Reata Pharmaceuticals (RETA) 10-Q 10 May 22 2022 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 04, 2022
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Trading Symbol	RETA
Entity Registrant Name	Reata Pharmaceuticals, Inc.
Entity Central Index Key	0001358762
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity File Number	001-37785
Entity Tax Identification Number	11-3651945
Entity Address, Address Line One	5320 Legacy Drive
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address Postal Zip Code	75024
City Area Code	972
Local Phone Number	865-2219
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Class A Common Stock, Par Value $0.001 Per Share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Common Stock A
Document Information [Line Items]
Entity Common Stock Shares Outstanding		31,543,735
Common Stock B
Document Information [Line Items]
Entity Common Stock Shares Outstanding		4,919,249

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets
Cash and cash equivalents	$ 531,979	$ 590,258
Prepaid expenses and other current assets	5,357	6,217
Total current assets	537,336	596,475
Property and equipment, net	11,202	11,604
Operating lease right-of-use-assets	131,178	126,777
Other assets	152	160
Total assets	679,868	735,016
Liabilities and stockholders’ equity
Accounts payable	9,015	13,505
Accrued direct research liabilities	14,930	14,249
Other current liabilities	13,778	21,450
Operating lease liabilities, current	5,142	3,142
Deferred revenue	755	1,648
Total current liabilities	43,620	53,994
Other long-term liabilities	5	0
Opearting lease liabilities, noncurrent	136,445	132,891
Liability related to sale of future royalties, net	372,013	362,142
Total noncurrent liabilities	508,463	495,033
Commitments and contingencies
Stockholders’ equity:
Additional paid-in capital	1,457,222	1,441,584
Accumulated deficit	(1,329,473)	(1,255,631)
Total stockholders’ equity	127,785	185,989
Total liabilities and stockholders’ equity	679,868	735,016
Common Stock A
Stockholders’ equity:
Common stock value	31	31
Common Stock B
Stockholders’ equity:
Common stock value	$ 5	$ 5

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Common Stock A
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	31,525,514	31,525,514
Common stock, shares outstanding	31,478,197	31,478,197
Common Stock B
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	4,919,249	4,919,249
Common stock, shares outstanding	4,919,249	4,919,249

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Collaboration revenue
Collaboration revenue	$ 914	$ 944
Expenses
Research and development	39,804	34,880
General and administrative	24,841	20,704
Depreciation	308	274
Total expenses	64,953	55,858
Other income (expense), net	(9,772)	(12,556)
Loss before taxes on income	(73,811)	(67,470)
Benefit from (provision for) taxes on income	(31)	15
Net loss	$ (73,842)	$ (67,455)
Net loss per share—basic and diluted	$ (2.03)	$ (1.86)
Weighted-average number of common shares used in net loss per share basic and diluted	36,412,621	36,203,631
License and milestone
Collaboration revenue
Collaboration revenue	$ 893	$ 795
Other revenue
Collaboration revenue
Collaboration revenue	$ 21	$ 149

Unaudited Consolidated Statem_2

Unaudited Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock A	Common Stock B	Common StockCommon Stock A	Common StockCommon Stock B	Additional Paid-In Capital	Total Accumulated Deficit
Balance, value at Dec. 31, 2020	$ 417,431			$ 31	$ 5	$ 1,375,640	$ (958,245)
Balance, shares at Dec. 31, 2020				31,109,154	5,044,931
Net loss	(67,455)						(67,455)
Compensation expense related to stock options	14,679					14,679
Exercise of options, value	4,678					4,678
Exercise of options, shares					112,423
Issuance of common stock upon vesting of restricted stock units, shares					3,302
Conversion of common stock Class B to Class A, shares				251,102	(251,102)
Balance, value at Mar. 31, 2021	369,333			$ 31	$ 5	1,394,997	(1,025,700)
Balance, shares at Mar. 31, 2021				31,360,256	4,909,554
Balance, value at Dec. 31, 2021	185,989			$ 31	$ 5	1,441,584	(1,255,631)
Balance, shares at Dec. 31, 2021		31,478,197	4,919,249	31,478,197	4,919,249
Net loss	(73,842)						(73,842)
Compensation expense related to stock options	15,444					15,444
Exercise of options, value	$ 194					194
Exercise of options, shares	9,375				9,375
Issuance of common stock upon vesting of restricted stock units, shares				35,107	2,835
Conversion of common stock Class B to Class A, shares				12,210	(12,210)
Balance, value at Mar. 31, 2022	$ 127,785			$ 31	$ 5	$ 1,457,222	$ (1,329,473)
Balance, shares at Mar. 31, 2022		31,478,197	4,919,249	31,525,514	4,919,249

