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What changed in Unicycive Therapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Unicycive Therapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+391 added−357 removedSource: 10-K (2024-03-28) vs 10-K (2023-03-31)

Top changes in Unicycive Therapeutics, Inc.'s 2023 10-K

391 paragraphs added · 357 removed · 287 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

136 edited+44 added−33 removed193 unchanged
Biggest changeChanging Access and Reimbursement Environment According to the most recent ESRD PPS “Final Rule” published for 2023, drugs for the treatment of hyperphosphatemia for Medicare beneficiaries, which are currently provided by Medicare Part D insurers are scheduled to be included into the dialysis bundle in 2025 and will be paid for separately by CMS through a Transitional Drug Add-On Payment Adjustment (TDAPA) program for a minimum of 2 years.
Biggest changeGiven its substantially lower pill burden than other phosphate binder options, we believe that OLC may be the most logical phosphate binder to combine with tenapanor making these two new medicines more complimentary than competitive as the combination would leverage two distinct mechanisms of action to control phosphorus with a much lower total pill burden than the current standard of care. -10- Changing Access and Reimbursement Environment By current federal regulation, phosphate lowering drugs (PLTs), which are currently provided to patients by Medicare Part D insurers, are scheduled to be included into the dialysis bundle in 2025 and will be paid for separately by CMS through a Transitional Drug Add-On Payment Adjustment (TDAPA) program for a minimum of 2 years.
In the 2023 Final Rule, CMS stated, “We have seen that incorporating Medicare Part D drugs into the ESRD PPS has had a significant positive effect of expanding access to such drugs for beneficiaries who do not have Medicare Part D coverage.” (federalregister.gov/d/2022-13449).
In the 2023 ESRD PPS Final Rule, CMS stated, “We have seen that incorporating Medicare Part D drugs into the ESRD PPS has had a significant positive effect of expanding access to such drugs for beneficiaries who do not have Medicare Part D coverage.” (federalregister.gov/d/2022-13449).
While pre-clinical requirements to start a clinical program for an IND would be similar for UNI-494 as for NCE (New Chemical Entity). We believe that the vast clinical data set from Nicorandil will potentially help us to expedite the clinical development program with the FDA.
While the pre-clinical requirements to start a clinical program for an IND would be similar for UNI-494 as for NCE (New Chemical Entity), we believe that the vast clinical data set from Nicorandil will potentially help us to expedite the clinical development program with the FDA.
Clinical Trials Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
In some events, the NDA may be required to be resubmitted with the additional information and it may be subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.
In some events, the NDA may be required to be resubmitted with additional information and it may be subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.
An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the similar procedures in reviewing NDA supplements as it does in reviewing the original NDAs.
An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses similar procedures in reviewing NDA supplements as it does in reviewing the original NDAs.
Similar to how payor coverage may affect the sales of a product, formulary status within dialysis organizations may affect what products are prescribed within that specific organization.
Similar to how payor coverage may affect the sales of a product, formulary status within dialysis organizations may affect what products are prescribed within that specific organization.
Therefore, if a product is not on a formulary, the prescribers within that organization may be less likely to prescribe that product or may have a difficult time prescribing that product, resulting in less sales.
Therefore, if a product is not on a formulary, the prescribers within that organization may be less likely to prescribe that product or may have a difficult time prescribing that product, resulting in less sales.
Further, one dialysis organization’s determination to add a product to their formulary does not assure that other dialysis organizations will also add the product to theirs. There is always a risk a dialysis organization will not contract with a drug manufacturer for a specific product, resulting in that product not being on that organization’s formulary.
Further, one dialysis organization’s determination to add a product to their formulary does not assure that other dialysis organizations will also add the product to theirs. There is always a risk a dialysis organization will not contract with a drug manufacturer for a specific product, resulting in that product not being on that organization’s formulary.
We cannot predict the outcome of such initiatives, but such initiatives, if passed, could result in significant costs to us in terms of costs of compliance and penalties associated with failure to comply. -18- Pharmaceutical Regulation in the United States In the United States, the FDA regulates drugs under the Food, Drug and Cosmetic Act (FDCA) and its implementing regulations.
We cannot predict the outcome of such initiatives, but such initiatives, if passed, could result in significant costs to us in terms of costs of compliance and penalties associated with failure to comply. Pharmaceutical Regulation in the United States In the United States, the FDA regulates drugs under the Food, Drug and Cosmetic Act (FDCA) and its implementing regulations.
Even if we obtain coverage for an approved product, third party payors may not establish adequate reimbursement amounts, which may reduce the demand for our product and prompt us to have to reduce pricing for the product. If reimbursement is not available or is limited, we may not be able to commercialize certain of our products.
Even if we obtain coverage for an approved product, third party payors may not establish adequate reimbursement amounts, which may reduce the demand for our product and prompt us to reduce pricing for the product. If reimbursement is not available or is limited, we may not be able to commercialize certain of our products.
Sphaera conceived of and performed initial characterization of various potential pro-drug linkers, including the initial patent application, and performed some initial physicochemical characterization and preliminary animal pharmacokinetic studies. -16- Under the terms of the Sphaera License Agreement, we are obligated to pay to Sphaera, on a quarterly basis, a running royalty of 2% of our net sales (including our affiliates) in connection with the global sales of UNI-494; provided, however, that if we are required to make royalty payments to one or more third parties whose patent rights would be infringed by the exercise of the UNI-494 Rights, we may reduce such running royalty due to Sphaera by the amount of such third-party royalty rate.
Sphaera conceived of and performed initial characterization of various potential pro-drug linkers, including the initial patent application, and performed some initial physicochemical characterization and preliminary animal pharmacokinetic studies. -15- Under the terms of the Sphaera License Agreement, we are obligated to pay to Sphaera, on a quarterly basis, a running royalty of 2% of our net sales (including our affiliates) in connection with the global sales of UNI-494; provided, however, that if we are required to make royalty payments to one or more third parties whose patent rights would be infringed by the exercise of the UNI-494 Rights, we may reduce such running royalty due to Sphaera by the amount of such third-party royalty rate.
In 2020, the number of prevalent dialysis patients declined due to an increased death rate of dialysis patients as a consequence of COVID-19. -3- Current treatment of hyperphosphatemia The treatment goal for patients with hyperphosphatemia is focused on controlling the level of phosphate in the body.
