ARDX 10-K & 10-Q changes, risk factors and insider trading

We have incurred losses in each year since our inception in October 2007, and we do not know whether or when we will become profitable.2007. We continue to incur significant commercialization, development and additional expenses related to our ongoing operations and pursuit of future business opportunities. As of December 31, 2024,2025, we had an accumulated deficit of $885.3$946.9 million. Our prior losses, combined with any future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

There are no assurances that our efforts to meet our operating cash flow requirements will be successful. If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessaryinvestments expenditureswe andmay meetelect to make in building our obligations,pipeline, we will not be able achieve or, if achieved, to sustain cash flow positivity, and our liquidity, financial condition, and business prospects willmay be materially affected.

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

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

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

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

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

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

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

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

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

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

There is no guarantee that we will achieve sufficient market acceptance for XPHOZAH, or that we will be able to secure and maintain adequate coverage and reimbursement for XPHOZAH, or generate sufficient revenue from product sales of XPHOZAH. The inclusion of XPHOZAH in the ESRD PPS creates additional uncertainty as to the commercial opportunity for XPHOZAH. See “—XPHOZAH isbecame nowpart included inof the ESRD PPS,PPS effectiveon January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,D; this resulted in a negative and asmaterial aimpact resulton our XPHOZAH revenue in 2025; and the revenuecontinued that we may generate on saleslack of Medicare Part D coverage for XPHOZAH will beresult negativelyin anda materially impactedlower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” below.

XPHOZAH isbecame nowpart included inof the ESRD PPS,PPS effectiveon January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,D; this resulted in a negative and asmaterial aimpact resulton our XPHOZAH revenue in 2025; and the revenuecontinued that we may generate on saleslack of Medicare Part D coverage for XPHOZAH will beresult negativelyin anda materially impacted.lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS.

In January 2011, the CMS, an agency within the United States Department of Health and Human Services responsible for administering the Medicare program, implemented the ESRD PPS, a new PPS for dialysis treatment. Under the ESRD PPS, CMS generally makes a single bundled payment to the dialysis facility for each dialysis treatment that covers all items and services routinely required for dialysis treatments furnished to Medicare beneficiaries in Medicare-certified ESRD facilities or at their home, including the cost of certain drugs defined by CMS to be part of the renal dialysis service. CMS included XPHOZAH in the ESRD PPS, effective January 1, 2025, which meanseliminating coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,D. The change in Medicare reimbursement coverage had a negative and asmaterial aimpact resulton our XPHOZAH revenue in 2025. We anticipate the revenuecontinued that we may generate on saleslack of Medicare Part D coverage for XPHOZAH will beresult negativelyin anda materially impacted.lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS.

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

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

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

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

In the U.S., CMS decides whether and to what extent a new drug will be covered and reimbursed under Medicare. Private payors tend to follow the coverage reimbursement policies established by CMS to a substantial degree. BeginningOn January 1, 2025, XPHOZAH, along with other oral drugs for ESRD relatedpatients drugson dialysis without injectable or intravenous equivalents, arebecame nowpart included inof the ESRD PPS,PPS thereby eliminatingand coverage for XPHOZAH and these other ESRD relatedoral drugs under Medicare Part D aswas of such date.eliminated. See “—XPHOZAH isbecame nowpart included inof the ESRD PPS,PPS effectiveon January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longer available under Medicare Part D,D; this resulted in a negative and asmaterial aimpact resulton our XPHOZAH revenue in 2025; and the revenuecontinued that we may generate on saleslack of Medicare Part D coverage for XPHOZAH will beresult negativelyin anda materially impactedlower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” above.