Unaudited Consolidated Statem_3

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Operating activities
Net loss	$ (73,842)	$ (67,455)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	308	274
Amortization of debt issuance costs and imputed interest	0	1,714
Non-cash interest expense on liability related to sale of future royalty	9,871	10,925
Stock-based compensation expense	15,444	14,679
Changes in operating assets and liabilities:
Income tax receivable and payable	0	(22)
Prepaid expenses, other current assets and other assets	877	1,330
Accounts payable	(4,525)	3,629
Accrued direct research, other current and long-term liabilities	(8,914)	(9,301)
Operating lease obligations	3,489	11
Deferred revenue	(893)	(795)
Net cash used in operating activities	(58,185)	(45,011)
Investing activities
Purchases of property and equipment	(288)	(193)
Net cash used in investing activities	(288)	(193)
Financing activities
Exercise of options	194	4,678
Net cash provided by financing activities	194	4,678
Net decrease in cash and cash equivalents	(58,279)	(40,526)
Cash and cash equivalents at beginning of year	590,258	818,150
Cash and cash equivalents at end of period	531,979	777,624
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	4,885	0
Purchases of equipment in accounts payable, accrued direct research, other current, and long-term liabilities	2,258	28
Acquisition of property and equipment through tenant improvement allowance	$ 0	$ 2,495

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Description of Business	1. Description of Business Reata Pharmaceuticals, Inc.’s (Reata, the Company, we, us, or our) mission is to identify, develop, and commercialize innovative therapies that change patients’ lives for the better. The Company focuses on small-molecule therapeutics with novel mechanisms of action for the treatment of severe, life-threatening diseases with few or no approved therapies. The Company’s lead programs are omaveloxolone in a rare neurological disease called Friedreich’s ataxia (FA) and bardoxolone methyl (bardoxolone) in rare forms of chronic kidney disease (CKD). Both of the Company’s lead product candidates activate the transcription factor Nrf2 to normalize mitochondrial function, restore redox balance, and resolve inflammation. Because mitochondrial dysfunction, oxidative stress, and inflammation are features of many diseases, the Company believes omaveloxolone, bardoxolone, and our next-generation Nrf2 activators have many potential clinical applications. Reata possesses exclusive, worldwide rights to develop, manufacture, and commercialize omaveloxolone, bardoxolone, and our next-generation Nrf2 activators, excluding certain Asian markets for bardoxolone in certain indications, which are licensed to Kyowa Kirin Co., Ltd. (Kyowa Kirin). In addition, we are developing RTA 901, the lead product candidate from our Hsp90 modulator program, in neurological indications. We are the exclusive licensee of RTA 901 and have worldwide commercial rights. The Company’s consolidated financial statements include the accounts of all majority-owned subsidiaries. Accordingly, the Company’s share of net earnings and losses from these subsidiaries is included in the consolidated statements of operations. Intercompany profits, transactions, and balances have been eliminated in consolidation . Prior period reclassifications Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation. Specifically, Operating lease obligations have been reclassed out of Accrued direct research, other current and long-term liabilities in prior periods to conform with the current period presentation on the consolidated statements of cash flows.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the annual consolidated financial statements and footnotes thereto of the Company. Summary of Significant Accounting Policies The significant accounting policies used in the preparation of these condensed consolidated financial statements for the three months ended March 31, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Collaboration Agreements