In 2020-21, the number of prevalent dialysis patients declined due to an increased death rate of dialysis patients as a consequence of COVID-19. -3- Current treatment of hyperphosphatemia The treatment goal for patients with hyperphosphatemia is focused on controlling the level of phosphate in the body.
Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor. -23- Dialysis-related drugs are included in the ESRD bundled prospective payment system (PPS) for renal dialysis services furnished to Medicare beneficiaries and are grouped into functional categories such as bone and mineral metabolism, except that oral-only drugs are exempted from inclusion until 2025.
Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor. -22- Dialysis-related drugs are included in the ESRD bundled prospective payment system (PPS) for renal dialysis services furnished to Medicare beneficiaries and are grouped into functional categories such as bone and mineral metabolism, except that oral-only drugs are exempted from inclusion until 2025.
Market acceptance of Renazorb or any other approved product depends on a number of factors, including: ● the availability of adequate coverage and reimbursement by and the availability of discounts, rebates and price concessions from third party payors, pharmacy benefit managers, or PBMs, and governmental authorities; ● the safety and efficacy of the product, as demonstrated in clinical trials and in the post-marketing setting; ● the prevalence and complications of the disease treated by the product; ● the clinical indications for which the product is approved and the product label approved by regulatory authorities, including any warnings or limitations that may be required on the label as a consequence of potential safety risks associated with the product; ● the countries in which marketing approvals are obtained; ● the claims we and our collaborators are able to make regarding the safety and efficacy of the product; ● the success of our physician and patient communications and education programs; ● acceptance by physicians and patients of the product as a safe and effective treatment and the willingness of the target patient population to try new therapies and of physicians to prescribe new therapies; ● the cost, safety and efficacy of the product in relation to alternative treatments; ● the timing of receipt of marketing approvals and product launch relative to competing products and potential generic entrants; ● relative convenience and ease of administration; ● the frequency and severity of adverse side effects; ● favorable or adverse publicity about our products or favorable or adverse publicity about competing products; and ● the effectiveness of our and our collaborators’ sales, marketing and distribution efforts.
Market acceptance of Oxylanthanum Carbonate or any other approved product depends on a number of factors, including: ● the availability of adequate coverage and reimbursement by and the availability of discounts, rebates, and price concessions from third party payors, pharmacy benefit managers, or PBMs, and governmental authorities; ● the safety and efficacy of the product, as demonstrated in clinical trials and in the post-marketing setting; ● the prevalence and complications of the disease treated by the product; ● the clinical indications for which the product is approved and the product label approved by regulatory authorities, including any warnings or limitations that may be required on the label as a consequence of potential safety risks associated with the product; -25- ● the countries in which marketing approvals are obtained; ● the claims we and our collaborators are able to make regarding the safety and efficacy of the product; ● the success of our physician and patient communications and education programs; ● acceptance by physicians and patients of the product as a safe and effective treatment and the willingness of the target patient population to try new therapies and of physicians to prescribe new therapies; ● the cost, safety and efficacy of the product in relation to alternative treatments; ● the timing of receipt of marketing approvals and product launch relative to competing products and potential generic entrants; ● relative convenience and ease of administration; ● the frequency and severity of adverse side effects; ● favorable or adverse publicity about our products or favorable or adverse publicity about competing products; and ● the effectiveness of our and our collaborators’ sales, marketing, and distribution efforts.
Additionally, the Renazorb Purchase Agreement provides that until the earlier of (i) 36 months from the first date on which our stock trades on a public market, or (ii) the date upon which we attain a public market capitalization of $50,000,000 or greater, we are required to issue additional shares of our common stock as may be needed to ensure Spectrum maintains a 4% ownership of our issued and outstanding common stock on a fully-diluted basis.
Additionally, the Spectrum Agreement provides that until the earlier of (i) 36 months from the first date on which our stock trades on a public market, or (ii) the date upon which we attain a public market capitalization of $50,000,000 or greater, we are required to issue additional shares of our common stock as may be needed to ensure Spectrum maintains a 4% ownership of our issued and outstanding common stock on a fully-diluted basis.
A product is not eligible for ANDA approval if the FDA determines that it is not bioequivalent to the reference listed drug, if it is intended for a different use, or if it is not subject to, and requires, an approved Suitability Petition. -22- Orange Book Listing In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product.
A product is not eligible for ANDA approval if the FDA determines that it is not bioequivalent to the reference listed drug, if it is intended for a different use, or if it is not subject to, and requires, an approved Suitability Petition. -21- Orange Book Listing In seeking approval for a drug through an NDA, including a 505(b)(2) NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries. -24- Dialysis Organizations Protocols Dialysis organizations have their own formularies that list primary or preferred therapeutic options based on contracting status with drug manufacturers.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries. -23- Dialysis Organizations Protocols Dialysis organizations have their own formularies that list primary or preferred therapeutic options based on contracting status with drug manufacturers.
There are risks involved with building our own sales and marketing capabilities, including the following: ● potential inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; ● potential lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines, and ● costs and expenses associated with maintaining our own sales and marketing organization. -26- If we are unable to build our own sales and marketing capabilities, we will not be successful in commercializing Renazorb, UNI-494, and any other product candidate that may be approved.
There are risks involved with building our own sales and marketing capabilities, including the following: ● potential inability to recruit, train and retain adequate numbers of effective sales and marketing personnel; ● potential lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines, and ● costs and expenses associated with maintaining our own sales and marketing organization. -26- If we are unable to build our own sales and marketing capabilities, we will not be successful in commercializing Oxylanthanum Carbonate, UNI-494, and any other product candidate that may be approved.
Fully-diluted shares of common stock for purposes of the Renazorb Purchase Agreement assumes conversion of any security convertible into or exchangeable or exercisable for common stock or any combination thereof, including any common stock reserved for issuance under a stock option plan, restricted stock plan, or other equity incentive plan approved by the Board of Directors of the Company immediately following the issuance of additional shares of our common stock (but prior to the issuance of any additional shares of common stock to Spectrum).