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

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

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

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

On February 23, 2022, we entered into a loan and security agreement (the 2022 Loan Agreement) with SLR as collateral agent and the lenders listed in the 2022 Loan Agreement (collectively, the 2022 Lenders). The 2022 Loan Agreement was subsequently amended in August 2022 (the First Amendment), February 2023 (the Second Amendment), October 2023 (the Third Amendment) and, October 2024 (Fourth Amendment), and June 2025 (Fifth Amendment). The loan was funded in the amount of $27.5 million on February 23, 2022 and additional amounts of $22.5 million, $50.0 million, $50.0 million and $50.0 million were drawn on October 19, 2023, March 1, 2024, and October 29, 2024,2024 and June 30, 2025, respectively. In addition, we have the option to draw up to an additional $100.0 million, consisting of two separate term loans, each in a principal amount of $50.0 million: by(a) the first of which is available at the Company’s election through June 30, 2025.2026 and (b) the second of which is available at the Company’s election through December 20, 2026. Until we have repaid all funded indebtedness, the 2022 Loan Agreement subjects us to various customary covenants, including requirements as to financial reporting and insurance and restrictions on our ability to dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to enter into licensing agreements, to engage in transactions with affiliates, and to encumber our intellectual property. Our business may be adversely affected by these restrictions on our ability to operate our business.

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

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

While we believe that our estimates, assumptions and judgments are reasonable, they are based on information availablepresently when the estimate or assumption was made.available. Actual results may differ significantly.significantly Additionally,from these estimates due to changes in ourjudgments, assumptions, estimatesassumptions or assessmentsconditions dueas toa result of unforeseen events or otherwiseotherwise, which could have a material impact on our financial position orand results of operations.

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

GTNProduct adjustmentsrevenue areis primarilyrecognized awhen functionCustomers take control of salesthe volume,product, payorwhich mix,typically contractualoccurs orupon legislativedelivery discountsto andthe rebates.Customers. The transaction price for product sales, netsales is reduced for estimates of variable consideration related to GTN adjustments for(i) discounts and chargebacks, (ii) rebates, wholesaler and GPO fees, and (iii) copay assistance and returns.returns (collectively, gross-to-net adjustments or GTN adjustments). Except for certain wholesaler and GPO fees and discounts, which are based on contracts, theseour estimates of GTN adjustments involve estimationassumptions and judgment.judgments. TheOur estimates of GTN adjustments for rebates, copay assistance and chargebacks are impacted by our estimate of payor mix, which requiresrequire significant judgment.assumptions Weand considerjudgments, considering factors such as legal interpretations of applicable laws and regulations, historical experience, payor mix (e.g., Medicare or Medicaid), current contract prices under applicable programs, unbilled claims, processing time lags and inventory levels in the distribution channel in determining our estimates.channel. Estimates are assessed each period and adjusted as required to revise information or actual experience.

Discounts and chargebacks:Chargebacks

Our U.S. business participates in programs with government entities, the most significant of which are the U.S. Department of Defense andDefense, the U.S. Department of Veterans Affairs,VA, and other parties, including covered entities under the 340B program, whereby pricing on products is extended below wholesalerwholesale listacquisition cost (lower program price) tofor participatingqualified entities.government Theseproviders entities purchasewhen products are purchased through wholesalerswholesalers. atThe chargeback represents the difference between the wholesale acquisition cost and this lower program price andthat the wholesalers then charge usus. theIn differencesuch betweensales, their acquisition cost and the lower program price. Accountsaccounts receivable is reduced for the estimated amount of unprocessed chargeback claims attributable to a sale (typically within a twotwo- to four weekfour-week time lag).

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

Rebates, wholesalerWholesaler and GPO fees:Fees

WholesalerWe pay wholesaler and GPO administrativefees feesfor distribution and related services, which are a significant portion of our GTN adjustments,adjustments; however, since they are based on contracts, they require inherently less estimation.

Copay assistanceAssistance and returns:Returns

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

Use of Information from External Sources:

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

RevenueRevenues

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

The increase in IBSRELA product sales, net in 20242025 and 20232024 wasprimarily due toreflected higher demanddemand, sincedriven its commercial launch in March 2022, reflectingby continued increase in awareness and prescriber experience. InTo addition,a lesser extent, the increase in 20242025 wasalso attributablereflected tohigher thenet completion of our field-base team expansion.price.

The increase in productProduct supply revenue inis 2024primarily andimpacted 2023by wasthe duetiming toof product supply shipments to our collaboration partners, primarily Kyowa Kirin,partners under our respective commercialproduct supply agreements in support of non-USthe launches.development and commercialization of our products ex-U.S. by our collaboration partners. The product supply revenue was primarily attributable to Kyowa Kirin for all years presented.