Collaboration Agreements	3 Months Ended
	Mar. 31, 2022
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Collaboration Agreements	3. Collaboration Agreements Subsequent to the 2019 reacquisition of certain rights originally licensed to AbbVie Inc. (AbbVie) (see AbbVie below) , the Company’s collaboration revenue and deferred revenue have been generated primarily from licensing fees and reimbursements for expenses received under our exclusive license with Kyowa Kirin (the Kyowa Kirin Agreement). Kyowa Kirin In December 2009, the Company entered into an exclusive license with Kyowa Kirin to develop and commercialize bardoxolone in the licensed territory. The terms of the agreement include payment to the Company of a nonrefundable, up-front license fee of $ 35.0 million and additional development and commercial milestone payments. As of March 31, 2022, the Company has received $ 50.0 million related to regulatory development milestone payments from Kyowa Kirin and has the potential in the future to achieve another $ 47.0 million from regulatory milestones and $ 140.0 million from commercial milestones. The Company also has the potential to achieve tiered royalties ranging from the low teens to the low 20 percent range, depending on the country of sale and the amount of annual net sales, on net sales by Kyowa Kirin in the licensed territory. The Company is participating on a joint steering committee with Kyowa Kirin to oversee the development and commercialization activities related to bardoxolone. Any future milestones and royalties received are subject to mid to lower single digit percent declining tiered commissions to certain consultants as compensation for negotiations of the Kyowa Kirin Agreement. The up-front payment and regulatory milestones are accounted for as a single unit of accounting. The Company regularly evaluates its remaining performance obligation under the Kyowa Kirin Agreement. Accordingly, revenue may fluctuate from period to period due to changes to its estimated performance obligation period and variable considerations. The Company began recognizing revenue related to the up-front payment upon execution of the Kyowa Kirin Agreement. In March 2021, the Company’s performance obligation period under the Kyowa Kirin Agreement was extended to June 2022 , which decreased quarterly revenue recognition by approximately $ 0.4 million prospectively. On July 27, 2021, Kyowa Kirin submitted a New Drug Application (NDA) in Japan to the Ministry of Health, Labour and Welfare for bardoxolone for improvement of renal function in patients with Alport syndrome. Based on this submission, the Company earned a $ 5.0 million milestone payment, variable consideration previously considered constrained, under the Kyowa Kirin Agreement. As a result, the Company recorded $ 4.7 million in collaboration revenue, a cumulative catch-up for the portion of this milestone that was satisfied in prior periods, and $ 0.3 million in deferred revenue that will be recognized over the remaining performance obligation period, ending in June 2022 . AbbVie In September 2010, the Company entered into a license agreement with AbbVie (the AbbVie License Agreement) for an exclusive license to develop and commercialize bardoxolone in the Licensee Territory (as defined in the AbbVie License Agreement). In December 2011, the Company entered into a collaboration agreement with AbbVie (the Collaboration Agreement) to jointly research, develop, and commercialize the Company’s portfolio of second and later generation oral Nrf2 activators. In October 2019, the Company and AbbVie entered into an Amended and Restated License Agreement (the Reacquisition Agreement) pursuant to which the Company reacquired the development, manufacturing, and commercialization rights concerning its proprietary Nrf2 activator product platform originally licensed to AbbVie in the AbbVie License Agreement and the Collaboration Agreement . In exchange for such rights, the Company agreed to pay AbbVie $ 330.0 million, all of which has subsequently been paid. Additionally, the Company will pay AbbVie an escalating, low single-digit royalty on worldwide net sales, on a product-by-product basis, of omaveloxolone and certain next-generation Nrf2 activators. The execution of the Reacquisition Agreement ended our performance obligations under the Collaboration Agreement. The Company recognized interest expense related to the Reacquisition Agreement of approximately $ 1.7 million, during the three months ended March 31, 2021. As of March 31, 2022, the Company has fully satisfied its payable to AbbVie, therefore no interest expense was recognized for the three months ended March 31, 2022 .

Liability Related to Sale of Fu

Liability Related to Sale of Future Royalties	3 Months Ended
	Mar. 31, 2022
Liability Related To Sale Of Future Royalties [Abstract]
Liability Related to Sale of Future Royalties	4. Liability Related to Sale of Future Royalties On June 24, 2020, the Company closed on the Development and Commercialization Funding Agreement with an affiliate of Blackstone Life Sciences, LLC (BXLS), which provides funding for the development and commercialization of bardoxolone for the treatment of CKD caused by Alport syndrome, autosomal dominant polycystic kidney disease (ADPKD), and certain other rare CKD indications in return for future royalties (the Development Agreement). The Development Agreement includes a $ 300.0 million payment by an affiliate of BXLS in return for various percentage royalty payments on worldwide net sales of bardoxolone, once approved in the United States or certain specified European countries, by Reata and its licensees, other than Kyowa Kirin. The royalty percentage will initially be in the mid-single digits and, in future years, can vary between higher-mid single digit percentages to low-single digit percentages depending on various milestones, including indication approval dates, cumulative royalty payments, and cumulative net sales. Pursuant to the Development Agreement, we have granted BXLS a security interest in substantially all of our assets. After a bardoxolone product approval has been obtained by the Company, the Company is obligated to make certain minimum cumulative payment amounts in 2025 through 2033, but only until BXLS has achieved certain internal rate of return target. In addition, concurrent with the Development Agreement, the Company entered into a common stock purchase agreement (the Purchase Agreement) with affiliates of BXLS to sell an aggregate of 340,793 shares of the Company’s Class A common stock at $ 146.72 per share for a total of $ 50.0 million. The Company concluded that there were two units of accounting for the consideration received, comprised of the liability related to the sale of future royalties and the common shares. The Company allocated the $ 300.0 million from the Development Agreement and $ 50.0 million from the Purchase Agreement between the two units of accounting on a relative fair value basis at the time of the transaction. The Company allocated $ 294.5 million, which includes $ 0.8 million in transaction costs incurred, in transaction consideration to the liability, and $ 55.5 million to the common shares. The Company determined the fair value of the common shares based on the closing stock price on the June 24, 2020, the closing date of the Development Agreement. The effective interest rate under the Development Agreement, including transaction costs, is approximately 13.8 %. The Company reassessed the expected royalty payments and lowered our previous estimate of future sales for which royalties will be paid. Accordingly, we have prospectively adjusted and recognized lower non-cash interest expense using a 10.9 % effective interest rate, as of March 31, 2022. The following table shows the activity within the liability related to sale of future royalties for the three months ended March 31, 2022: Liability Related to Sale of Future Royalties (in thousands) Balance at December 31, 2021 $ 362,928 Non-cash interest expense recognized 9,855 Balance at March 31, 2022 372,783 Less: Unamortized transaction cost ( 770 ) Carrying value at March 31, 2022 $ 372,013