Fully-diluted shares of common stock for purposes of the Spectrum Agreement assumes conversion of any security convertible into or exchangeable or exercisable for common stock or any combination thereof, including any common stock reserved for issuance under a stock option plan, restricted stock plan, or other equity incentive plan approved by the Board of Directors of the Company immediately following the issuance of additional shares of our common stock (but prior to the issuance of any additional shares of common stock to Spectrum).
Our payment obligations to Spectrum will expire on the twentieth (20 th ) anniversary of the Closing Date of the Renazorb Purchase Agreement. -2- Disease overview: Hyperphosphatemia Chronic kidney disease (CKD) is the gradual loss of kidney function that can get worse over time leading to lasting damage. The stages of chronic kidney disease are shown below in table 1.
Our payment obligations to Spectrum will expire on the twentieth (20 th ) anniversary of the Closing Date of the Spectrum Agreement. -2- Disease overview: Hyperphosphatemia Chronic kidney disease (CKD) is the gradual loss of kidney function that can get worse over time leading to lasting damage. The stages of chronic kidney disease are shown below in Table 1.
The LS mean change from Baseline for UNI-014 (-320.4 mg/day) was similar to the LS mean change from Baseline for Fosrenol (-324.0 mg/day). The 90% CI for the LS mean was (-45.88, 53.16), which is well within the acceptance range of (-64.80, 64,80) ( Table 3 ). It was concluded that UNI-014 was bioequivalent to Fosrenol.
The LS mean change from Baseline for Oxylanthanum Carbonate (-320.4 mg/day) was similar to the LS mean change from Baseline for Fosrenol (-324.0 mg/day). The 90% CI for the LS mean was (-45.88, 53.16), which is well within the acceptance range of (-64.80, 64,80) ( Table 3 ). It was concluded that UNI-014 was bioequivalent to Fosrenol.
We are also required to pay Spectrum 40% of all of our sublicense income for any sublicense granted to certain sublicensees during the first 12 months after the Closing Date (as that term is defined in the Renazorb Purchase Agreement) and 20% of all other sublicense income.
We are also required to pay Spectrum 40% of all of our sublicense income for any sublicense granted to certain sublicensees during the first 12 months after the Closing Date (as that term is defined in the Spectrum Agreement) and 20% of all other sublicense income.
Table 1: adapted from The Renal Association (https://renal.org/information-resources/the-uk-eckd-guide/ckd-stages/) eGFR = estimated glomerular filtration rate (a measure of kidney function) Complications of CKD include electrolyte imbalances, fluid build-up, anemia, bone disease, and heart disease. Hyperphosphatemia is an electrolyte disorder in which untreated elevated phosphorus levels in the blood lead to cardiovascular complications and vascular calcification.
Table 1 Chronic Kidney Disease Stages Table 1: adapted from The Renal Association (https://renal.org/information-resources/the-uk-eckd-guide/ckd-stages/) eGFR = estimated glomerular filtration rate (a measure of kidney function) Complications of CKD include electrolyte imbalances, fluid build-up, anemia, bone disease, and heart disease. Hyperphosphatemia is an electrolyte disorder in which elevated phosphorus levels in the blood lead to cardiovascular complications and vascular calcification (hardening).
Although there are several details that need further clarification, including precise timing related to receiving codes to allow for reimbursement under TDAPA, which are typically assigned on a quarterly basis, the rule provides some support for our assumption that all hyperphosphatemia drugs, including Renazorb, will be included in the ESRD PPS bundle and will be eligible for separate payment initially under TDAPA.
Although there are several details that need further clarification, including precise timing related to receiving codes to allow for reimbursement under TDAPA, which are typically assigned on a quarterly basis, the rule provides some support for our assumption that all hyperphosphatemia drugs, including Oxylanthanum Carbonate, will be included in the ESRD PPS bundle and will be eligible for separate payment initially under TDAPA.
Furthermore, if we are unable to maintain our arrangements with third parties with respect to sales and marketing, if we are unsuccessful in entering into additional arrangements with third parties to sell and market our products or we are unable to do so on terms that are favorable to us, or if such third parties are unable to carry out their obligations under such arrangements, it will be difficult to successfully commercialize our product and product candidates, including Renazorb, if approved.
Furthermore, if we are unable to maintain our arrangements with third parties with respect to sales and marketing, if we are unsuccessful in entering into additional arrangements with third parties to sell and market our products or we are unable to do so on terms that are favorable to us, or if such third parties are unable to carry out their obligations under such arrangements, it will be difficult to successfully commercialize our product and product candidates, including Oxylanthanum Carbonate, if approved.
Additionally, applying for and obtaining reimbursement under the TDAPA may take an undetermined amount of time following approval, which will affect adoption, uptake and product revenue for Renazorb during that time, and if there are updates to the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected.
Additionally, applying for and obtaining reimbursement under the TDAPA may take an undetermined amount of time following approval, which will affect adoption, uptake, and product revenue for Oxylanthanum Carbonate during that time, and if there are updates to the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected.
Further, if Renazorb is approved in the United States and included in the fixed reimbursement model for a bundle of dialysis services, or the bundle, we would be required to enter into contracts to supply Renazorb to specific dialysis providers, instead of through distributors. -27- The dialysis market is unique and is dominated by two providers: DaVita and Fresenius, which account for a vast majority of the dialysis population in the United States.
Further, if Oxylanthanum Carbonate is approved in the United States and included in the fixed reimbursement model for a bundle of dialysis services, or the bundle, we would be required to enter into contracts to supply Oxylanthanum Carbonate to specific dialysis providers, instead of through distributors. -27- The dialysis market is unique and is dominated by two providers: DaVita and Fresenius, which account for a vast majority of the dialysis population in the United States.
For those that obtain dialysis through commercial insurance during the 30-month coordination period or through Medicaid prior to Medicare becoming primary payer after 90 days, patients may access Renazorb through contracts we negotiate with third party payors for reimbursement of Renazorb, which would be subject to the risks and uncertainties described above.
For those that obtain dialysis through commercial insurance during the 30-month coordination period or through Medicaid prior to Medicare becoming primary payer after 90 days, patients may access Oxylanthanum Carbonate through contracts we negotiate with third party payors for reimbursement of Oxylanthanum Carbonate, which would be subject to the risks and uncertainties described above.