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

Non-cash royalty revenue in 2024 was attributable toreflects royalties and commercialization milestones from Kyowa Kirin for sales of PHOZEVEL in JapanJapan, sincewhich itswas launchlaunched in February 2024, which we remitted to HCR upon receipt in accordance with the HCR Agreement.2024.

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

We have incurred losses in each year since our inception, and if we are unable to continue to increase revenue and/or, dependingif uponwe our pursuit ofpursue future business opportunities, we may not achieve expected cash flow positivity,positivity when expected or at all, and even if we do, we may not be able to sustain cash flow positivity quarter over quarter and year over year.

We have incurred losses in each year since our inception in October 2007. We continue to incur commercialization, development and additional expenses related to our ongoing operations and pursuit of future business opportunities. As of MarchJune 31,30, 2026, we had an accumulated deficit of $984.5$1.0 million.billion. Our prior losses, combined with any future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

If we are unable to continue to increase revenue for IBSRELA and XPHOZAH, and/or if we elect to pursue future business opportunities to strengthen our pipeline, we may not achieve expected cash flow positivity,positivity when expected or at all, and even if we do, we may not be able to sustain cash flow positivity quarter over quarter and year over year.

With respect to our commercialization of IBSRELA and XPHOZAH, our revenue, and therefore, our ability to achieve and sustain cash flow positivity will be dependent, in part, upon the size of the markets in the U.S., the label for which approval was granted, accepted price for the product, and the ability to secure and maintain adequate reimbursement. On January 1, 2025, XPHOZAH, along with other oral drugs for ESRD patients on dialysis without injectable or intravenous equivalents, became part of the ESRD PPS and coverage for XPHOZAH and these other oral drugs under Medicare Part D was eliminated. The inclusion of XPHOZAH in the ESRD PPS creates additional uncertainty as to the commercial opportunity for XPHOZAH. In addition, CMS’ March 27, 2026 operational guidance reiterating that ESRD facilities are expected by CMS to furnish XPHOZAH under the ESRD PPS bundled payment regardless of manufacturer distribution preferences could adversely affect XPHOZAH revenue. See “—XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longernot available under Medicare Part D; this resulted in a negative and material impact on our XPHOZAH revenue in 2025; and the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” below.

If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund investments we may elect to make in building our pipeline, we will not be able to achieve or, if achieved, to sustain cash flow positivity, and our liquidity, financial condition, and business prospects may be materially affected.

There is no guarantee that we will achieve sufficient market acceptance for XPHOZAH, or that we will be able to secure and maintain adequate coverage and reimbursement for XPHOZAH, or generate sufficient revenue from product sales of XPHOZAH. The inclusion of XPHOZAH in the ESRD PPS creates additional uncertainty as to the commercial opportunity for XPHOZAH. In addition, CMS’ March 27, 2026 operational guidance reiterating that ESRD facilities are expected by CMS to furnish XPHOZAH under the ESRD PPS bundled payment regardless of manufacturer distribution preferences could adversely affect XPHOZAH revenue. See “—XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longernot available under Medicare Part D; this resulted in a negative and material impact on our XPHOZAH revenue in 2025; and the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” below.

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

In January 2011, CMS, an agency within the United States Department of Health and Human Services responsible for administering the Medicare program, implemented the ESRD PPS, a new PPS for dialysis treatment. Under the ESRD PPS, CMS generally makes a single bundled payment to the dialysis facility for each dialysis treatment that covers all items and services routinely required for dialysis treatments furnished to Medicare beneficiaries in Medicare-certified ESRD facilities or at their home, including the cost of certain drugs defined by CMS to be part of the renal dialysis service. CMS included XPHOZAH in the ESRD PPS, effective January 1, 2025, eliminating coverage for XPHOZAH for Medicare beneficiaries under Medicare Part D. The change in Medicare reimbursement coverage had a negative and material impact on our XPHOZAH revenue in 2025 and may have a material adverse impact on our XPHOZAH revenue in future periods. We anticipate the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS. On June 26, 2026, the U.S. Court of Appeals for the District of Columbia Circuit affirmed dismissal of our lawsuit against CMS regarding the inclusion of XPHOZAH in the ESRD PPS. See Note 14. Commitments and Contingencies for more information. In addition, on March 27, 2026, CMS issued operational guidance reiterating that ESRD facilities are expected by CMS to furnish XPHOZAH under the bundled payment, which may limit our ability to effectively pursue alternative distribution approaches for XPHOZAH and negatively impact our XPHOZAH revenue and pace of revenue growth.

