ability to lower serum potassium levels, with statistically significant reductions compared to placebo after eight days of treatment, the study did not meet its primary endpoint of significantly reducing serum potassium levels compared to placebo after four weeks of treatment. We currently expect that the next step for the program will be to evaluate a new formulation that potentially enhances subject compliance and the efficacy of RDX013 in an additional Phase 2 clinical study at such time as we have determined that our available resources support conducting such an additional clinical study. There can be no assurances that ~~the second Phase 3 trial results of tenapanor in~~any additional clinical study that ~~indication~~we determine to conduct with RDX013 will ~~show the desired safety and efficacy. While tenapanor met the primary endpoint in two Phase 3~~be successful.

Additionally, if we conduct additional clinical trials ~~evaluating tenapanor for the treatment ofIBS-C~~ ~~patients, there can be no assurance thatT3MPO-3,~~ ~~the long-term safety study of tenapanor~~with RDX013, we could encounter delays in ~~patients withIBS-C,~~ ~~will demonstrate acceptable long-term safety. A number of companies in the pharmaceutical, biopharmaceutical and biotechnology industries have suffered significant setbacks in advanced~~our future development if any clinical trials ~~for similar indications that we~~ are pursuing due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies, and we cannot be certain that we will not face similar setbacks. Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval for our product candidates, or if such regulatory approval is obtained, the content of the label approved by regulatory authorities may materially and adversely impact our ability to commercialize the product.

We do not know whether future clinical trials will begin on time, or whether our ongoing or future clinical trials will need to be redesigned, enroll an adequate number of patients on time or be completed on schedule, if at all. Clinical trials can be delayed or terminated for a variety of reasons, including delay or failure to:

~~manufacture sufficient quantities of product candidate meeting specified quality standards for use in clinical trials;~~

~~obtain regulatory approval to commence a trial, if applicable;~~

reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

~~obtain institutional review board, or IRB, approval at each site;~~

~~recruit suitable patients in a timely manner to participate in our trials;~~

~~have patients complete a trial or return for post-treatmentfollow-up;~~

~~ensure that clinical sites observe trial protocol, comply with good clinical practices, or GCPs, or continue to participate in a trial;~~

~~address any patient safety concerns that arise during the course of a trial;~~

~~address any conflicts with new or existing laws or regulations; or~~

~~initiate or add a sufficient number of clinical trial sites.~~

Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating.

~~We could also encounter delays if a clinical trial is~~ suspended or terminated by us, by the IRBs of the institutions in which ~~such trials are~~the trial is being conducted, ~~by an independent data safety monitoring board for such trial~~ 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.

~~Further, if there are~~

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, including any additional RDX013 clinical trial 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

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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 the ~~completion of,~~program, or termination of any clinical trial of our product candidates, the commercial prospects of our product candidates may be harmed, and our ability to generate revenue from product sales from any of these product candidates will be delayed. In addition, any delays in completing the clinical ~~trials will increase costs, slow down our product candidate development and approval process and jeopardize the ability to commence product sales and generate revenue from product sales.~~studies altogether. Any of these occurrences may significantly harm our business, financial condition and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

We intend to devote significant resources to the development of RDX7675 which may not be successful in nonclinical studies or clinical trials, receive regulatory approval or be successfully commercialized.

~~In connection with the ongoingonset-of-action~~ clinical trial and the Phase 3 clinical trial for RDX7675, we expect to invest a significant amount of our efforts and financial resources in the development of RDX7675. We are pursuing a 505(b)(2) regulatory path for approval of RDX7675, which, among other things allows us to rely on the FDA’s previous findings of safety and efficacy and may eliminate the need to conduct certain nonclinical and clinical studies of our product candidate. This regulatory pathway, which can accelerate development, may not be available to us if a pharmaceutically equivalent product to RDX7675 were approved prior to the approval of our 505(b)(2) application. If we are unable to rely upon a 505(b)(2) regulatory pathway for the approval of RDX7675, the development of RDX7675 may be substantially delayed or we may be required to abandon such development.

~~The clinical and commercial success of RDX7675~~ will ~~depend on a number of factors, including the following:~~

the ability of the third-party manufacturers we contract with, to successfully develop and scale up the manufacturing processes for RDX7675, which has not yet been demonstrated, to manufacture supplies of RDX7675 and to develop, validate and maintain commercially viable manufacturing processes that are compliant with cGMP, requirements;

the significant expansion of the market for the treatment of hyperkalemia beyond its currently limited size, including the success of commercial launches of new hyperkalemia products and the use of any such products by nephrologists and cardiologists in the chronic setting;

~~our ability to successfully obtain labeling claims necessary or desirable for the commercial success of RDX7675;~~

the availability of, and the perceived advantages regarding the relative palatability, relative cost, relative safety, relative tolerance and relative efficacy of RDX7675 and alternative and competing treatments;

~~the strength and breadth of any intellectual property protection that we have or may be granted for RDX7675, and our enforcement of any intellectual property rights in RDX7675;~~

~~the timely receipt of necessary marketing approvals and exclusivity periods, if any, from the FDA and foreign regulatory authorities;~~

our ability to successfully commercialize RDX7675, if approved for marketing and sale by the FDA or foreign regulatory authorities, including educating physicians and patients about the benefits, administration and use of RDX7675;

~~obtaining and sustaining an adequate level of coverage and reimbursement for RDX7675 by third-party payors; and~~

~~the effectiveness of our marketing, sales and distribution strategy and operations.~~

We cannot be certain that clinical trials evaluating RDX7675 will establish a safety and efficacy profile sufficient to enable RDX7675 to gain approval by the FDA, or if approved, compete effectively with alternative and competing treatments. Further, it may not be possible or practicable to demonstrate, or if approved, to market, RDX7675 on the basis of certain of the benefits we believe RDX7675 may possess. Accordingly, there can be no assurance that RDX7675 will ever be successfully commercialized or that we will ever generate revenue from sales of RDX7675. If we are not successful in completing the development of, obtaining approval for, and commercializing RDX7675, or are significantly delayed in doing so, our business will be materially harmed.

We may not be successful in our efforts to develop our product candidates that are at an early stage of development, including RDX8940 or expand our pipeline of product candidates, as a result of numerous factors, which may include the inability to access capital necessary to fund such efforts on acceptable terms.

A key element of our strategy has been focused on the expansion of our pipeline of product candidates utilizing our proprietary drug discovery and design platform and to advance such product candidates through clinical development. In December 2016, we filed an IND to commence clinical development of RDX8940 in the United States. In August 2017, we completed a comprehensive strategic review of our operations, assessing several core areas, to optimally position the company to advance towards delivering on multiple significant opportunities with our late-stage portfolio and execute on our strategic objectives. This review resulted in the prioritization of resources to focus on the upcoming milestones for the late-stage programs, a delay in the development of a number of earlier-stage programs, including RDX8940, and a reduction in workforce. RDX8940 and those product candidates that are in the discovery and lead identification stages of preclinical development will require substantial preclinical and clinical development, testing and regulatory approval prior to commercialization, and we may not be able to access the capital necessary to fund such efforts on acceptable terms. In addition, of the large number of drugs in development, only a small percentage of such drugs successfully complete the FDA regulatory approval process and are commercialized. Accordingly, even if we are able to continue to fund our research and early stage development programs, there can be no assurance that any product candidates will reach the clinic or be successfully developed or commercialized.

Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. Although our research and development efforts to date have resulted in several development programs, we may not be able to develop product candidates that are safe, effective and well-tolerated. Our research programs may initially show promise in identifying potential product candidates, and we may select candidates for development, yet we may fail to advance product candidates to clinical development for many reasons, including the following:

we may be unable to access sufficient capital on acceptable terms to fund the development of all of our assets and as a result we may be forced to delay or terminate the development of certain product candidates;

~~the research methodology used and our drug discovery and design platform may not be successful in identifying potential product candidates;~~

~~competitors may develop alternatives that render our product candidates obsolete or less attractive;~~

~~product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights;~~

~~the market for a product candidate may change during our program so that the continued development of that product candidate is no longer reasonable;~~

a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective, well-tolerated or otherwise does not meet applicable regulatory or commercial criteria;

~~a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and~~

~~a product candidate may not be accepted as safe, effective and well-tolerated by patients, the medical community or third-party payors, if applicable.~~

Even if we are successful in continuing to expand our pipeline, through our own research and development efforts, the potential product candidates that we identify or for which we acquire rights may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to receive marketing approval and achieve market acceptance. If we do not successfully develop and commercialize a product pipeline, we may not be able to generate revenue from product sales in future periods or ever achieve profitability.

Our proprietary drug discovery and design platform, and, in particular, APECCS, is a new approach to the discovery, design and development of new product candidates and may not result in any products of commercial value.

We have developed a proprietary drug discovery and design platform to enable the identification, screening, testing, design and development of new product candidates, and have developed APECCS as a component of this of this platform. We utilize APECCS in the design of our small molecules and to identify new and potentially novel targets in the GI tract. However, there can be no

assurance that APECCS will be able to identify new targets in the GI tract or that any of these potential targets or other aspects of our proprietary drug discovery and design platform will yield product candidates that could enter clinical development and, ultimately, be commercially valuable.

We rely on third parties to conduct ~~some~~all of our nonclinical studies and ~~all of our~~ 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 and, in some cases, nonclinical studies.~~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 ~~some of~~ our nonclinical studies and ~~all of~~ 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 good clinical practices ~~or GCPs,~~(“GCPs”) for clinical studies. GLPs and GCPs are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area ~~or EEA,~~(“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~~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 FDA, the European Medicines Agency ~~or EMA,~~(“EMA”), 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 would delay the regulatory approval process.

Even if our product candidates obtain regulatory approval, they may never achieve market acceptance or commercial success, which will depend, in part, upon the degree of acceptance among physicians, patients, patient advocacy groups, health care payors and the medical community.

Even if our product candidates obtain FDA or other regulatory approvals, and are ultimately commercialized, our product candidates may not achieve market acceptance among physicians, patients, third-party payors, patient advocacy groups, and the medical community. Market acceptance of our product candidates for which marketing approval is obtained depends on a number of factors, including:

~~the efficacy of the products as demonstrated in clinical trials;~~

~~the prevalence and severity of any side effects and overall safety and tolerability profile of the product;~~

~~the clinical indications for which the product is approved;~~

~~advantages over new or traditional or existing therapies, including recently approved therapies or therapies that the physician community anticipate will be approved;~~

~~acceptance by physicians, major operators of clinics and patients of the product as a safe, effective and well-tolerated treatment;~~

~~relative convenience and ease of administration of our products;~~

~~the potential and perceived advantages of our product candidates over current treatment options or alternative treatments, including future alternative treatments;~~

~~the cost of treatment in relation to alternative treatments and willingness to pay for our products, if approved, on the part of physicians and patients;~~

~~the availability of alternative products and their ability to meet market demand;~~

~~the strength of our or our collaboration partners’ marketing and distribution organizations;~~

~~the quality of our relationships with patient advocacy groups; and~~

~~sufficient third-party coverage or reimbursement.~~

~~Any failure by our product candidates that obtain regulatory approval to achieve market acceptance or commercial success would adversely affect our results of operations.~~

Our product candidates may cause undesirable side effects or have other properties that could delay our clinical trials, or delay or prevent regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if any. If any of our product candidates receives marketing approval and we or others later identify undesirable side effects caused by the product candidate, the ability to market the product candidates could be compromised.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials, result in the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities or limit the commercial profile of an approved label. To date, patients treated with tenapanor have experienced drug-related side effects including diarrhea, nausea, flatulence, abdominal discomfort, abdominal pain, abdominal distention and changes in electrolytes. In the event that trials conducted by us with tenapanor or trials we conduct with our other product candidates, reveal an unacceptable severity and prevalence of these or other side effects, such trials could be suspended or terminated and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of tenapanor, or any such other product candidate, for any or all targeted indications. Additionally, despite a positive efficacy profile, the prevalence and/or severity of these or other side effects could cause us to cease further development of a product candidate for a particular indication, or entirely. The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.

In addition, in the event that any of our product candidates receives regulatory approval and we or others later identify undesirable side effects caused by one of our products, a number of potentially significant negative consequences could occur, including:

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

~~we 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 Risk Evaluation and Mitigation Strategies, or REMS, plan that may require creation of a Medication Guide outlining the risks of such side effects for distribution to patients, as well as elements to assure safe use of the product, such as a patient registry and training and certification of prescribers;

~~we may be subject to fines, injunctions or the imposition of civil or criminal penalties;~~

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

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

~~the product may become less competitive; and~~

~~our reputation may suffer~~

Any of the foregoing events could prevent us from achieving or maintaining market acceptance of a particular product candidate, if approved, and could result in the loss of significant revenue to us, which would materially and adversely affect our results of operations and business.

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. If approved for marketing by the FDA or other regulatory agencies, tenapanor, ~~and RDX7675,~~ as well as our other product candidates, would compete against existing treatments.

For example, tenapanor will, if approved, compete directly with phosphate binders for the treatment of hyperphosphatemia in ESRD patients on dialysis. The various types of phosphate binders commercialized in the United States include the following:

~~Calcium carbonate (manyover-the-counter~~ ~~brands including Tums and Caltrate)~~

~~Calcium acetate (several prescription brands including PhosLo and Phoslyra)~~

~~Lanthanum carbonate (Fosrenol marketed by Shire)~~

~~Sevelamer hydrochloride (Renagel, marketed by Sanofi)~~

~~Sevelamer carbonate (Renvela, marketed by Sanofi)~~

~~Sucroferric oxyhydroxide (Velphoro, marketed by Vifor Fresenius)~~

~~Ferric citrate (Auryxia, marketed by Keryx)~~

The hydrochloride form of sevelamer, Renagel, was launched in the United States by Genzyme Corporation in 1998 prior to its acquisition by Sanofi, and the carbonate form, Renvela, was launched in 2008. Sanofi booked €922 million ($1.05 billion) in worldwide sales of sevelamer during 2016 and €494 million in first half of 2017. Generic sevelamer carbonate has been approved in certain jurisdictions in Europe since 2015 and in the U.S. market since June 2017. In addition to the currently marketed phosphate binders, we are aware of at least two other binders in development, including fermagate (Alpharen), an iron-based binder in Phase 3 being developed by Opko Health, Inc., and PT20, an iron-based binder in Phase 3 being developed by Shield Therapeutics.

~~Numerous~~numerous treatments exist for constipation and the constipation component ofIBS-C, many of which areover-the-counter. These include psyllium husk (such as Metamucil), methylcellulose (such as Citrucel), calcium polycarbophil (such as FiberCon), lactulose (such as Cephulac), polyethylene glycol (such as MiraLax), sennosides (such as Exlax), bisacodyl (such as Ducolax), docusate sodium (such as Colace), magnesium hydroxide (such as Milk of Magnesia), saline enemas (such as Fleet), and sorbitol. These agents are generally inexpensive and work well to temporarily relieve constipation.

We are ~~also~~ aware of ~~two~~four prescription products marketed for certain patients with IBS-C, including Linzess (linaclotide) ~~marketed by Ironwood Pharmaceuticals and Allergan and~~, Amitiza (lubiprostone) ~~marketed by Sucampo and Takeda. Additionally,~~, Trulance (plecanatide) ~~was~~and Zelnorm (tegaserod maleate).