Governmental authorities, third party payors, and PBMs decide which drugs they will cover, as well as establish formularies or implement other mechanisms to manage utilization of products and determine reimbursement levels. We cannot be sure that coverage or adequate reimbursement will be available for Renazorb, UNI-494, or any of our potential future products.
Governmental authorities, third party payors, and PBMs decide which drugs they will cover, as well as establish formularies or implement other mechanisms to manage utilization of products and determine reimbursement levels. We cannot be sure that coverage or adequate reimbursement will be available for Oxylanthanum Carbonate, UNI-494, or any of our potential future products.
We believe, however, that our management team’s broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing these assets into our company. -1- Pipeline Our proprietary pipeline is comprised of our two product candidates – Renazorb and UNI 494 – which are described below.
We believe, however, that our management team’s broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing these assets into our company. -1- Pipeline Our proprietary pipeline is comprised of our two product candidates – Oxylanthanum Carbonate and UNI 494 – which are described below.
As we grow the company and build our team, we intend to focus on identifying medical conditions within and outside of kidney disease. Our current development programs are focused on two novel therapies: Renazorb™, for treatment of hyperphosphatemia in patients with chronic kidney disease on dialysis, and UNI 494, for treatment of acute kidney injury (AKI).
As we grow the company and build our team, we intend to focus on identifying medical conditions within and outside of kidney disease. Our current development programs are focused on two novel therapies: Oxylanthanum Carbonate, for treatment of hyperphosphatemia in patients with chronic kidney disease on dialysis, and UNI 494, for treatment of acute kidney injury (AKI).
Our ability to generate product revenue and achieve profitability depends on the overall success of Renazorb , UNI-494, and any current or future product candidates, including those that may be in-licensed or acquired, which depends on several factors, including: ● obtaining adequate or favorable pricing and reimbursement from private and governmental payors for UNI-494, and any other product or product candidate, including those that may be in-licensed or acquired; ● obtaining and maintaining market acceptance of Renazorb, UNI-494, and any other product candidate, including those that may be in-licensed or acquired; ● the size of any market in which Renazorb, UNI-494, and any other product or product candidate, including those that may be in-licensed or acquired, receives approval and obtaining adequate market share in those markets; ● the timing and scope of marketing approvals for Renazorb, UNI-494, and any other product candidate, if approved, including those that may be in-licensed or acquired; ● actual or perceived advantages or disadvantages of our products or product candidates as compared to alternative treatments, including their respective safety, tolerability and efficacy profiles, the potential convenience and ease of administration and cost; ● maintaining an acceptable safety and tolerability profile of our approved products, including the frequency and severity of any side effects; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies, based, in part, on their perception of our clinical trial data and/or the actual or perceived safety, tolerability and efficacy profile; ● establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate supplies of products that are compliant with good manufacturing practices, or GMPs, to support the clinical development and the market demand for Renazorb, UNI-494, and any other product and product candidate, including those that may be in-licensed or acquired; ● current and future restrictions or limitations on our approved or future indications and patient populations or other adverse regulatory actions or in the event that the FDA requires Risk Evaluation and Mitigation Strategies, or REMS, or risk management plans that use restrictive risk minimization strategies; ● the effectiveness of our sales, marketing, manufacturing and distribution strategies and operations; ● competing effectively with any products for the same or similar indications as our products; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents and trade secrets; and ● the impact of the COVID-19 pandemic on the above factors, including the disproportionate impact of the COVID-19 pandemic on CKD patients, the adverse impact on the phosphate binder market in which we compete, and the limitation of our sales professionals to meet in person with healthcare professionals as the result of travel restrictions or limitations on access for non-patients. -25- Risks Related to Commercialization Our business is substantially dependent on the commercial success of Renazorb, if approved.
Our ability to generate product revenue and achieve profitability depends on the overall success of Oxylanthanum Carbonate, UNI-494, and any current or future product candidates, including those that may be in-licensed or acquired, which depends on several factors, including: ● obtaining adequate or favorable pricing and reimbursement from private and governmental payors for UNI-494, and any other product or product candidate, including those that may be in-licensed or acquired; ● obtaining and maintaining market acceptance of Oxylanthanum Carbonate, UNI-494, and any other product candidate, including those that may be in-licensed or acquired; ● the size of any market in which Oxylanthanum Carbonate, UNI-494, and any other product or product candidate, including those that may be in-licensed or acquired, receives approval and obtaining adequate market share in those markets; ● the timing and scope of marketing approvals for Oxylanthanum Carbonate, UNI-494, and any other product candidate, if approved, including those that may be in-licensed or acquired; ● actual or perceived advantages or disadvantages of our products or product candidates as compared to alternative treatments, including their respective safety, tolerability and efficacy profiles, the potential convenience and ease of administration and cost; ● maintaining an acceptable safety and tolerability profile of our approved products, including the frequency and severity of any side effects; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies, based, in part, on their perception of our clinical trial data and/or the actual or perceived safety, tolerability and efficacy profile; -24- ● establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate supplies of products that are compliant with good manufacturing practices, or GMPs, to support the clinical development and the market demand for Oxylanthanum Carbonate, UNI-494, and any other product and product candidate, including those that may be in-licensed or acquired; ● current and future restrictions or limitations on our approved or future indications and patient populations or other adverse regulatory actions or in the event that the FDA requires Risk Evaluation and Mitigation Strategies, or REMS, or risk management plans that use restrictive risk minimization strategies; ● the effectiveness of our sales, marketing, manufacturing and distribution strategies and operations; ● competing effectively with any products for the same or similar indications as our products; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents and trade secrets; and ● the impact of the COVID-19 pandemic on the above factors, including the disproportionate impact of the COVID-19 pandemic on CKD patients, the adverse impact on the phosphate binder market in which we compete, and the limitation of our sales professionals to meet in person with healthcare professionals as the result of travel restrictions or limitations on access for non-patients.
Unicycive is not obligated to make any payments to the vendor until FDA approval of the product is obtained and commercial revenue is generated. Commercial Strategy for Renazorb The worldwide market for hyperphosphatemia agents is estimated at ~$2.5 billion and is growing at a 5.3% CAGR (Fortune Business Insights, Hyperphosphatemia Treatment Market, 2021-2028 ).