•the extent to which this changechange, the March 2026 CMS operational guidance, the status of our lawsuit against CMS and any other regulatory action will interfere with the shared decision-making between healthcare professionals and their patients, regardless of insurance coverage; and

In the U.S., CMS decides whether and to what extent a new drug will be covered and reimbursed under Medicare. Private payors tend to follow the coverage reimbursement policies established by CMS to a substantial degree. On January 1, 2025, XPHOZAH, along with other oral drugs for ESRD patients on dialysis without injectable or intravenous equivalents, became part of the ESRD PPS and coverage for XPHOZAH and these other oral drugs under Medicare Part D was eliminated. See “—XPHOZAH became part of the ESRD PPS on January 1, 2025, which means coverage for XPHOZAH for Medicare beneficiaries is no longernot available under Medicare Part D; this resulted in a negative and material impact on our XPHOZAH revenue in 2025; and the continued lack of Medicare Part D coverage for XPHOZAH will result in a materially lower pace of revenue growth as compared to expectations before XPHOZAH became part of the ESRD PPS” above.

On February 23, 2022, we entered into a loan and security agreement (the 2022 Loan Agreement) with SLR as collateral agent and the lenders listed in the 2022 Loan Agreement (collectively, the Lenders). The 2022 Loan Agreement was subsequently amended in August 2022 (the First Amendment), February 2023 (the Second Amendment), October 2023 (the Third Amendment), October 2024 (Fourth Amendment), June 2025 (Fifth Amendment) and April 2026 (Sixth Amendment). The loan was funded in the amount of $27.5 million on February 23, 20222022. andAn additional amountsamount of $22.5 million, $50.0 million, $50.0 million and $50.0 million werewas drawn on October 19, 2023, and an additional $50.0 million was drawn on each of March 1, 2024, October 29, 20242024, June 30, 2025 and June 30,29, 2025,2026, respectively. These are referred to as the Terms A, B, C, DD, E and EF Loans.Loans, respectively. In connection with the Sixth Amendment, a portion of the $200.0 million in outstanding principal previously allocated among the Term A through C Loans was refinanced with a new Term H Loan, and the interest rate was collectively reduced under all term loans, including the undrawn term loansloans. As of June 30, 2026, we have the future option to draw from. We have the option to draw up to an additional $100.0$50.0 million,million consistingpursuant ofto two separate term loans (the Term F and Term G Loans), each in a principal amount of $50.0 million: (a) the first of which is available at the Company’s election through June 30, 2026 and (b) the second ofLoan, which is available at the Company’s election through December 20, 2026. Until we have repaid all funded indebtedness, the 2022 Loan Agreement subjects us to various customary covenants, including requirements as to financial reporting and insurance and restrictions on our ability to dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock, to redeem capital stock, to enter into licensing agreements, to engage in transactions with affiliates, and to encumber our intellectual property. Our business may be adversely affected by these restrictions on our ability to operate our business.

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

In addition to the currently available phosphate binders, we are aware of at least four phosphate binders in development, including AP-301, developed by Alebund Pharmaceutical (Hong Kong) Limited and currently in Phase 3; VS-505, developed by Vidasym and currently in clinicalPhase development2; and TS-172, developed by Taisho Pharmaceutical and currently in Phase 3;3. andOn OLC,June developed30, by2026, Unicycive Therapeutics, which hasis resubmitteddeveloping itsOLC, NDAannounced tothe receipt of a Complete Response Letter from the FDA forciting approvalmanufacturing via the 505(b)(2) pathway.deficiencies. Additionally, Alebund is developing AP-306, an inhibitor of phosphate transporters NaPi-2b, PiT-1, and PiT-2, thus far studied in a Phase 2 clinical trial.