Additionally, XPHOZAH, if approved ~~by FDA~~for the Hyperphosphatemia Indication will compete with phosphate binders used for the same or similar indication`. If approved, our label for XPHOZAH may include data comparing the effectiveness of tenapanor to phosphate binders used for the same indication. The various types of phosphate binders commercialized in ~~January 2017 for use~~the United States include the following:

All of the phosphate binders listed above are available as generics in ~~adults for treatment~~the U.S., with the exception of ~~chronic idiopathic constipation,~~Velphoro and ~~Synergy Pharmaceuticals,~~Auryxia. In addition to the ~~drug’s manufacturer, presented Phase 3 data from two clinical studies of Trulance in patients withIBS-C~~ ~~in December 2016 and submitted an NDA for this indication in March 2017.~~

~~Finally,~~currently available phosphate binders, we are aware of at least two ~~drugs approaching or on the market for the treatment of hyperkalemia. Veltassa (patiromer FOS)~~other binders in development, including fermagate (Alpharen), an ~~oral, polymer-based potassium~~iron-based binder ~~was approved for marketing~~in Phase 3 being developed by ~~the FDA~~Opko Health, Inc., and PT20, an iron-based binder in ~~October 2015 and was commercially launched~~Phase 3 being developed by ~~Relypsa, a company that was acquired by Galenica in September 2016. Additionally, ZS Pharma submitted an NDA to the FDA in June 2015 forZS-9,~~ ~~a sodium zirconium cyclosilicate-based oral potassium binder and received approval in Europe in February 2017 by the European Medicines Agency. If approved in the United States,ZS-9~~ ~~will be commercially launched by AstraZeneca, a company that acquired ZS Pharma in December 2015.~~

Shield Therapeutics.

It is possible that our ~~competitors will develop and market~~competitors' drugs ~~or other treatments that are~~may be less expensive and more effective than our product candidates, or that will 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 anticipate that we will 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.

While we have continued to work to optimize our Board of Directors approved a restructuring plan, pursuant to which we reduced our workforce by 29%, resulting in 75 remaining employees. We will need to manage our operations and clinical trials, and continue our development and~~pre-commercial~~ ~~activities for our product candidates with this reduced workforce. Our~~ management ~~and~~composition, personnel and systems ~~currently in place may not be adequate~~ to support our current activities orfor future ~~growth.~~growth, these resources may not be adequate for this purpose. Our need to effectively execute our business strategy requires that we:

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

We currently have no sales organization. If we are unable to establish sales capabilities on our own or through third parties, we may not be able to commercialize tenapanor or any of our other product candidates.

~~We currently do not have a sales organization. In order to commercialize orco-promote~~ tenapanor, RDX7675 or any of our other product candidates, either alone, or with a collaboration partner, we must enter collaborative relationships with one or more third parties; or build marketing, sales, distribution, managerial and other~~non-technical~~ capabilities. There can be no assurances that we will be successful in establishing collaborative relationships in a timely manner or on terms that are acceptable to us. If one or more of our product candidates receives regulatory approval, and we have not entered collaborative relationships for the commercialization of such product candidate in the approved territory, we would have to establish appropriate sales organizations with technical expertise supporting distribution capabilities to commercialize the product candidate, which will be expensive and time consuming. As a company, we have no prior experience in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to secure the capital necessary to fund such efforts on acceptable terms, hire, retain, and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, comply with regulatory requirements applicable to the marketing and sale of drug products and effectively manage a geographically dispersed sales and marketing team.

If we are unable to enter collaborative relationships a timely manner, or on acceptable terms, and/or we fail or are delayed in the development of our internal sales, marketing and distribution capabilities, the commercialization of our products would be adversely impacted, and we may not be able to successfully commercialize our product candidates.

We rely completely on third parties to manufacture our nonclinical and clinical drug supplies, and we intend to rely on third parties to produce commercial supplies of any approved product candidate. Our business would be harmed if those third parties fail to obtain approval of the FDA, Competent Authorities of the Member States of the EEA or comparable regulatory authorities, fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices.

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture our drug supplies for use in the conduct of our nonclinical and clinical studies, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale. The facilities used by our contract manufacturers to manufacture any drug products must be approved by the FDA pursuant to inspections that will be conducted after an NDA is submitted to the FDA. We do not control the manufacturing process of our product candidates, and we are completely dependent on our contract manufacturing partners for compliance with the regulatory requirements, known as cGMPs, for manufacture of both active drug substances and finished drug products.

If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.

We rely on our manufacturers to purchase from third-party suppliers the materials necessary to produce our product candidates for our clinical studies. There are a limited number of suppliers for raw materials that we use to manufacture our drugs, and there may be a need to identify alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our product candidates for our clinical studies, and, if approved, ultimately for commercial sale. We do not have any control over the process or timing of the acquisition of these raw materials by our manufacturers. Although we generally do not begin a clinical study unless we believe we have on hand, or will be able to manufacture, a sufficient supply of a product candidate to complete such study, any significant delay or discontinuity in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical study due to the need to replace a third-party manufacturer could considerably delay completion of our clinical studies, product testing, and potential regulatory approval of our product candidates, which could harm our business and results of operations.

Third-party payor coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our products, if approved, could limit our ability to market those products and decrease our ability to generate revenue.

The pricing, coverage and reimbursement of our product candidates, if approved, 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 such as ours, assuming approval. Sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates 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 may not be able to successfully commercialize our product candidates. 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.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the principal decisions about coverage and reimbursement for new drugs are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S.

Department of Health and Human Services responsible for administering the Medicare program, as 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. It is difficult to predict what CMS will decide with respect to reimbursement for products such as ours.

In July 2010, CMS released its final rule to implement a bundled prospective payment system for the treatment of ESRD patients as required by the Medicare Improvements for Patients and Providers Act, or MIPPA. The bundled payment covers a bundle of 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. The final rule delayed the inclusion of oral medications without intravenous equivalents in the bundled payment until January 1, 2014 and in April 2014, President Obama signed the Protecting Access to Medicare Act of 2014, which further extended this implementation date to January 1, 2024. Additionally, section 204 of the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014, or ABLE, provides that payment for oral-only ESRD drugs cannot be made under the ESRD Prospective Payment System prior to January 1, 2025. As a result of the recent legislation, beginning in 2025, ESRD-related drugs may be included in the bundle and separate Medicare reimbursement will no longer be available for such drugs, as it is today under Medicare Part D. While it is too early to project the full impact bundling may have on the industry, the impact could potentially cause dramatic price reductions for tenapanor and RDX7675, if approved. We may be unable to sell tenapanor and/or RDX7675, if approved, to dialysis providers on a profitable basis if third-party payors reduce their current levels of payment, or if our costs of production increase faster than increases in reimbursement levels.

Outside the United States, 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 our product candidates. 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. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products approved 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 any of our product candidates 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 face an inherent risk of product liability as a result of the clinical testing of our product candidates and ~~will face an even greater risk if we commercialize any products.~~our commercial launch of IBSRELA. For example, we may be sued if any product we develop 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:

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. ~~We currently carry product liability insurance covering use in our clinical trials in the amount of $10.0 million in the aggregate.~~ Although we maintain ~~such~~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.~~

losses

Recruiting and retaining qualified scientific, clinical, medical, manufacturing, and sales and marketing 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 President and Chief Executive Officer, Michael Raab, our Chief Operating Officer, Reginald Seeto, MBBS, our Chief Scientific Officer, Jeremy Caldwell, Ph.D., and our Chief Development Officer, David Rosenbaum, Ph.D. If we are not able to retain these membersexecutives, senior management or other key employee could impede the achievement of our ~~management team, or recruit additional management, clinical~~development and ~~scientific personnel,~~commercial objectives and seriously harm our ability to successfully implement our business ~~will suffer.~~

Our success depends in part on our continued ability to attract, retain and motivate highly qualified personnel. In particular, we are highly dependent upon Michael Raab, our President and Chief Executive Officer, Reginald Seeto, MBBS, our Chief Operating Officer, Jeremy Caldwell, Ph.D., our Chief Scientific Officer and David Rosenbaum, Ph.D., our Chief Development Officer. The loss of services of any of these individuals could delay or impair the successful development of our product pipeline, completion of our planned clinical trials or the commercialization of our product candidates. Although we have entered into employment agreements with ourstrategy. Furthermore, replacing executives, senior management ~~team, including Mr. Raab~~ and ~~Drs. Seeto, Caldwell~~other key employees may be difficult and ~~Rosenbaum, these agreements are terminable at will with or without notice and, therefore, we~~ may not be able to retain their services as expected. Although we have not historically experienced unique difficulties attracting and retaining qualified employees, we could experience such problems in the future. For example, competition for qualified personnel in the biotechnology and pharmaceuticals field is intense due totake an extended period of time because of the limited number of individuals ~~who possess~~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.