Unicycive is not obligated to make any payments to the vendor until FDA approval of the product is obtained and commercial revenue is generated. Commercial Strategy for Oxylanthanum Carbonate The worldwide market for hyperphosphatemia agents is estimated at ~$2.5 billion and is growing at a 5.3% CAGR (Fortune Business Insights, Hyperphosphatemia Treatment Market, 2021-2028 ).
In order to market Renazorb and any other approved product, we intend to invest in sales and marketing, which will require substantial effort and significant management and financial resources. Additionally, training a sales force to successfully sell and market a new commercial product is expensive and time-consuming and could delay any commercial launch of such product candidate.
In order to market Oxylanthanum Carbonate and any other approved product, we intend to invest in sales and marketing, which will require substantial effort and significant management and financial resources. Additionally, training a sales force to successfully sell and market a new commercial product is expensive and time-consuming and could delay any commercial launch of such product candidate.
If Renazorb is approved for marketing in the United States, under the Hatch-Waxman Act we may be eligible for up to five years patent term extension for a granted United States patent containing claims covering Renazorb. Similar term extensions may be available in Europe, Japan, Australia, and certain other foreign jurisdictions.
If Oxylanthanum Carbonate is approved for marketing in the United States, under the Hatch-Waxman Act we may be eligible for up to five years patent term extension for a granted United States patent containing claims covering Oxylanthanum Carbonate. Similar term extensions may be available in Europe, Japan, Australia, and certain other foreign jurisdictions.
The primary endpoint of the study was the evaluation of safety, and the secondary endpoint was the phosphate binding capacity of Renazorb as judged by the level of phosphorus in feces and urine. We believe the study indicated that Renazorb was minimally absorbed to the systemic circulation and was well-tolerated at doses up to 6000 mg/day.
The primary endpoint of the study was the evaluation of safety, and the secondary endpoint was the phosphate binding capacity of Oxylanthanum Carbonate as judged by the level of phosphorus in feces and urine. We believe the study indicated that Oxylanthanum Carbonate was minimally absorbed to the systemic circulation and was well-tolerated at doses up to 6000 mg/day.
Four sequential dose cohorts of 8 subjects each (6 actives and 2 placebos) received Renazorb at 1500, 3000, 4500, or 6000 mg/day, taken orally in 3 divided doses within 15 minutes after meals, for five consecutive days.
Four sequential dose cohorts of 8 subjects each (6 actives and 2 placebos) received Oxylanthanum Carbonate at 1500, 3000, 4500, or 6000 mg/day, taken orally in 3 divided doses within 15 minutes after meals, for five consecutive days.
EU member states may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market.
EU member states may approve a specific price for a product or they may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market.
Renazorb will compete in the hyperphosphatemia market in the United States with other FDA-approved phosphate binders such as Renagel® (sevelamer hydrochloride) and Renvela® (sevelamer carbonate), both marketed by Sanofi, PhosLo® and Phoslyra® (calcium acetate), marketed by Fresenius Medical Care North America, Fosrenol® (lanthanum carbonate), marketed by Shire Pharmaceuticals Group plc, Velphoro® (sucroferric oxyhydroxide), marketed by Fresenius Medical Care North America, and Auryxia (ferric citrate), marketed by Akebia Therapeutics, as well as over-the-counter calcium carbonate products such as TUMS® and metal-based options such as aluminum, lanthanum and magnesium.
Oxylanthanum Carbonate will compete in the hyperphosphatemia market in the United States with other FDA-approved phosphate binders such as Renagel® (sevelamer hydrochloride) and Renvela® (sevelamer carbonate), both marketed by Sanofi, PhosLo® and Phoslyra® (calcium acetate), marketed by Fresenius Medical Care North America, Fosrenol® (lanthanum carbonate), marketed by Shire Pharmaceuticals Group plc, Velphoro® (sucroferric oxyhydroxide), marketed by Fresenius Medical Care North America, and Auryxia (ferric citrate), marketed by Akebia Therapeutics, Xphozah® (tenapanor), marketed by Ardelyx, as well as over-the-counter calcium carbonate products such as TUMS® and metal-based options such as aluminum, lanthanum and magnesium.
According to data from the Dialysis Outcomes and Practice Patterns Study (DOPPS) in 2021, 82% of U.S. dialysis patients were prescribed phosphate binders, which equates to approximately 450,000 patients. -4- Unmet Medical Need in the Management of Hyperphosphatemia The mechanism of action and what we believe to be the advantages and disadvantages of various phosphate binders are shown below.
According to data from the Dialysis Outcomes and Practice Patterns Study (DOPPS) in 2021, 82% of U.S. dialysis patients were prescribed phosphate binders, which equates to approximately 450,000 patients. -4- Unmet Medical Need in the Management of Hyperphosphatemia The brief descriptions of the mechanism of action and what we believe to be the advantages and disadvantages of various phosphate binders are shown below in Table 2 .
(“Spectrum”), pursuant to which we purchased certain assets from Spectrum, including Spectrum’s right, title, interest in and intellectual property related to Renazorb RZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known as SPI 014 (“SPI” and together with Renalan, the “Compounds”).
(“Spectrum”), pursuant to which we purchased certain assets from Spectrum, including Spectrum’s right, title, interest in and intellectual property related to Oxylanthanum Carbonate RZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known as SPI 014 (“SPI” and together with Renalan, the “Compounds”).
Our, or our partners’, failure to obtain or maintain adequate coverage, pricing and reimbursement for Renazorb, if approved, or any other future approved products, could have a material adverse effect on our or our collaboration partners’ ability to sell such approved products profitably and otherwise have a material adverse impact on our business.
Our, or our partners’, failure to obtain or maintain adequate coverage, pricing and reimbursement for Oxylanthanum Carbonate, if approved, or any other future approved products, could have a material adverse effect on our or our collaboration partners’ ability to sell such approved products profitably and otherwise have a material adverse impact on our business.
If we are unsuccessful or delayed in entering into an agreement with a new partner, the launch of Renazorb following approval outside the United States may be delayed, which could have an adverse effect on our results of operations.
If we are unsuccessful or delayed in entering into an agreement with a new partner, the launch of Oxylanthanum Carbonate following approval outside the United States may be delayed, which could have an adverse effect on our results of operations.