Other Income (Expense), Net

Other Income (Expense), Net	3 Months Ended
	Mar. 31, 2022
Other Income And Expenses [Abstract]
Other Income (Expense), Net	5. Other Income (Expense), Net Three Months Ended March 31 2022 2021 (in thousands) Other income (expense), net Investment income $ 132 $ 80 Interest expense — ( 1,714 ) Non-cash interest expense on liability ( 9,871 ) ( 10,925 ) Other income (expense) ( 33 ) 3 Total other income (expense), net $ ( 9,772 ) $ ( 12,556 ) Investment Income Interest income consists primarily of interest generated from our cash and cash equivalents. Interest Expense Interest expense consists primarily of the imputed interest from amount due to AbbVie under the Reacquisition Agreement. Non-Cash Interest Expense on Liability Related to Sale of Future Royalties Non-cash interest expense consists of recognition of interest expense based on the Company’s current estimate of future royalties expensed to be paid over the estimated term of the Development Agreement. Other Income (Expense) Other income (expense) consists primarily of gains and losses on foreign currency exchange.

Leases

Leases	3 Months Ended
	Mar. 31, 2022
Leases [Abstract]
Leases	6. Leases The Company headquarters is located in Plano, Texas, where it leases approximately 122,000 square feet of office space. The Company leases additional space located in Irving, Texas, where it leases approximately 34,890 square feet of office and laboratory space. On February 4, 2022, the Company extended the lease for the office and laboratory space in Irving, Texas, to October 31, 2024 , with an option to extend for a fixed twelve-month period. On March 8, 2022, the Company extended the lease for the Plano office to December 31, 2023 . The Company has an additional lease of a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas with an initial lease term of 16 years. The Company entered into the lease agreement on October 15, 2019 (the 2019 Lease Agreement), and at the Company’s option , it may renew the lease for two consecutive five-year renewal periods or one ten-year renewal period . On December 15, 2021, the Company obtained control of the space, and, accordingly, the Company recorded related right-of-use assets and the lease liabilities during the fourth quarter of 2021. The Company recorded the liability associated with the 2019 Lease Agreement at the present value of the lease payments not yet paid, using the discount rate as of the commencement date. As the discount rate implicit in the 2019 Lease Agreement was not readily determinable, the Company utilized its incremental borrowing rate. The renewals are not assumed in the determination of the lease term, since they are not deemed to be reasonably assured at the inception of the lease. At inception, the Company recorded $ 124.5 million as a right-of-use asset, which represented a lease liability of $ 133.2 million, net of $ 8.7 million of lease incentives recognized. For the three months ended March 31, 2022, the Company paid $ 0.8 million for amounts included in the measurement of lease liabilities. During the three months ended March 31, 2022, and 2021, the Company recorded total rent expense of $ 4.3 million and $ 0.8 million, respectively. Supplemental balance sheet and other information related to the Company’s operating leases is as follows: As of March 31, 2022 2021 Weighted-average remaining lease term (in years) 15.6 1.5 Weighted-average discount rate 6.5 % 8.1 % Maturities of lease liabilities by fiscal year for the Company’s operating leases: As of March 31, 2022 (in thousands) 2022 (remaining nine months) $ 9,748 2023 (1) 10,638 2024 7,427 2025 13,737 Thereafter 196,049 Total lease payments (1) 237,599 Less: Imputed interest ( 96,012 ) Present value of lease liabilities $ 141,587 (1) Above table assumes one year rent abatement is applied beginning in June 2023 following United States Food and Drug Administration (FDA) approval of omaveloxolone.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Income Taxes	7. Income Taxes The following table summarizes income tax (benefit) expense and effective income tax rate: Three Months Ended March 31 2022 2021 (in thousands, except for percentage data) Benefit from (provision for) taxes on income $ ( 31 ) $ 15 Effective income tax rate 0.0 % 0.0 % The Company’s effective tax rate for the three months ended March 31, 2022, varies with the statutory rate primarily due to changes in the valuation allowance related to certain deferred tax assets generated or utilized in the applicable period. Deferred tax assets are regularly reviewed for recoverability by jurisdiction and valuation allowances are established based on historical and projected future taxable losses and the expected timing of the reversals of existing temporary differences. The Company has recorded valuation allowances against the majority of its deferred tax assets as of March 31, 2022 , and the Company expects to maintain these valuation allowances until there is sufficient evidence that future earnings can be achieved, which is uncertain at this time.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	8. Stock-Based Compensation The following table summarizes time-based and performance-based stock compensation expense reflected in the consolidated statements of operations: Three Months Ended March 31 2022 2021 (in thousands) Research and development $ 7,606 $ 6,808 General and administrative 7,838 7,871 Total stock compensation expense $ 15,444 $ 14,679 Restricted Stock Units (RSUs) The following table summarizes RSU activity as of March 31, 2022, under the Second Amended and Restated Long Term Incentive Plan (LTIP Plan) agreement: Number of Weighted-Average Outstanding at January 1, 2022 809,145 $ 66.91 Granted 513,559 27.36 Vested ( 37,942 ) 110.88 Forfeited ( 67,917 ) 71.76 Outstanding at March 31, 2022 1,216,845 $ 48.58 As of March 31, 2022, total unrecognized compensation expense related to RSU and performance-based RSUs awards that were deemed probable of vesting was approximately $ 40.8 million, which excludes 148,000 shares of unvested performance-based RSUs that were deemed not probable of vesting totaling unrecognized stock-based compensation expense of $ 14.2 million. Stock Options The following table summarizes stock option activity as of March 31, 2022, under the LTIP Plan and standalone option agreements: Number of Weighted- Outstanding at January 1, 2022 4,743,180 $ 86.06 Granted 1,110,981 27.78 Exercised ( 9,375 ) 21.25 Forfeited ( 175,492 ) 114.33 Expired ( 7,468 ) 145.19 Outstanding at March 31, 2022 5,661,826 $ 73.78 Exercisable at March 31, 2022 3,013,168 $ 59.05 As of March 31, 2022, total unrecognized compensation expense related to stock options was approximately $ 88.4 million, which excludes 568,450 shares of unvested performance-based stock options that were deemed not probable of vesting totaling unrecognized stock-based compensation expense of $ 49.4 million. The total intrinsic value of all outstanding options and exercisable options as of March 31, 2022 was $ 24.5 million and $ 18.9 million, respectively. The number of weighted average options that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive represented 6,878,671 and 4,766,386 shares as of March 31, 2022 and 2021 , respectively.