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 ~~industry.~~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 ~~addition~~the U.S., HIPAA imposes, among other things, certain standards relating to the ~~competition~~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 ~~personnel,~~us and our future customers and strategic partners. For example, the ~~San Francisco Bay area~~California Consumer Privacy Act ("CCPA") went into effect on January 1, 2020. The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Further, the California Privacy Rights Act (CPRA) recently passed in ~~particular is characterized~~California.

Furthermore, the Federal Trade Commission (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. For example, 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 Federal Trade Commission Act. The FTC expects a ~~high~~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 ~~living. As~~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, the European Union General Data Protection Regulation (GDPR) went into effect in May 2018 and imposes strict requirements for processing the personal data of individuals within the European Economic Area (EEA). 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 United States; in July 2020, the Court of Justice of the EU (CJEU) limited how organizations could lawfully transfer personal data from the EU/EEA to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses. 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 or 4% of the annual global revenues of the noncompliant company, whichever is greater. Relatedly, following the United Kingdom’s withdrawal from the European Economic Area and the European Union, and the expiry of the transition period, companies have 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. The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, for example around how data can lawfully be transferred between each jurisdiction, which may expose us to further compliance risk.

Although we ~~could have difficulty attracting experienced personnel~~work to comply with applicable laws, regulations and standards, our ~~company~~contractual obligations and other legal obligations, these requirements are evolving and may be ~~required~~modified, interpreted and applied in an inconsistent manner from one jurisdiction to ~~expend significant financial resources in our employee recruitment~~another, and ~~retention efforts.~~

~~Our internal computer systems, or those of our CROs~~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 ~~external communications. Despite the implementation of security measures, the size and complexity of~~ our ~~internal computer systems, and those of our~~collaborators, CROs, and other contractors ~~make them~~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 and personal 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 digital 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 internal information technology systems and infrastructure, and those of

The risk of a security breach or disruption or data loss, particularly through cyber-attacks 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. As a result of the COVID-19 pandemic, 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. 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. We and certain of our service providers are from time to time subject to cyberattacks and security incidents. While we do not believe that we have ~~not~~ experienced any ~~such~~significant system failure, accident or security breach to ~~date, if~~date. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our ~~programs.~~product development programs, and/or of our efforts to commercialize tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis or for another other related indication, if approved. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials ~~for any of our product candidates~~ could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. 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 ~~are potentially vulnerable to data security breaches, whether by employees~~ or ~~others, which may expose sensitive data to unauthorized persons. Such data security breaches could lead to the loss~~those of ~~trade secrets~~our collaborators, CROs or other ~~intellectual property,~~contractors, or results in the unauthorized release of personally identifiable information, our reputation could ~~lead~~be materially damaged. We would also be exposed to ~~the public exposure~~a risk of ~~personal information~~loss or litigation and potential liability, which could materially adversely affect our business, results of operations and financial condition.

In 2019, management and our management will 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, or the 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, or Section 404, and the related rules of the Securities and Exchange Commission, or SEC, which generally require our management and~~ independent registered public accounting firm ~~to report on the effectiveness of~~identified a control deficiency that constituted a material weakness in our internal control over financial reporting. ~~Section 404 requires an annual management assessment~~The material weakness was due to a failure in the design and implementation of controls over the evaluation of the ~~effectiveness~~terms of our ~~internal control over~~clinical trial contracts for inclusion into our clinical financial ~~reporting. However, for so long as~~model which estimates clinical trial expenses. Specifically, we ~~remain~~had failed to properly interpret an ~~emerging growth company as defined~~expense in our clinical trial contracts which resulted in the ~~Jumpstart Our Business Startups Act~~over accrual of ~~2012, or JOBS Act, we intend~~our clinical trial expenses during 2018 and the first quarter of 2019.

We developed and implemented a remediation plan for this material weakness which included modifications to ~~take advantage~~the design and implementation of certain ~~exemptions from various reporting requirements that are applicable to public companies that are emerging growth companies, including, but not limited to, not being required to comply with~~internal controls, and the ~~auditor attestation requirements~~material weakness was remediated as of ~~Section 404. Once~~December 31, 2019. Although we ~~are no longer an emerging growth company or, if prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from~~have remediated this material weakness, as attested by our independent registered public accounting firm, onwe can give no assurance that an additional material weakness or significant deficiency in our internal controls over financial reporting will not be identified in the future. 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. We will remain an emerging growth company until~~reporting, investor confidence in the ~~earlier of (1) the last day of the fiscal year following the fifth anniversary of the completion~~reliability of our ~~IPO (December 31, 2019), (2) the last day of the fiscal year in~~financial reports may be adversely affected, which we have total annual gross revenue of at least $1.0 billion, (3) the last day of the fiscal year in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by~~non-affiliates~~ ~~exceeds $700 million as of the prior June 30~~^th~~, and (4) the date on which we have issued more than $1.0 billion innon-convertible~~ ~~debt during the prior three-year period.~~

~~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~~could have a material ~~weakness in our internal controls over financial reporting, we may not detect errors~~adverse effect 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~~common stock.

We ~~currently expect to~~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 United States and abroad that we believe will complement or augment our existing business. In particular, we ~~currently expect to form one or more~~have formed collaboration partnerships ~~in connection~~ with ~~the~~KKC for commercialization of tenapanor ~~if approved.~~for hyperphosphatemia in Japan; with

Outbreaks of epidemic, pandemic, or contagious diseases, such as the current novel coronavirus (“COVID-19”) pandemic or, historically, the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome or the H1N1 virus, could disrupt our business. Business disruptions could include disruptions or restrictions on our ability to conduct our clinical trials, as planned, travel, as well as temporary closures of the facilities of our collaboration partners, suppliers or contract manufacturers. Any disruption of our clinical trial operations, collaboration partners, suppliers or contract manufacturers could adversely impact our operating results.

Economic and health conditions related to the COVID-19 pandemic in the United States and across most of the globe remain uncertain and continue to evolve. The continuing effects of the coronavirus outbreak may result in delays in the manufacture of tenapanor, or in the delivery of key intermediates or raw materials required to manufacture tenapanor or delays in clinical development activities by us, or our collaboration partners. Such effects could also materially and negatively impact our ability to successfully commercialize IBSRELA, and/or, if approved, XPHOZAH, or the ability of our collaboration partners to successfully commercialize such products, if approved for marketing and sale by the foreign regulatory authorities, including our ability, and that of our collaboration partners to educate physicians and patients about the benefits, administration and use of the product.

The full effects of the COVID-19 remain unknown. The extent to which the outbreak may continue to impact our business, including, our commercialization and manufacturing will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as access to physician offices for our commercial and medical teams, business closures or business disruptions.

We may consider strategic transactions, such as acquisitions of companies, asset purchases, ~~and~~ and/orin-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, our continued efforts to seek approval for our NDA for tenapanor for the Hyperphosphatemia Indication and/or the development of RDX013 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

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.

We or our collaboration partners may decide to seek marketing approval for certain of our product candidates outside the United States or otherwise engage in business outside the United States, including entering into contractual agreements with third-parties. We ~~expect that we will be~~currently utilize contract manufacturing organizations located outside of the United States to manufacture our active drug substance for tenapanor. We are subject to additional risks related to entering these international business markets and relationships, including:

Our ~~research and~~ development activities involve the controlled storage, use and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds. 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 these hazardous materials. 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, ~~research~~ and development efforts and business operations, environmental damage resulting in costlyclean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. We cannot guarantee ~~that~~ 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 may be adversely affected by the current 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 United States, 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. The recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. We cannot anticipate all the ways in which the current global economic climate and global financial market conditions could adversely impact our business.