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

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

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

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

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

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

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

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

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

The IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation (first due in 2023),inflation, as described under “—Current and future healthcare reform legislation, regulation or action by the current administration may increase the difficulty and cost for us to commercialize our approved products and may adversely affect the prices we, or they, may obtain and may have a negative impact on our business and results of operations.” The Medicare Part D rebate, if applicable, will be calculated on the basis of the AMP figures we report pursuant to the MDRP.

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

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

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

In cases where NCE exclusivity has been granted for an NDA, as in the case of IBSRELA and XPHOZAH, if an ANDA or 505(b)(2) sponsor has provided a Paragraph IV certification to the FDA when filing its application, the sponsor must also send a notice thereof to the NCE NDA owner. The NCE NDA owner may then initiate a patent infringement lawsuit in response to the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the NCE NDA owner’s receipt of a notice of the Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of 30 months after the NCE NDA owner’s receipt of the Paragraph IV certification notice, a final decision in the infringement case in favor of the ANDA or 505(b)(2) sponsor, or another date established by the court. There can be no assurances that an ANDA or 505(b)(2) NDA that references our IBSRELA or XPHOZAH NDAs and includes a Paragraph IV certification will not be filed, or that we will be successful in enforcing our Orange Book listed patents against such follow-onANDA productor 505(b)(2) sponsor. Furthermore, any Paragraph IV litigation, whether settled or litigated to resolution, could involve substantial expense, result in patent invalidation, trigger earlier-than-expected generic entry, or expose us to legal and regulatory challenges under federal and state antitrust laws.

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

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

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

We are a commercial-stage biopharmaceutical company focused on the development and commercialization of innovative medicines that meet significant unmet medical needs. We currently market two therapies from the active ingredient tenapanor, an NHE3 inhibitor that was discovered and developed by Ardelyx. NHE3 is an antiporter expressed on the apical surface of the small and large intestines. Tenapanor is a minimally absorbed, small molecule therapy. In addition, we are building a pipeline which is currently focused on expanding the commercial footprint of tenapanor.

Tenapanor, branded as IBSRELA®, is approved in the U.S. for the treatment of adults with IBS-C. We believe that IBSRELA can bring meaningful benefit to the approximately 13 million Americans who suffer from the symptoms of IBS-C, many of whom continue to experience symptoms despite intervention with other therapies. We are seeking to further expand the IBSRELA eligible patient population to include patients with CIC, and have initiated a Phase 3 clinical trial (ACCEL) evaluating tenapanor in adultadults CICwith patients.CIC. In January 2026, the Companywe dosed the first patient in ACCEL and hashave initiated all pre-identified sites. TheWe Company expectsexpect to complete enrollment by the end of 2026 withand to announce topline data read out in the second half of 2027. IBSRELA is also being evaluated in multiple pediatric clinical trials which could expand its use and potentially provide six months of additional patent life for tenapanor.

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

Effective as of April 28, 2026, we entered into the Sixth Amendment to our Loan Agreement with SLR as collateral agent and the lenders party thereto, resulting in abetter collectivelyoverall reduced interest rate under all term loans, including the term loans we have the future option to draw from, and an extended maturity date for the outstanding term loans. For additional information, refer to Note 15. Subsequent Events.terms.

The results of operations for the three and six months ended MarchJune 31,30, 2026 are not necessarily indicative of results to be expected for the entire year ending December 31, 2026, or for any other interim period or future year. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2025 Form 10-K to enhance the understanding of our financial metrics below.

The increase in IBSRELA product sales, net in the three and six months ended MarchJune 31,30, 2026 primarily reflected higher demand, driven by continued increase in awareness and prescriber experience, and to a lesser extent, higher net price.

The increase in XPHOZAH product sales, net in the three and six months ended MarchJune 31,30, 2026 remainedprimarily consistentreflected withhigher the prior yeardemand and reflectednet continued growth in other non-Medicare sales channels.price. XPHOZAH product sales, net in the priorsix yearmonths ended June 30, 2025 included a $3.8 million favorable adjustment driven by a change in previously estimated product returns.