Employee Benefit Plans

Employee Benefit Plans	3 Months Ended
	Mar. 31, 2022
Compensation And Retirement Disclosure [Abstract]
Employee Benefit Plans	9. Employee Benefit Plans In 2010, we adopted an Employee Investment Plan, qualified under Section 401(k) of the Internal Revenue Code, which is a retirement savings plan covering substantially all of our U.S. employees (the Plan). The Plan is administered under the “safe harbor” provision of ERISA. Under the Plan, an eligible employee may elect to contribute a percentage of their salary on a pre-tax basis, subject to federal statutory limitations. Beginning in January 2019, the Company implemented a discretionary employer matching contribution of $ 1.00 for every $ 1.00 contributed by a participating employee up to $ 7,000 and $ 6,000 annually in 2022 and 2021, respectively, which such matching contributions become fully vested after four years of service. The Company recorded expense of $ 1.3 million and $ 0.8 million for the three months ended March 31, 2022 and 2021, respectively, which includes the Company’s contributions and administrative costs.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2022
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	10. Commitments and Contingencies Litigation From time to time, the Company is a party to legal proceedings in the course of its business, including the matters described below. The outcome of any such legal proceedings, regardless of the merits, is inherently uncertain. In addition, litigation and related matters are costly and may divert the attention of our management and other resources that would otherwise be engaged in other activities. If the Company were unable to prevail in any such legal proceedings, its business, results of operations, liquidity and financial condition could be adversely affected. The Company recognizes accruals for litigations to the extent that it can conclude that a loss is both probable and reasonably estimable and recognizes legal expenses as incurred. Bardoxolone Securities Litigation Four putative stockholders of the Company filed complaints for alleged violations of the federal securities laws against the Company and certain of its executives, including its Chief Executive Officer, its Chief Operating Officer and Chief Financial Officer, and its Chief Innovation Officer (in one of the suits), three of the complaints were filed in the United States District Court for the Eastern District of Texas, and one was filed in the District of New Jersey. The complaints allege, among other things, that the Company (and certain of its executives) made false and misleading statements regarding the sufficiency of the Phase 3 CARDINAL study to support an NDA for bardoxolone in the treatment of CKD caused by Alport syndrome, and the Company’s interactions with the FDA concerning the study. The complaints filed in the United States District Court for the Eastern District of Texas, were consolidated on April 22, 2022, and the complaint filed in the District of New Jersey on February 18, 2022, which subsequently was voluntarily dismissed. The plaintiffs seek, among other things, a class action designation, an award of damages, and costs and expenses, including attorney fees and expert fees. The Company currently expects a single, consolidated, amended complaint to be filed in the future. The Company believes that the allegations contained in the complaints are without merit and intends to defend the cases. The Company cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom. Derivative Lawsuit An alleged stockholder of the Company filed a derivative action in the Court of Chancery of the State of Delaware against all of the directors of the Company and naming the Company as a nominal defendant. The plaintiff asserts claims in the complaint of breach of fiduciary duty and unjust enrichment concerning the alleged payment of excessive compensation to the non-employee directors of the Company between fiscal years 2019 and 2021. The plaintiff seeks, among other things, an order awarding damages and costs and expenses, including attorneys and expert fees, and directing the Board of Directors to reform and improve its corporate governance and internal procedures relating to the award of non-employee director compensation. The defendants believe that the allegations contained in the complaint are without merit and intend to defend the case. The Company cannot predict at this point the length of time that this action will be ongoing or the liability, if any, which may arise therefrom. Indemnifications Accounting Standards Codification 460, Guarantees , requires that, upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligations it assumes under that guarantee. As permitted under Delaware law and in accordance with the Company’s bylaws, officers and directors are indemnified for certain events or occurrences, subject to certain limits, while the officer or director is or was serving in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company has obtained director and officer insurance that limits its exposure and may enable recoverability of a portion of any future amounts paid. The Company believes the fair value for these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations as of March 31, 2022. The Company has certain agreements with licensors, licensees, collaborators, and vendors that contain indemnification provisions. In such provisions, the Company typically agrees to indemnify the licensor, licensee, collaborator, or vendor against certain types of third-party claims. The Company accrues for known indemnification issues when a loss is probable and can be reasonably estimated. There were no accruals for expenses related to indemnification issues for any period presented.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2022
Subsequent Events [Abstract]
Subsequent Events	11. Subsequent Events On May 6, 2022, an alleged stockholder of the Company filed a derivative action in the Court of Chancery of the State of Delaware against all of the directors of the Company and naming the Company as a nominal defendant. See Note 10, Commitments and Contingencies of Notes to Unaudited Consolidated Financial Statements for a description of the litigation.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The consolidated balance sheet at December 31, 2021, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the annual consolidated financial statements and footnotes thereto of the Company.
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies The significant accounting policies used in the preparation of these condensed consolidated financial statements for the three months ended March 31, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Liability Related to Sale of _2