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, the 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 United States result in widespread and prolonged unemployment, either regionally or on a national basis, prior to the effectiveness or after the repeal of certain provisions of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively known as the Affordable Care Act, 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.

We currently occupy a leased facility located in the San Francisco Bay Area, which in the past has experienced severe earthquakes. We do not carry earthquake insurance. Earthquakes or other natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial condition and prospects.

If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our ~~headquarters,~~California facility, that damaged critical infrastructure, such as our enterprise financial systems or manufacturing resource planning and enterprise quality systems, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.

Even if a drug is approved by the FDA or foreign regulatory authorities, the manufacturing processes, labeling, packaging, distribution, ~~adverse event reporting,~~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 conductpost-approval. As such, we and our ~~third party~~third-party contract manufacturers 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.

We 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.

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:

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 ~~our product candidates.~~IBSRELA and, if approved, 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 FDA’s policies may change, and additional government regulations may be ~~enacted that could prevent, limit or delay regulatory approval of our product candidates.~~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 United States or abroad.

The ability of the 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, and policy changes. Average review times at the agency have fluctuated in recent years as a result.

Disruptions at the 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. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Separately, in response to the global COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most foreign inspections of manufacturing facilities and products through April 2020, and subsequently, on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities. Additionally, on April 15, 2021, the FDA issued a guidance document in which the FDA described its plans to conduct voluntary remote interactive evaluations of certain drug manufacturing facilities and clinical research sites, among other facilities. According to the guidance, the FDA may request such remote interactive evaluations where the FDA determines that remote evaluation would be appropriate based on mission needs and travel limitations. In May 2021, the FDA outlined a detailed plan to move toward a more consistent state of inspectional operations, and in July 2021, the FDA resumed standard inspectional operations of domestic facilities. More recently, the FDA has continued to monitor and implement changes to its inspectional activities to ensure the safety of its employees and those of the firms it regulates as it adapts to the evolving COVID-19 pandemic. Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could

All entities involved in the preparation of product for commercial sale, or product candidates for clinical ~~studies or commercial sale,~~trials, including our existing contract manufacturers ~~for our product candidates~~ 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 product candidates that may not be detectable in final product testing. We or our contract manufacturers 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 FDA and other regulatory agencies through their facilities inspection programs. The facilities and quality systems of some or all of our third-party contractors must pass apre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the ~~preparation~~manufacture of our product ~~candidates or our other potential products~~ or the associated quality systems for compliance with the regulations applicable to the activities being conducted. Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the regulatory requirements. If these facilities do not pass apre-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 control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.

The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our third-party contractors. 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 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 is likely to result in a delay 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.

The regulations relating to the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA and other government agencies. ~~If tenapanor, RDX7675~~ With respect to the commercialization of IBSRELA and/or, ~~our other product candidates receive marketing approval,~~if approved, XPHOZAH, we ~~and our collaborating partners, if any,~~ will be restricted from marketing the product outside of its approved labeling, also referred to asoff-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 anoff-label use. ~~We intend to implement~~In preparation for the commercial launch of IBSRELA, we have

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 and other sales practices, 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 Federal Trade Commission 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 ~~Food, Drug and Cosmetic Act,~~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 prohibitions relating to the promotion of products for unapproved uses, 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.

If

Some participants in clinical studies of tenapanor have reported adverse effects after being treated with tenapanor, including diarrhea, ~~nausea,~~abdominal distension, flatulence ~~abdominal discomfort, abdominal pain, abdominal distention~~ and ~~changes in electrolytes.~~dizziness. If we are successful in commercializing any products, FDA and foreign regulatory agency regulations require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse events. The timing of our obligation to report would be 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 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.

We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, collaboration partners, consultants 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: (1)~~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; ~~(2)~~ manufacturing standards; ~~(3)~~or federal and state healthcare fraud and abuse laws and ~~regulations; or (4) laws that require the reporting of true and accurate financial information and data.~~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

In order to market any product in the EEA (which is composed of the 2827 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 ~~or MA.~~(“MA”). Before ~~granting~~ the MA is granted, the EMA or the competent authorities of the Member States of the EEA make an assessment of the ~~risk–benefit~~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 FDA approval. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the 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 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 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.

Following our commercial introduction of IBSRELA, and the regulatory approval by a foreign government and the commercial introduction of any ~~products on the market, once we begin commercializing~~either IBSRELA or XPHOZAH by our ~~products,~~collaboration partner in such jurisdiction, we and our collaboration partners ~~if any,~~ may be 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:

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. Further, the Affordable Care Act, among other things, amends the intent requirement of the federal anti-kickback and criminal health care fraud statutes. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the Affordable Care Act provides that 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 statutes. 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.

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, FDA regulations and guidance are often revised or reinterpreted by the 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:

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.

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 United States, the ~~Affordable Care Act~~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 ~~Affordable Care Act,~~ACA, among other things, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program 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, in which manufacturers must now agree to offer ~~50%~~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.

~~We currently expect~~

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 ~~federal~~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. Further, prior to the U.S. Supreme Court ruling, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace from February 15, 2021 through

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. These new laws, among other things, included aggregate reductions of Medicare payments of 2% per fiscal year to providers that will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 and ~~foreign governments will continue~~a 1% reduction from April 1, 2022 through June 30, 2022, unless additional action is taken by Congress, additional specific reductions in Medicare payments to ~~consider changes~~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 ~~existing healthcare~~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 eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, beginning January 1, 2024. 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. By way of example, the Build Back Better Act, if enacted, would introduce substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S. Department of Health and Human Services that would require manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, and the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D. If the Build Back Better Act is not enacted, similar or other drug pricing proposals could appear in future legislation. Additionally, individual states have become increasingly active in passing legislation and ~~we currently expect that the new Presidential Administration~~implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and ~~U.S. Congress will seek~~ to ~~modify or repeal all, or certain provisions of, the Affordable Care Act. There is still uncertainty with respect to any regulatory changes,~~encourage importation from other countries and ~~such regulatory changes could have an impact on coverage and reimbursement for healthcare items and services covered by plans that were otherwise authorized by the Affordable Care Act. However, we~~bulk purchasing.

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.

~~Other legislative changes have been proposed~~

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 United States 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.

Our commercial success depends, in part, on our ~~other~~ability to develop, manufacture or commercialize our products and product candidates without infringing, misappropriating or ~~prevent or delay~~otherwise violating the ~~continued use~~intellectual property rights of ~~our drug discovery and development platform, including APECCS.~~

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. There~~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 ~~tenapanor, RDX7675~~IBSRELA or XPHOZAH or of any other product candidates ~~or that the use of our drug discovery and development platform, including APECCS,~~ 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 ~~tenapanor, RDX7675~~IBSRELA or XPHOZAH or other product ~~candidates or by the use of APECCS.~~candidates. Moreover, we may face patent infringement claims fromnon-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 ~~tenapanor, RDX7675~~IBSRELA or XPHOZAH or our other product ~~candidates,~~candidates.

Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or ~~by the use of APECCS.~~

~~We may be subject to third-party patent infringement claims in the future against us or our that would cause us to incur substantial expenses and, if successful against us,~~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 ~~research,~~ development, manufacturing or sales of the product or product candidate that is the subject of the suit. In addition, if a patent infringement suit were brought against us regarding the use of APECCS, we could be forced to stop our use of APECCS or modify our processes to avoid infringement, which may not be possible at a reasonable cost, if at all, and which could result in substantial delay in our use of APECCS for the discovery of new product candidates or potential targets. 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.

We 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.