With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of using and manufacturing the same. -17- Renazorb Patent Portfolio Our Renazorb patent portfolio includes one family of granted United States patents, with related applications pending, and an additional family of granted foreign patents, with related applications also pending.
With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our commercial products and methods of using and manufacturing the same. -16- Oxylanthanum Carbonate Patent Portfolio Our Oxylanthanum Carbonate patent portfolio includes one family of granted United States patents, with related applications pending, and an additional family of granted foreign patents, with related applications also pending.
According to the terms of the agreement, following Renazorb approval by the FDA, Unicycive will pay the vendor $2 million in the first calendar year when the net revenue reaches $10 million from sales of Renazorb and commercial supply of the product by the vendor (First Payment).
According to the terms of the agreement, following Oxylanthanum Carbonate approval by the FDA, Unicycive will pay the vendor $2 million in the first calendar year when the net revenue reaches $10 million from sales of Oxylanthanum Carbonate and commercial supply of the product by the vendor (First Payment).
Granted and pending claims offer various forms of protection for Renazorb including claims to compositions of matter, pharmaceutical compositions, specific forms (such as polymorphs of lanthanum dioxycarbonate), methods of making the composition of matter, and methods for treating elevated levels of phosphate in the blood using Renazorb.
Granted and pending claims offer various forms of protection for Oxylanthanum Carbonate including claims to compositions of matter, pharmaceutical compositions, specific forms (such as polymorphs of lanthanum dioxycarbonate), methods of making the composition of matter, and methods for treating elevated levels of phosphate in the blood using Oxylanthanum Carbonate.
If Renazorb, or any of our product candidates that is approved, is not accepted by the market to the extent that we expect or market acceptance decreases, we may not be able to generate significant product revenue and our business would be materially harmed.
If Oxylanthanum Carbonate, or any of our product candidates that is approved, is not accepted by the market to the extent that we expect or market acceptance decreases, we may not be able to generate significant product revenue and our business would be materially harmed.
Market acceptance and sales of any approved products, including Renazorb and UNI-494, depends significantly on the availability of adequate coverage and reimbursement from third party payors and may be affected by existing and future healthcare reform measures.
Market acceptance and sales of any approved products, including Oxylanthanum Carbonate and UNI-494, depends significantly on the availability of adequate coverage and reimbursement from third party payors and may be affected by existing and future healthcare reform measures.
We currently believe it is likely that Renazorb, if approved, will be reimbursed using the Transitional Drug Add-on Payment Adjustment, or TDAPA, followed by inclusion in the bundled reimbursement model for Medicare beneficiaries.
We currently believe it is likely that Oxylanthanum Carbonate, if approved, will be reimbursed using the Transitional Drug Add-on Payment Adjustment, or TDAPA, followed by inclusion in the bundled reimbursement model for Medicare beneficiaries.
Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the development and commercialization of Renazorb, and any other product or product candidate, including those that may be in-licensed or acquired.
Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the development and commercialization of Oxylanthanum Carbonate, and any other product or product candidate, including those that may be in-licensed or acquired.
Our ability to generate revenue depends on our ability to execute on our commercialization plans, and the size of the market for, and the level of market acceptance of, Renazorb and any other product or product candidate, including those that may be in-licensed or acquired.
Our ability to generate revenue depends on our ability to execute on our commercialization plans, and the size of the market for, and the level of market acceptance of, Oxylanthanum Carbonate and any other product or product candidate, including those that may be in-licensed or acquired.
The primary objective of the study was to demonstrate PD equivalence of orally administered Renazorb 1000 mg three-times daily (TID) to orally administered Fosrenol 1000 mg TID in healthy subjects, and the secondary objective was to compare the safety and tolerability of UNI-014 versus Fosrenol in healthy subjects.
The primary objective of the study was to demonstrate PD equivalence of orally administered Oxylanthanum Carbonate 1000 mg three-times daily (TID) to orally administered Fosrenol 1000 mg TID in healthy subjects, and the secondary objective was to compare the safety and tolerability of UNI-014 versus Fosrenol in healthy subjects.
Under the terms of the agreement, Lee’s Pharm will be responsible for development, registration filing and approval for Renazorb in the licensed territories. In addition, Lee’s Pharm will have sole responsibility for the importation of the drug product from Unicycive and for the costs of commercialization of Renazorb in the licensed territories.
Under the terms of the agreement, Lee’s Pharm will be responsible for development, registration filing and approval for Oxylanthanum Carbonate in the licensed territories. In addition, Lee’s Pharm will have sole responsibility for the importation of the drug product from Unicycive and for the costs of commercialization of Oxylanthanum Carbonate in the licensed territories.
(i.e., Europe, Japan, Canada, South America, and the Middle East.) U.S. opportunity for Renazorb Renazorb is a phosphate binder for the treatment of hyperphosphatemia in patients with CKD on dialysis and is intended to be administered as a tablet that will be swallowed whole at mealtimes.
(i.e., Europe, Japan, Canada, South America, and the Middle East.) -9- U.S. opportunity for Oxylanthanum Carbonate Oxylanthanum Carbonate is a phosphate binder for the treatment of hyperphosphatemia in patients with CKD on dialysis and is intended to be administered as a tablet that will be swallowed whole at mealtimes.
By virtue of its novel nanoparticle technology, Renazorb leverages the high phosphate binding potency of lanthanum in a palatable dose form that has the potential to substantially reduce the pill burden volume for patients.
By virtue of its novel nanoparticle technology, Oxylanthanum Carbonate leverages the high phosphate binding potency of lanthanum in a palatable dose form that has the potential to substantially reduce the pill burden volume for patients.
In February of 2023, we entered into an exclusive license agreement with Lotus Pharmaceutical for the development and commercialization of Renazorb in the Republic of Korea. Under the terms of the agreement, Lotus will be responsible for development, registration filing and approval of Renazorb in the Republic of Korea.
In February of 2023, we entered into an exclusive license agreement with Lotus Pharmaceutical for the development and commercialization of Oxylanthanum Carbonate in the Republic of Korea. Under the terms of the agreement, Lotus will be responsible for development, registration filing and approval of Oxylanthanum Carbonate in the Republic of Korea.