The product supply revenue was primarily attributable to Fosun Pharma and Knight in the three and six months ended MarchJune 31,30, 20262026. In the three and six months ended June 30, 2025, respectively.the product supply revenue was primarily attributable to Kyowa Kirin.

The licensing revenue was primarily attributable to sales-based royalties received from Fosun Pharma in the three and six months ended June 30, 2026. The licensing revenue in the threesix months ended MarchJune 31,30, 2025 was primarily attributable toincluded a $5.0 million milestone earned in the 2025 first quarter under the terms of the Fosun Agreement, following the NDA approval by China’s Center for Drug Evaluation of the NMPA for tenapanor in the control of serum phosphorus in adult patients with CKD on hemodialysis.

The decrease in non-cash royalty revenue in the three and six months ended MarchJune 31,30, 2026 reflected lower royalties received from Kyowa Kirin for sales of PHOZEVEL in Japan.

The increase in GTN adjustment percentage in the three and six months ended MarchJune 31,30, 2026 primarily reflected the prior year favorable impact of a change in previously estimated XPHOZAH product returns, an unfavorable channel mix andas well as Medicare and Medicaid Inflation Rebate charges.

The increase in cost of product sales in the three and six months ended MarchJune 31,30, 2026 reflected higher product sales. A portion of the costs of IBSRELA and XPHOZAH units recognized as revenue during the three and six months ended MarchJune 31,30, 2026 was expensed as research and development expense in periods prior to the commencement of capitalization of inventory costs for each respective product. The cost associated with inventory sold but previously expensed as research and development was $0.3 million and $0.7$0.6 million for the three and six months ended MarchJune 31,30, 20262026, and $1.0 million and $1.7 million for the three and six months ended June 30, 2025, respectively. The value of inventory on hand as of MarchJune 31,30, 2026 and December 31, 2025 that was previously expensed as research and development was approximately $7.1$8.0 million and $10.9 million, respectively.

The decrease in other cost of revenue in the three and six months ended MarchJune 31,30, 2026 primarily reflected the full recognition of the maximum $75.0 million royalty obligation under the AstraZeneca Termination Agreement as of the end of the 2025 second quarter,quarter partiallyand offset by higherlower costs relatedassociated towith capacityproduct expansionsupply at our CMOs.revenue. Other cost of revenue related to the AstraZeneca Termination Agreement was $8.8$3.8 million and $12.7 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

The external R&D and other expenses consist primarily of expenses associated with life cycle management initiatives for tenapanor, including our CIC program. The increase in external R&D and other expenses in the three and six months ended MarchJune 31,30, 2026 reflected increased clinical trial activities, including the initiation of the Phase 3 clinical trialtrials evaluating tenapanor in adultadults CICwith patients.CIC, as well as engagement with medical and scientific communities in the areas of gastroenterology and nephrology related to our marketed products.

The increase in selling, general and administrative expenses in the three and six months ended MarchJune 31,30, 2026 primarily reflected increased commercialization and administrative costs to support net sales growth of IBSRELA, consisting of external spending for disease awareness initiatives, patient affordability, access support and related patient awareness, as well as increased commercial infrastructure costs. The increase was also attributable to increased headcount, including an incremental stock-based compensation expenseexpenses of $3.1 million.million and $6.2 million in the three and six months ended June 30, 2026, respectively.

The increase in interest expense in the three and six months ended MarchJune 31,30, 2026 primarily reflected a higher outstanding loan balance resulting from the Term E Loan draw inat the end of June 2025.2025, partially offset by the reduced interest rate under the term loans resulting from the Sixth Amendment to our Loan Agreement effective at the end of April 2026.

The decrease in non-cash interest expense related to the sale of future royalties in the three and six months ended MarchJune 31,30, 2026 primarily reflected the imputed interest accrued on the decreasing carrying value of the deferred royalty obligation and royalties received from Kyowa Kirin for sales of PHOZEVEL in Japan which were remitted to HCR.