In addition to infringement claims against us, ifthird parties may also raise similar claims before administrative bodies in the United States or abroad. Such mechanisms include reexamination, post grant review, inter parties review, derivation or opposition proceedings before the United States Patent and Trademark Office (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 United States that also claim technology similar or identical to ours, we may have to participate in interference or derivation proceedings in ~~the United States Patent and Trademark Office, or~~ 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.

The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. The patent applications that we own or license may fail to result in issued patents in the United States 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 successfully issue, third parties may challenge the validity, enforceability or scope thereof, which

may result in such patents being narrowed, invalidated or held unenforceable. For example, U.S. patents can be challenged by any person before the new USPTO Patent Trial and Appeals 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 United States, Europe and other jurisdictions third parties can raise questions of validity with a patent office even before a patent has granted. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our 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 ~~our~~IBSRELA, XPHOZAH, RDX013 or any future product candidates is successfully challenged, then our ability to commercialize such product ~~candidates~~ could be negatively affected, and we may face unexpected competition that could have a material adverse impact on our business. Further, if we ~~encounter delays~~have reported that we have completed the data analysis from our Phase 2 clinical trial evaluating the safety and efficacy of RDX013 for the treatment of hyperkalemia, and that we currently expect that the next steps for the RDX013 program will be to evaluate a new formulation that potentially enhances subject compliance and the efficacy of RDX013 in an additional Phase 2 clinical study. We currently expect to delay further development of RDX013 until such time as we have determined that our available resources support conducting such additional formulation work and an additional

Even where laws provide 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 ~~the~~a product or product candidate, the defendant could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness ornon-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 and unenforceability 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 and/or unenforceability against our intellectual property related to a product or a product candidate, we would lose at least part, and perhaps all, of the patent protection on such product or product candidate. Such a loss of patent protection would have a material adverse impact on our business. Moreover, our competitors could counterclaim that we infringe their intellectual property, and some of our competitors have substantially greater intellectual property portfolios than we do.

We also rely on trade secret protection and confidentiality agreements to protect proprietaryknow-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 proprietaryknow-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 proprietaryknow-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 ~~are~~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, including APECCS, could require us to pursue legal action to protect our trade secrets and confidential information, which would 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 United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States 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.

Following the ~~timing, duration~~approval by the FDA for our NDA to market tenapanor for IBS-C, we became eligible to seek and ~~specifics of FDA marketing approval of our product candidates, if any,~~sought patent term restoration under the Hatch-Waxman Act for one of the U.S. patents covering ~~each of such~~our approved ~~product(s)~~product or the use ~~thereof may be eligible for up to five years of patent term restoration under the Hatch-Waxman Act.~~thereof. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA approved product. Patent term extension also may be available in certain foreign countries upon regulatory approval of our product candidates. ~~Nevertheless,~~Despite seeking patent term extension for tenapanor or other product candidates, we may not be granted patent term extension either in the United States or 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 extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request.

If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially.

~~Changes in U.S. patent law could diminish the value~~

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. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. 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.

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 United States and foreign countries may affect our ability to obtain and enforce adequate intellectual property protection for our technology.

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 andnon-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 orknow-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, includingknow-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 in defending 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.

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:

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.

~~One~~

Based on the number of ~~September 30, 2017, entities affiliated with New Enterprise Associates, or NEA, a venture capital fund associated with one~~shares outstanding as of March 31, 2022, our officers, directors and stockholders who hold at least 5% of our ~~directors, collectively~~stock together beneficially ~~owned~~own approximately ~~29.6%~~9.3% of our outstanding common ~~stock,~~stock. If these officers, directors, and ~~NEA together with our executive officers and directors beneficially owned approximately 34.3%~~principal stockholders or a group of our ~~capital stock, including outstanding restricted stock units that~~principal stockholders act together, they will ~~vest within 60 days of September 30, 2017, and warrants and stock options exercisable for shares of our common stock within 60 days of September 30, 2017. Therefore, these stockholders may~~ be able to ~~determine all~~exert a significant degree of influence over our management and affairs and control matters requiring stockholder approval, ~~and~~including the entities affiliated with New Enterprise Associates alone, will have significant ability to influence decisions through their ownership position. For example, these stockholders may be able to influence or control electionselection of directors, amendments to our organizational documents, orand approval of any merger, sale of assets or other ~~major corporate transaction. This~~business combination transactions. The interests of this concentration of ownership may ~~prevent~~not always coincide with our interests or ~~discourage unsolicited acquisition proposals~~the interests of other stockholders. For instance, officers, directors and principal stockholders, acting together, could cause us to enter into transactions or ~~offers for~~agreements that we would not otherwise consider. Similarly, this concentration of ownership may have the effect of delaying or preventing a change in control of our company otherwise favored by our other stockholders.

If our existing stockholders ~~may feel are in their best interest as one~~sell, or indicate an intention to sell, substantial amounts of our ~~stockholders.~~

common stock in the public market, the trading price of our common stock could decline. As of March 31, 2022, we had approximately 136.3 million shares of common stock outstanding. Of those shares, approximately 9.0 million were held by current directors, executive officers and stockholders owning 5% or more of our outstanding common stock.

As of March 31, 2022, 4.4 million shares of common stock issuable upon vesting of outstanding restricted stock units and approximately 12.9 million shares of common stock issuable upon exercise of outstanding options were eligible for sale in the public market to the extent permitted by the provisions of the applicable vesting schedules, and Rule 144 and Rule 701 under the Securities Act. If these additional shares of common stock are issued and sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could 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 would experience additional dilution and, as a result, our stock price may decline.

~~Sales~~

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 (the “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 ~~number~~amount of ~~shares~~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.

During the ~~public market could cause our stock price to fall.~~

~~If our existing stockholders sell, or indicate an intention to sell, substantial amounts~~course of our ~~common stock~~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 ~~the~~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 ~~market,~~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 ~~common~~ 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 ~~decline. As~~result in sanctions, lawsuits, delisting of ~~September 30, 2017, we had approximately 47.5 million~~our shares ~~of common stock outstanding. Of those shares, approximately 14.4 million were held~~from The Nasdaq Global Market or other adverse consequences that would materially harm our business.

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 ~~affiliates,~~factors beyond our control, such as the rate of unemployment, the number of uninsured persons in the United States, 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. The 2008 global financial crisis caused extreme volatility and disruptions in the capital and credit markets. 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 ~~otherwise be subject~~delay payment of, accounts receivable that are owed to ~~Rule 144 under the Securities Act of 1933, or the Securities Act.~~

As of September 30, 2017, approximately 0.7 million shares of common stock issuable upon vesting of outstanding restricted stock units and approximately 4.0 million shares of common stock issuable upon exercise of outstanding options were eligible for saleus. In addition, volatility in the ~~public market to~~financial markets could cause significant fluctuations in the ~~extent permitted by~~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 United States result in widespread and prolonged unemployment, either regionally or on a national basis, or if certain provisions of the ~~applicable vesting schedules,~~Patient Protection and ~~Rule 144~~ACA, as amended by the Health Care and ~~Rule 701 under~~Education Reconciliation Act, collectively known as the ~~Securities Act. In addition, as~~ACA, are repealed, a substantial number of ~~September 30, 2017, approximately 2.2 million shares of common stock issuable upon exercise of outstanding warrants were eligible for sale in~~people may become uninsured or underinsured. To the ~~public market. If these additional shares of common stock are issued and sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.~~

As of September 30, 2017, the holders of approximately 5.6 million shares of our outstanding common stock are entitled to rights with respect to the registration of their shares under the Securities Act. Registration of these shares under the Securities Act wouldextent economic challenges result in ~~the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates. Any sales~~fewer individuals pursuing or being able to afford our product candidates once commercialized, our business, results of ~~securities by these stockholders~~operations, financial condition and cash flows could ~~have a material adverse effect on the trading price of our common stock.~~

be adversely affected.

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:

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.