PD equivalence was to be claimed if the 90% confidence interval (CI) of the primary PD variable for UNI-014 was completely contained within the reference interval, which was defined as ±20% of the LS mean of the primary PD variable for lanthanum carbonate.
PD equivalence was to be claimed if the 90% confidence interval (CI) of the primary PD variable for Oxylanthanum Carbonate was completely contained within the reference interval, which was defined as ±20% of the LS mean of the primary PD variable for lanthanum carbonate.
Pursuant to the Renazorb Purchase Agreement, in consideration for the Compounds, we issued 313,663 shares of common stock to Spectrum.
Pursuant to the Spectrum Agreement, in consideration for the Compounds, we issued 313,663 shares of common stock to Spectrum.
Market Potential According to a 2017 article by Silver and Chertow, the current cost of care for AKI in the U.S. is estimated to be between $5.4 billion to $24 billion per year. In England, inpatient costs related to AKI are estimated to make up 1% of the total National Health Service budget.
In Acute Kidney Injury (AKI): According to a 2017 article by Silver and Chertow, the current cost of care for AKI in the U.S. is estimated to be between $5.4 billion to $24 billion per year. In England, inpatient costs related to AKI are estimated to make up 1% of the total National Health Service budget.
Renazorb and UNI 494 were initially developed by and licensed to us from Spectrum Pharmaceuticals (“Spectrum”) and Sphaera Pharmaceuticals, respectively. Spectrum conducted a Phase 1 clinical trial with Renazorb in 2012, prior to the grant of our license in 2018.
Oxylanthanum Carbonate and UNI 494 were initially developed by and licensed to us from Spectrum Pharmaceuticals (“Spectrum”) and Sphaera Pharma, respectively. Spectrum conducted a Phase 1 clinical trial with Oxylanthanum Carbonate in 2012, prior to the grant of our license in 2018.
The most relevant granted United States patents with claims covering Renazob are listed below, along with their projected expiration dates exclusive of any patent term extension.
The most relevant granted United States patents with claims covering Oxylanthanum Carbonate are listed below, along with their projected expiration dates exclusive of any patent term extension.
In addition, if Renazorb is approved outside of the United States, we plan to rely on a partner to obtain approval by reimbursement authorities outside the United States.
In addition, if Oxylanthanum Carbonate is approved outside of the United States, we plan to rely on a partner to obtain approval by reimbursement authorities outside the United States.
In addition, we have grown in part by acquisition, and our diligence may not have identified environmental impacts from historical operations at sites we have acquired in the past or may acquire in the future. Employees As of March 30, 2023, we had 12 full-time employees and no part-time employees. We are not a party to any collective bargaining agreements.
In addition, we have grown in part by acquisition, and our diligence may not have identified environmental impacts from historical operations at sites we have acquired in the past or may acquire in the future. Employees As of March 28, 2024, we had 14 full-time employees and no part-time employees. We are not a party to any collective bargaining agreements.
In addition, Lotus will have sole responsibility for the importation of the drug product from Unicycive and for the costs of commercialization of Renazorb in the Republic of Korea. We received an upfront payment of $750,000 and may receive up to $4.45 million in milestone payments and tiered royalties upon achievement of prespecified regulatory and commercial achievements.
In addition, Lotus will have sole responsibility for the importation of the drug product from Unicycive and for the costs of commercialization of Oxylanthanum Carbonate in the Republic of Korea. We received an upfront payment of $750,000 and may receive up to $3.7 million in milestone payments and tiered royalties upon achievement of prespecified regulatory and commercial achievements.
Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on their www.clinicaltrials.gov website. -19- Human clinical trials are typically conducted in three sequential phases, which may be distinct, or overlap or be combined: ● Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition, and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. ● Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance. ● Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Human clinical trials are typically conducted in three sequential phases, which may be distinct, or overlap or be combined: ● Phase 1 : The drug is initially introduced into healthy human subjects or patients with the target disease or condition, and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. ● Phase 2 : The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance. ● Phase 3 : The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Chronic kidney disease (CKD) is the gradual loss of kidney function that can get worse over time leading to lasting damage. Our initial focus is on developing drugs and getting them approved in the U.S., and then to partner with global biopharmaceutical companies in the rest of the world.
Chronic kidney disease (CKD) is the gradual loss of kidney (renal) function that can get worse over time leading to lasting damage and possibly Stage 5 or end-stage renal disease (ESRD). Our initial focus is on developing drugs and getting them approved in the U.S., and then to partner with global biopharmaceutical companies in the rest of the world.
Figure 2: Urine phosphate levels in rats following comparable dosing of Renazorb, Fosrenol, or Sevelamer In animal toxicology studies no unexpected toxicity was found and systemic absorption was extremely low, which is consistent with similar studies conducted with Fosrenol.
Figure 4 Urine Phosphate Levels in Rats Following Comparable Dosing of Oxylanthanum Carbonate, Fosrenol, or Sevelamer In animal toxicology studies with oxylanthanum carbonate no unexpected toxicity was found and systemic absorption of lanthanum was extremely low, which is consistent with similar studies conducted with Fosrenol.
We will continue to seek licensing partners for Renazorb in other territories outside the U.S.
We will continue to seek licensing partners for Oxylanthanum Carbonate in other territories outside the U.S.
Renazorb significantly reduced urine phosphate excretion and significantly increased fecal phosphate excretion at doses at and above 3000 mg/day.
Oxylanthanum Carbonate significantly reduced urine phosphate excretion and significantly increased fecal phosphate excretion at doses at and above 3000 mg/day.
Federal Trade Commission (“FTC”) and the U.S. Department of Justice (the “DOJ”) certain types of agreements entered into between brand and generic pharmaceutical companies related to the settlement of patent litigation or manufacture, marketing and sale of generic versions of branded drugs.
Department of Justice (the “DOJ”) certain types of agreements entered into between brand and generic pharmaceutical companies related to the settlement of patent litigation or manufacture, marketing and sale of generic versions of branded drugs.
AKI kills more than 300,000 patients per year in the U.S. and is caused by multiple etiologies. Our business model is to license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs.
More than 300,000 patients per year in the U.S. die due to AKI that has many causes. Our business model is to license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. There also are extensive DEA regulations applicable to controlled substances.