We regularly assess our cash position and our working capital needs to execute our strategy. We have historically funded our operations primarily from product sales, sales of our common stock, funds from our loan agreements with SLR, funds from our collaboration partnerships, as well as the sale of future royalties and commercialization milestones to HCR. We expect that we will increasingly rely on cash generated from our commercial operations to fund our operating plan while maintaining financial flexibility to source cash from future equity sales and debt financing. Our capital allocation strategy includes (i) accelerating IBSRELA growth, (ii) investing in our current pipeline and (iii) maintaining financial strength.

In November 2025, we filed an automatic shelf registration statement on Form S-3ASR, which became effective upon filing, containing (i) a base prospectus, which covers the offering, issuance and sale from time to time in one or more offerings of our common stock, preferred stock, debt securities, warrants and/or units; and (ii) a prospectus supplement for the offering, issuance and sale of up to a maximum aggregate offering price of $100.0 million of our common stock that may be issued and sold from time to time under the 2025 Open Market Sales Agreement, deemed to be “at-the-market offerings.” Pursuant to the 2025 Open Market Sales Agreement, Jefferies, as sales agent, may receive a commission of up to three percent of the gross sales price for shares of our common stock sold under the 2025 Open Market Sales Agreement. As of MarchJune 31,30, 2026, there have been no sales of our common stock under the 2025 Open Market Sales Agreement.

We have a loan and security agreement with SLR (the 2022 Loan Agreement) with SLR.. The 2022 Loan Agreement provides a total of $300.0 million, of which $200.0$250.0 million has been drawn and is outstanding as of MarchJune 31,30, 2026. The additional available borrowingsborrowing of $100.0$50.0 million consistpursuant ofto the Term F and Term G Loans,Loan eachis in the amount of $50.0 million. The Term F and Term G Loans may be drawnavailable at the Company’sour election byto Junedraw 30, 2026 andthrough December 20, 2026, respectively.2026. See Note 9. Borrowing of our 2025 Form 10-K and Note 8. Borrowing of this Quarterly Report on Form 10-Q for further information on our long-term debt.

Net cash used in operating activities decreased in the threesix months ended MarchJune 31,30, 20262026, primarily due to the timing of our payments and inventory purchases, partially offset by the timing of cash collections from our Customers.

Net cash usedprovided inby investing activities increaseddecreased in the threesix months ended MarchJune 31,30, 20262026, primarily reflectedreflecting higher short-term investment purchases.

Cash flows from financing activities include net proceeds associated with our 2022 Loan Agreement, sales of our common stock with respect to the “at-the-market offering” programs and issuances of our common stock under our equity incentive plans.

Net cash provided by financing activities included the receipts of the Term F Loan and the Term E Loan in the six months ended June 30, 2026 and 2025, respectively. Net cash provided by financing activities increased in the threesix months ended MarchJune 31,30, 20262026, primarily due to higher proceeds received from the issuance of common stock under our equity incentive plans.

Based on our current operating model, we believe our available cash, cash equivalents and short-term investments as of MarchJune 31,30, 2026 will be sufficient to fund our planned operations for at least a period of one year from the issuance of these financial statements. We have based this estimate on assumptions that may prove to be wrong and we could utilize our available capital resources sooner than we currently expect. In particular, our operating plan may change and we may require significant additional capital to fund our operations. There are no assurances that our efforts to meet our operating cash flow requirements will be successful. If our current cash, cash equivalents and short-term investments as well as our plans to meet our operating cash flow requirements are not sufficient to fund necessary expenditures and meet our obligations following the issuance of these financial statements, our liquidity, financial condition and business prospects will be materially affected.

As of MarchJune 31,30, 2026, our total future payment obligation related to the outstanding balance of the term loans, excluding interest payments, was $209.9$260.8 million, which is due on July 1, 2028. As discussed in Note 15. Subsequent Events, effective as of April 28, 2026, we entered into the Sixth Amendment with SLR as collateral agent and the lenders party thereto.2030. See Note 9. Borrowing of our 2025 Form 10-K and Note 8. Borrowing of this Quarterly Report on Form 10-Q for further information on our long-term debt.

We have entered into various operating leases for our offices. As of MarchJune 31,30, 2026, our total undiscounted obligation for operating leases was $5.2$4.7 million, with maturities ranging up through July 2029. See Note 9. Leases for further information on our operating leases.