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 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 growth. Additionally, the terms of our loan and security agreements could

Following a national referendum and enactment of legislation by the government of the United Kingdom, the United Kingdom formally withdrew from the European Union and ratified a trade and cooperation agreement governing its future relationship with the European Union. The agreement, which is being applied provisionally from January 1, 2021, until it is ratified by the European Parliament and the Council of the European Union, addresses trade, economic arrangements, law enforcement, judicial cooperation and a governance framework including procedures for dispute resolution, among other things. Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the United Kingdom and the European Union as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal.

These developments, or the perception that any related developments could occur, have had and may continue to have a material adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict the ability of key market participants to operate in certain financial markets or restrict our access to capital. Any of these factors could have a material adverse effect on our business, financial condition and results of operations and reduce the price of our common stock.


Delaware			26-1303944
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. ~~EMPLOYER~~ ~~IDENTIFICATION NUMBER)~~ Employer Identification No)


	September 30, 2017			December 31, 2016
	(Unaudited)			(1)
Assets
Current assets:
Cash and cash equivalents	$	59,454		$	74,598
Short-term investments		69,834			126,225
Prepaid expenses and other current assets		4,342			3,169

Total current assets		133,630			203,992
Property and equipment, net		8,622			8,991
Other assets		853			148

Total assets	$	143,105		$	213,131

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,723		$	5,635
Accrued compensation and benefits		2,722			3,161
Accrued and other liabilities		11,282			10,405

Total current liabilities		15,727			19,201
Other long-term liabilities		741			779

Total liabilities		16,468			19,980

Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2017 and December 31, 2016.		—			—
Common stock, $0.0001 par value; 300,000,000 shares authorized; 47,503,970 and 47,309,422 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively.		5			5
Additionalpaid-in capital		414,970			407,092
Accumulated deficit		(288,328	)		(213,875	)
Accumulated other comprehensive loss		(10	)		(71	)

Total stockholders’ equity		126,637			193,151

Total liabilities and stockholders’ equity	$	143,105		$	213,131


	March 31, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	47,077	$	72,428
Short-term investments	42,627		44,261
Accounts receivable	4,394		502
Inventory	3,487		—
Prepaid expenses and other current assets	16,640		16,458
Total current assets	114,225		133,649
Right-of-use assets	11,910		12,752
Property and equipment, net	2,045		2,362

Other assets	1,228		1,150
Total assets	$	129,408	$	149,913
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,030	$	4,277
Accrued compensation and benefits	6,304		5,422
Current portion of long-term debt	26,139		32,264
Current portion of operating lease liability	3,592		3,492

Accrued expenses and other current liabilities	6,778		7,366
Total current liabilities	47,843		52,821
Operating lease liability, net of current portion	8,812		9,748

Deferred revenue, non-current	8,563		4,727
Total liabilities	65,218		67,296
Commitments and contingencies (Note 13)	0		0
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.	—		—
Common stock, $0.0001 par value; 300,000,000 shares authorized; 136,330,360 and 130,182,535 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.	14		13
Additional paid-in capital	805,265		795,540
Accumulated deficit	(741,001)		(712,930)
Accumulated other comprehensive loss	(88)		(6)
Total stockholders’ equity	64,190		82,617
Total liabilities and stockholders’ equity	$	129,408	$	149,913


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Operating expenses:
Research and development	$	15,365		$	24,863		$	58,325		$	67,951
General and administrative		5,860			4,337			17,752			13,469

Total operating expenses		21,225			29,200			76,077			81,420

Loss from operations		(21,225	)		(29,200	)		(76,077	)		(81,420	)
Other income, net		501			169			1,624			307

Loss before provision for income taxes		(20,724	)		(29,031	)		(74,453	)		(81,113	)
Provision for income taxes		—			—			—			—

Net loss	$	(20,724	)	$	(29,031	)	$	(74,453	)	$	(81,113	)

Net loss per common share – basic and diluted	$	(0.44	)	$	(0.65	)	$	(1.57	)	$	(2.15	)

Shares used in computing net loss per share – basic and diluted		47,464,310			44,935,126			47,404,039			37,706,045

Comprehensive Loss:

Net loss	$	(20,724	)	$	(29,031	)	$	(74,453	)	$	(81,113	)
Unrealized gain (loss) onavailable-for-sale securities, net of tax		30			(25	)		61			(25	)

Comprehensive loss	$	(20,694	)	$	(29,056	)	$	(74,392	)	$	(81,138	)


	Three Months Ended March 31, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders' 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	127,100	—		83		—		—		83


Issuance of common stock upon vesting of restricted stock units	113,469	—		—		—		—		—

Issuance of common stock in at the market offering	5,907,256	1		5,920		—		—		5,921
Stock-based compensation	—	—		3,722		—		—		3,722
Unrealized losses on available-for-sale securities	—	—		—		—		(82)		(82)
Net loss	—	—		—		(28,071)		—		(28,071)
Balance as of March 31, 2022	136,330,360	$	14	$	805,265	$	(741,001)	$	(88)	$	64,190

☒
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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


		PAGE
PART I. FINANCIAL INFORMATION

Item 1. ~~Condensed Consolidated~~ Financial Statements:	2	2
Condensed ~~Consolidated~~ Balance Sheets ~~as of September 30, 2017~~ (unaudited) ~~and December 31, 2016~~	2	2
Condensed ~~Consolidated~~ Statements of Operations and Comprehensive Loss ~~for the three and nine months ended September 30, 2017 and 2016~~ (unaudited)	3	3
Condensed ~~Consolidated~~Statements of Changes in Stockholders' Equity (unaudited)	4
Condensed Statements of Cash Flows ~~for the nine months ended September 30, 2017 and 2016~~ (unaudited)	6	4
Notes to Condensed ~~Consolidated~~ Financial Statements (unaudited)	7	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20	12
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30	17
Item 4. Controls and Procedures	31	17

~~PART II. OTHER INFORMATION~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	32	18
Item 1A. Risk Factors	32	18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	69	45
Item 3. Defaults Upon Senior Securities	70	45
Item 4. Mine Safety Disclosures	70	45
Item 5. Other Information	70	45
Item 6. Exhibits	71	46
Signatures	72	47


	Three Months Ended March 31, 2021
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders' Equity
	Shares	Amount
Balance as of December 31, 2020	93,599,975	$	9	$	680,872	$	(554,765)	$	(4)	$	126,112
Issuance of common stock under employee stock purchase plan	102,208	—		478		—		—		478

Issuance of common stock upon exercise of options	10,507	—		20		—		—		20
Issuance of common stock upon vesting of restricted stock units	35,100	—		—		—		—		—
Issuance of common stock in at the market offering	4,940,787	1		34,271						34,272
Stock-based compensation	—	—		3,087		—		—		3,087
Unrealized losses on available-for-sale securities	—	—		—		—		(3)		(3)
Net loss	—	—		—		(33,155)		—		(33,155)
Balance as of March 31, 2021	98,688,577	$	10	$	718,728	$	(587,920)	$	(7)	$	130,811


	Nine Months Ended September 30,
	2017			2016
Operating activities
Net loss	$	(74,453	)	$	(81,113	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		1,965			904
Amortization of deferred financing costs		360			289
Amortization of deferred compensation for services		142			148
Amortization of premium on investment securities		57			(11	)
Stock-based compensation		7,001			3,767
Issuance of common stock for services		202			187
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(2,380	)		719
Accounts payable		(3,182	)		2,678
Accrued compensation and benefits		(439	)		(139	)
Accrued and other liabilities		839			6,785

Net cash used in operating activities		(69,888	)		(65,786	)

Investing activities
Proceeds from maturities of investments		109,923			—
Sales and redemptions of investments		16,857			—
Purchases of investments		(70,384	)		(69,740	)
Purchases of property and equipment		(2,327	)		(2,108	)

Net cash provided by (used in) investing activities		54,069			(71,848	)

Financing activities
Proceeds from issuance of common stock, net of issuance costs		—			190,574
Proceeds from issuance of common stock under stock plans		675			416