Liability Related to Sale of Future Royalties (Tables)	3 Months Ended
	Mar. 31, 2022
Liability Related To Sale Of Future Royalties [Abstract]
Schedule of Activity Within Liability Related to Sale of Future Royalties	The following table shows the activity within the liability related to sale of future royalties for the three months ended March 31, 2022: Liability Related to Sale of Future Royalties (in thousands) Balance at December 31, 2021 $ 362,928 Non-cash interest expense recognized 9,855 Balance at March 31, 2022 372,783 Less: Unamortized transaction cost ( 770 ) Carrying value at March 31, 2022 $ 372,013

Other Income (Expense), Net (Ta

Other Income (Expense), Net (Tables)	3 Months Ended
	Mar. 31, 2022
Other Income And Expenses [Abstract]
Summary of Other Income (Expense), Net	Three Months Ended March 31 2022 2021 (in thousands) Other income (expense), net Investment income $ 132 $ 80 Interest expense — ( 1,714 ) Non-cash interest expense on liability ( 9,871 ) ( 10,925 ) Other income (expense) ( 33 ) 3 Total other income (expense), net $ ( 9,772 ) $ ( 12,556 )

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2022
Leases [Abstract]
Summary of Supplemental Balance Sheet and Other Information Related to Operating Leases	Supplemental balance sheet and other information related to the Company’s operating leases is as follows: As of March 31, 2022 2021 Weighted-average remaining lease term (in years) 15.6 1.5 Weighted-average discount rate 6.5 % 8.1 %
Schedule of Maturities of Lease Liabilities	Maturities of lease liabilities by fiscal year for the Company’s operating leases: As of March 31, 2022 (in thousands) 2022 (remaining nine months) $ 9,748 2023 (1) 10,638 2024 7,427 2025 13,737 Thereafter 196,049 Total lease payments (1) 237,599 Less: Imputed interest ( 96,012 ) Present value of lease liabilities $ 141,587 (1) Above table assumes one year rent abatement is applied beginning in June 2023 following United States Food and Drug Administration (FDA) approval of omaveloxolone.

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Schedule of Income Tax Expense (Benefit) and Effective Income Tax Rate	The following table summarizes income tax (benefit) expense and effective income tax rate: Three Months Ended March 31 2022 2021 (in thousands, except for percentage data) Benefit from (provision for) taxes on income $ ( 31 ) $ 15 Effective income tax rate 0.0 % 0.0 %

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Time Based and Performance-Based Stock Compensation Expense	The following table summarizes time-based and performance-based stock compensation expense reflected in the consolidated statements of operations: Three Months Ended March 31 2022 2021 (in thousands) Research and development $ 7,606 $ 6,808 General and administrative 7,838 7,871 Total stock compensation expense $ 15,444 $ 14,679
Summary of Restricted Stock Units Activity	The following table summarizes RSU activity as of March 31, 2022, under the Second Amended and Restated Long Term Incentive Plan (LTIP Plan) agreement: Number of Weighted-Average Outstanding at January 1, 2022 809,145 $ 66.91 Granted 513,559 27.36 Vested ( 37,942 ) 110.88 Forfeited ( 67,917 ) 71.76 Outstanding at March 31, 2022 1,216,845 $ 48.58
Summary of Stock Option Activity	The following table summarizes stock option activity as of March 31, 2022, under the LTIP Plan and standalone option agreements: Number of Weighted- Outstanding at January 1, 2022 4,743,180 $ 86.06 Granted 1,110,981 27.78 Exercised ( 9,375 ) 21.25 Forfeited ( 175,492 ) 114.33 Expired ( 7,468 ) 145.19 Outstanding at March 31, 2022 5,661,826 $ 73.78 Exercisable at March 31, 2022 3,013,168 $ 59.05

Collaboration Agreements - Addi

Collaboration Agreements - Additional Information (Details) - USD ($) $ in Thousands	Jul. 27, 2021	Dec. 31, 2009	Mar. 31, 2022	Mar. 31, 2021	Oct. 31, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Decrease in revenue recognition			$ 893	$ 795
Collaboration revenue			914	944
Interest expense			0	1,714
Kyowa Kirin Agreement | License Agreement Terms
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront license fee received		$ 35,000
Collaboration revenue, milestone payments received			50,000
Collaboration revenue, potential milestone payments			47,000
Collaboration revenue, additional potential commercial milestone payments			140,000
Decrease in revenue recognition				400
Collaboration agreement earned milestone payment	$ 5,000
Collaboration revenue	4,700
Deferred Revenue	$ 300
Deferred revenue remaining performance obligation period	2022-06
AbbVie
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Payable to collaborators					$ 330,000
Interest expense			$ 0	$ 1,700

Liability Related to Sale of _3

Liability Related to Sale of Future Royalties - Additional Information (Details) $ / shares in Units, $ in Millions	Jun. 24, 2020USD ($)Account$ / sharesshares	Mar. 31, 2022
Liability Related To Sale Of Future Royalties [Line Items]
Number of units of accounting related to consideration received | Account	2
Liability related to sale of future royalties, net	$ 294.5
Transaction cost of liability related to sale of future royalties	0.8
Transaction consideration allocated to common shares	$ 55.5
Effective interest rate including transaction costs	13.80%
Non cash interest expense recognized percentage		10.90%
Development Agreement
Liability Related To Sale Of Future Royalties [Line Items]
Proceeds from royalty agreement	$ 300
Purchase Agreement
Liability Related To Sale Of Future Royalties [Line Items]
Proceeds from issuance of common stock, net	50
Purchase Agreement | Common Stock A | BXLS
Liability Related To Sale Of Future Royalties [Line Items]
Proceeds from issuance of common stock, net	$ 50
Issuance of common stock | shares	340,793
Shares issued, price per share | $ / shares	$ 146.72

Liability Related to Sale of _4

Liability Related to Sale of Future Royalties - Schedule of Activity Within Liability Related to Sale of Future Royalties (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022USD ($)
Liability Related To Sale Of Future Royalties [Abstract]
Liability related to sale of future royalties, Balance at December 31, 2021	$ 362,928
Non-cash interest expense recognized	9,855
Liability related to sale of future royalties, Balance at March 31, 2022	372,783
Less: Unamortized transaction cost	(770)
Liability related to sale of future royalties, Carrying value at March 31, 2022	$ 372,013

Other Income (Expense), Net - S

Other Income (Expense), Net - Summary of Other Income (Expense), Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Other income (expense), net
Investment income	$ 132	$ 80
Interest expense	0	(1,714)
Non-cash interest expense on liability related to sale of future royalty	(9,871)	(10,925)
Other income (expense)	(33)	3
Total other income (expense), net	$ (9,772)	$ (12,556)

Leases - Additional Information

Leases - Additional Information (Details) $ in Thousands	Mar. 08, 2022	Feb. 04, 2022	Oct. 15, 2019ft²	Mar. 31, 2022USD ($)ft²	Mar. 31, 2021USD ($)	Dec. 31, 2021USD ($)	Dec. 15, 2021USD ($)
Lessee Lease Description [Line Items]
Cash paid for amounts included in the measurement of lease liabilities				$ 800
Operating lease, expense				4,300	$ 800
Operating lease right-of-use asset				131,178		$ 126,777
Operating lease liability				$ 141,587
Plano Texas
Lessee Lease Description [Line Items]
Operating lease, option to extend	extended the lease for the Plano office to December 31, 2023
Lease expiration date	Dec. 31, 2023
Plano Texas | Office Space
Lessee Lease Description [Line Items]
Area of real estate property | ft²				122,000
Plano Texas | Office And Laboratory Space | 2019 Lease Agreement
Lessee Lease Description [Line Items]
Area of real estate property | ft²			327,400
Operating lease, existence of option to extend			true
Renewal lease term, option one				two consecutive five-year renewal periods
Lease initial term			16 years
Renewal lease term, option two				one ten-year renewal period
Operating lease right-of-use asset							$ 124,500
Operating lease liability							133,200
Lease Incentive, net							$ 8,700
Irving Texas
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend		true
Operating lease, option to extend		extended the lease for the office and laboratory space in Irving, Texas, to October 31, 2024
Operating lease, renewal Term		12 months
Lease expiration date		Oct. 31, 2024
Irving Texas | Office And Laboratory Space
Lessee Lease Description [Line Items]
Area of real estate property | ft²				34,890