Net cash provided by financing activities		675			190,990

Net (decrease) increase in cash and cash equivalents		(15,144	)		53,356
Cash and cash equivalents at beginning of period		74,598			107,004

Cash and cash equivalents at end of period	$	59,454		$	160,360


	September 30, 2017
	Amortized Cost		Gross Unrealized					Fair Value
	Amortized Cost		Gains		Losses			Fair Value
Cash and cash equivalents:
Cash	$	7,254	$	—	$	—		$	7,254
Money market funds		44,155		—		—			44,155
U.S. treasury securities		1,799		—		—			1,799
U.S. government-sponsored agency bonds		1,800		—		—			1,800
Corporate bonds		2,246		—		—			2,246
Commercial paper		2,200		—		—			2,200

Total cash and cash equivalents		59,454		—		—			59,454

Short-term investments
U.S. treasury securities		2,988		—		—			2,988
Corporate bonds		38,247		1		(9	)		38,239
Commercial paper		21,382		1		(3	)		21,380
Asset-backed securities		7,227		1		(1	)		7,227

Total short-term investments		69,844		3		(13	)		69,834

Total cash equivalents and investments	$	129,298	$	3	$	(13	)	$	129,288


	December 31, 2016
	Amortized Cost		Gross Unrealized					Fair Value
	Amortized Cost		Gains		Losses			Fair Value
Cash and cash equivalents:
Cash	$	3,638	$	—	$	—		$	3,638
Money market funds		68,561		—		—			68,561
Commercial paper		2,399		—		—			2,399

Total cash and cash equivalents		74,598		—		—			74,598
Short-term investments
Corporate bonds		58,464		2		(56	)		58,410
Commercial paper		62,946		5		(20	)		62,931
Asset-backed securities		4,886		—		(2	)		4,884

Total short-term investments		126,296		7		(78	)		126,225

Total cash equivalents and investments	$	200,894	$	7	$	(78	)	$	200,823


	March 31, 2022
			Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents:
Cash	$	7,555	$	—	$	—	$	7,555
Money market funds	34,524		—		—		34,524
Commercial paper	4,999		—		(1)		4,998

Total cash and cash equivalents	47,078		—		(1)		47,077
Short-term investments:
Commercial paper	$	28,409	$	—	$	(52)	$	28,357
U.S. government-sponsored agency bonds	10,777		—		(22)		10,755
Corporate bonds	2,521		—		(10)		2,511
Asset-backed securities	1,007		—		(3)		1,004
Total short-term investments	42,714		—		(87)		42,627
Total cash equivalents and investments	$	89,792	$	—	$	(88)	$	89,704


Level 1 –	–	Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by ~~the Company~~us at the reporting date. ~~Examples of assets and liabilities utilizing Level 1 inputs are certain money market funds, U.S. Treasuries and trading securities with quoted prices on active markets.~~

Level 2 –	–	Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ~~Examples of assets and liabilities utilizing Level 2 inputs are corporate bonds, commercial paper, certificates of deposit andover-the-counter~~ ~~derivatives.~~

Level 3 –	–	Valuations based on unobservable inputs infor which there is little or no market data, which require ~~the Company~~us to develop ~~its~~our own assumptions.


	September 30, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	44,155	$	44,155	$	—	$	—
U.S. treasury securities		4,787		4,787		—		—
U.S. government-sponsored agency bonds		1,800		1,800		—		—
Corporate bonds		40,485		—		40,485		—
Commercial paper		23,580		—		23,580		—
Asset-backed securities		7,227		—		7,227		—

Total	$	122,034	$	50,742	$	71,292	$	—


	December 31, 2016
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	68,561	$	68,561	$	—	$	—
Corporate bonds		58,410		—		58,410		—
Commercial paper		65,330		—		65,330		—
Asset-backed securities		4,884		—		4,884		—

Total	$	197,185	$	68,561	$	128,624	$	—


	March 31, 2022
	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	34,524	$	34,524	$	—	$	—
Commercial paper	33,355		—		33,355		—
U.S. government-sponsored agency bonds	10,755		—		10,755		—
Corporate bonds	2,511		—		2,511		—
Asset-backed securities	1,004		—		1,004		—

Total	$	82,149	$	34,524	$	47,625	$	—

Liabilities:
Derivative liability for exit fees	$	1,088	$	—	$	—	$	1,088
Total	$	1,088	$	—	$	—	$	1,088


~~DELAWARE~~


	March 31, 2022
Raw materials	$	460
Work in process	2,507
Finished goods	520
Total	$	3,487


	Discounts and Chargebacks		Rebates		Other Fees, Copay and Returns		Total
Balance as of December 31, 2021	$	—	$	—	$	—	$	—
Activity related to 2022 sales	24		40		90		154

Balance as of March 31, 2022	$	24	$	40	$	90	$	154


Deferred revenue - current	2022		2021
Balance at January 1,	$	—	$	4,177


Decreases due to revenue recognized in the period for which cash has been received	—		(1,454)

Balance at March 31,	$	—	$	2,723


Deferred revenue - non-current	2022		2021
Balance at January 1,	$	4,727	$	—

Increases to amounts invoiced, for which cash has not yet been received	3,829		2,947
Increase due to unbilled prepayments recorded during the period	7		—

Balance at March 31,	$	8,563	$	2,947


Total repayment obligations	$	28,862
Less: Unamortized discount	(1,399)
Less: Unaccreted value of final fee	(1,324)
Long-term debt	26,139
Less: Current portion of long-term debt	(26,139)
Long-term debt, net of current portion	$	—


Facilities	March 31, 2022			December 31, 2021
Right-of-use assets	$	11,910		$	12,752

Current portion of lease liabilities	3,592			3,492
Operating lease liability, net of current portion	8,812			9,748
Total	$	12,404		$	13,240

Weighted-average remaining life (years)	3.2			3.4
Weighted-average discount rate	6.9		%	6.9		%


Remainder of 2022	$	3,234
2023	4,440
2024	4,589
2025	1,321
2026	252

Total undiscounted operating lease payments	13,836
Imputed interest expenses	(1,432)
Total operating lease liabilities	12,404
Less: Current portion of operating lease liability	(3,592)
Operating lease liability, net of current portion	$	8,812


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Research and development	$	916	$	685	$	3,361	$	1,992
General and administrative		1,186		606		3,640		1,775

Total	$	2,102	$	1,291	$	7,001	$	3,767


	Unrecognized Compensation Expense		Average Remaining Vesting Period (Years)
Stock option grants	$	14,865	3.0
RSU grants	$	4,894	1.3
ESPP	$	53	0.8


	Number of Shares	Weighted-Average Exercise Price per Share
Balance at December 31, 2021	10,417	$	7.00
Options granted	3,535	$	0.98
Options exercised	—	$	—
Options forfeited or canceled	(1,006)	$	7.18
Balance at March 31, 2022	12,946	$	5.34
Exercisable at March 31, 2022	6,476	$	7.16


	Number of RSUs	Weighted-Average Grant Date Fair Value Per Share
Non-vested restricted stock units at December 31, 2021	3,529	$	2.04
Granted	1,120	$	0.98
Vested	(113)	$	3.62
Forfeited	(88)	$	2.02
Non-vested restricted stock units at March 31, 2022	4,448	$	1.73


	September 30,		December 31,
	2017		2016
Accrued clinical andnon-clinical expenses	$	6,926	$	6,694
Accrued contract manufacturing		2,895		2,705
Accrued professional and consulting services		761		322
Other		700		684

	$	11,282	$	10,405


	Three Months Ended March 31,
Numerator:	2022		2021
Net loss	$	(28,071)	$	(33,155)
Denominator:
Weighted average common shares outstanding - basic and diluted	130,935		97,179
Net loss per share - basic and diluted	$	(0.21)	$	(0.34)


	September 30, 2017		December 31, 2016
Cash and cash equivalents	$	59,454	$	74,598
Short-term investments		69,834		126,225

Total liquid funds	$	129,288	$	200,823