Leases - Summary of Supplementa

Leases - Summary of Supplemental Balance Sheet and Other Information Related to Operating Leases (Details)	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Weighted-average remaining lease term (in years)	15 years 7 months 6 days	1 year 6 months
Weighted-average discount rate	6.50%	8.10%

Leases - Schedule of Maturities

Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2022USD ($)
Leases [Abstract]
2022 (remaining nine months)	$ 9,748
2023	10,638	[1]
2024	7,427
2025	13,737
Thereafter	196,049
Total lease payments	237,599	[1]
Less: Imputed interest	(96,012)
Present value of lease liabilities	$ 141,587
[1]	Above table assumes one year rent abatement is applied beginning in June 2023 following United States Food and Drug Administration (FDA) approval of omaveloxolone.

Income Taxes - Summary of Incom

Income Taxes - Summary of Income Tax (Benefit) Expense and Effective Income Tax Rate (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Benefit from (provision for) taxes on income	$ (31)	$ 15
Effective income tax rate	0.00%	0.00%

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Time Based and Performance-Based Stock Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock compensation expense	$ 15,444	$ 14,679
Research and development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock compensation expense	7,606	6,808
General and administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock compensation expense	$ 7,838	$ 7,871

Stock-Based Compensation - Su_2

Stock-Based Compensation - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Unit (RSUs)	3 Months Ended
	Mar. 31, 2022$ / sharesshares
Number of RSUs
Number of RSUs - Beginning balance | shares	809,145
Number of RSUs, Granted | shares	513,559
Number of RSUs, Vested | shares	(37,942)
Number of RSUs, Forfeited | shares	(67,917)
Number of RSUs - Ending balance | shares	1,216,845
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value - Beginning balance | $ / shares	$ 66.91
Weighted-Average Grant Date Fair Value, Granted | $ / shares	27.36
Weighted-Average Grant Date Fair Value, Vested | $ / shares	110.88
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares	71.76
Weighted-Average Grant Date Fair Value - Ending balance | $ / shares	$ 48.58

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 15,444	$ 14,679
Total intrinsic value of outstanding options	24,500
Total intrinsic value of exercisable options	$ 18,900
Weighted average anti-dilutive shares excludes from computation of earnings per share	6,878,671	4,766,386
Restricted Stock Unit (RSUs) and Performance-based (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 40,800
Performance-based RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 14,200
Performance-based stock options deemed not probable of vesting	148,000
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 88,400
Performance-based Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 49,400
Performance-based stock options deemed not probable of vesting	568,450

Stock-Based Compensation - Su_3

Stock-Based Compensation - Summary of Stock Option Activity (Details)	3 Months Ended
	Mar. 31, 2022$ / sharesshares
Number of Options, Abstract
Number of Options, Outstanding - Beginning balance | shares	4,743,180
Number of Options, Granted | shares	1,110,981
Number of Options, Exercised | shares	(9,375)
Number of Options, Forfeited | shares	(175,492)
Number of Options, Expired | shares	(7,468)
Number of Options, Outstanding - Ending balance | shares	5,661,826
Number of Options, Exercisable | shares	3,013,168
Weighted Average Price, Abstract
Weighted-Average Price, Outstanding - Beginning balance | $ / shares	$ 86.06
Weighted-Average Price, Granted | $ / shares	27.78
Weighted-Average Price, Exercised | $ / shares	21.25
Weighted-Average Price, Forfeited | $ / shares	114.33
Weighted-Average Price, Expired | $ / shares	145.19
Weighted-Average Price, Outstanding - Ending balance | $ / shares	73.78
Weighted-Average Price, Exercisable | $ / shares	$ 59.05

Employee Benefit Plans - Additi

Employee Benefit Plans - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Compensation And Retirement Disclosure [Abstract]
Defined benefit plan, description	we adopted an Employee Investment Plan, qualified under Section 401(k) of the Internal Revenue Code, which is a retirement savings plan covering substantially all of our U.S. employees (the Plan).
Defined contribution plan employer discretionary contribution amount	$ 1,000	$ 1,000
Maximum employee contributions to the plan annually	$ 7,000,000	$ 6,000,000
Period of matching contributions to vest	4 years	4 years
Defined contribution plan including contributions and administrative costs expenses	$ 1,300,000	$ 800,000

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2022USD ($)
Commitments And Contingencies Disclosure [Abstract]
Accrual expenses related to indemnification	$ 0