Post-Approval Requirements Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to drug listing and registration, recordkeeping, periodic reporting, product sampling and distribution, adverse event reporting, and advertising, marketing and promotion, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet.
Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. -20- Post-Approval Requirements Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to drug listing and registration, recordkeeping, periodic reporting, product sampling and distribution, adverse event reporting, and advertising, marketing and promotion, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet.
Anti-kickback laws, including the federal Anti-Kickback Statute, make it a criminal offense knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward referral of an individual for, or the purchase, order or recommendation of, any good or service reimbursable by, a federal health care program (including our products).
These include anti-kickback laws, false claims laws, sunshine laws, privacy laws and FDA regulation of advertising and promotion of pharmaceutical products. -29- Anti-kickback laws, including the federal Anti-Kickback Statute, make it a criminal offense knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward referral of an individual for, or the purchase, order or recommendation of, any good or service reimbursable by, a federal health care program (including our products).
Approximately 550,000 patients with end-stage renal disease (ESRD) are on dialysis and of those, approximately 450,000 take phosphate binders to control hyperphosphatemia. The number of patients with ESRD in the U.S. is increasing steadily and is projected to reach between 971,000 and 1,259,000 in 2030.
Approximately 550,000 patients (ESRD) are on dialysis and of those, approximately 450,000 patients (~80%) take phosphate binders to control hyperphosphatemia hyperphosphatemia (too much phosphorus in their blood). The number of patients with ESRD in the U.S. is increasing steadily and is projected to reach between 971,000 and 1,259,000 patients in 2030.
Clinical Trial Experience In September 2012 a Phase 1 single-center clinical trial evaluating Renazorb in 32 healthy volunteers was completed in the United States.
Clinical Trial Experience First-in-Human Phase 1 Study In September 2012 a Phase 1 single-center clinical trial evaluating Oxylanthanum Carbonate in 32 healthy volunteers was completed in the United States.
This means that physicians prescribe their medication of choice, usually based on clinical and patient factors. Utilization of calcium-based binders is discouraged by the most recent KDOQI/KDIGO guidelines due to mounting clinical evidence that excess calcium load from calcium-based phosphate binder is associated with hypercalcemia and cardiovascular calcification which has been associated with an increased risk of morbidity and mortality.
Utilization of calcium-based binders is discouraged by the most recent KDOQI/KDIGO guidelines due to mounting clinical evidence that excess calcium load from calcium-based phosphate binder is associated with hypercalcemia and cardiovascular calcification which has been associated with an increased risk of morbidity (disease) and mortality (death).
Smaller and other early-stage companies may also prove to be significant competitors. As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval, or discovering, developing and commercializing competitive products, before, or more effectively than, we do.
As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or marketing approval, or discovering, developing and commercializing competitive products, before, or more effectively than, we do.
If any dialysis organization does not add Renzorb, to the formulary, our business may be materially harmed. In addition, we may be unable to sell Renazorb to dialysis providers on a profitable basis if CMS significantly reduces the level of reimbursement for dialysis services and providers choose to use alternative therapies or look to re-negotiate their contracts with us.
In addition, we may be unable to sell Oxylanthanum Carbonate to dialysis providers on a profitable basis if CMS significantly reduces the level of reimbursement for dialysis services and providers choose to use alternative therapies or look to re-negotiate their contracts with us.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOn August 8, 2022, we received a written notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) notifying us that were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Rule”), as the minimum bid price of the Company’s common stock has been below $1.00 per share for 30 consecutive business days.
Biggest changeIn addition, on September 19, 2023, we received a Notice from Nasdaq indicating that the bid price for the Common Stock, for the last 30 consecutive business days for the last thirty consecutive business days, had closed below the minimum $1.00 per share and, as a result, we were not in compliance with the $1.00 minimum bid price requirement (the “Minimum Bid Price Requirement”) for the continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).
Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with development and expansion of a new business enterprise.
Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the development and expansion of a new business enterprise.
Because several competing companies and institutions have greater financial resources than us, they may be able to: (i) provide broader services and product lines, (ii) make greater investments in research and development and (iii) carry on larger research and development initiatives.
Because several competing companies and institutions have greater financial resources than us, they may be able to: (i) provide broader services and product lines, (ii) make greater investments in research and development and (iii) carry on larger research and development initiatives than us.
Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
Litigation may be necessary to defend against these claims. If we fail to defend any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
We may be at risk of securities class action litigation. In the past, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.
We may be at risk of securities class action litigation. We may be at risk of securities class action litigation. In the past, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.
Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, are: ● sale of our common stock by our stockholders, executives, and directors; ● volatility and limitations in trading volumes of our shares of common stock; ● our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our clinical trials, and other business activities; ● possible delays in the expected recognition of revenue due to lengthy and sometimes unpredictable sales timelines; ● the timing and success of introductions of new products by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; ● network outages or security breaches; ● our ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; ● commencement, enrollment or results of our clinical trials for our product candidates or any future clinical trials we may conduct; ● changes in the development status of our product candidates; ● any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our planned pre-clinical and clinical trials; ● any delay in our submission for studies or product approvals or adverse regulatory decisions, including failure to receive regulatory approval for our product candidates; ● unanticipated safety concerns related to the use of our product candidates; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of common stock by our stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● our inability to enter into new markets or develop new products; -56- ● reputational issues; ● competition from existing technologies and products or new technologies and products that may emerge; ● announcements of acquisitions, partnerships, collaborations, joint ventures, new products, capital commitments, or other events by us or our competitors; ● changes in general economic, political and market conditions in or any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● changes in valuations of similar companies or groups of companies; ● analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigations related to intellectual property, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, are: ● sale of our common stock by our stockholders, executives, and directors; ● volatility and limitations in trading volumes of our shares of common stock; ● our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our clinical trials, and other business activities; ● possible delays in the expected recognition of revenue due to lengthy and sometimes unpredictable sales timelines; ● the timing and success of introductions of new products by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; ● network outages or security breaches; ● our ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; ● commencement, enrollment or results of our clinical trials for our product candidates or any future clinical trials we may conduct; ● changes in the development status of our product candidates; ● any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our planned pre-clinical and clinical trials; ● any delay in our submission for studies or product approvals or adverse regulatory decisions, including failure to receive regulatory approval for our product candidates; ● unanticipated safety concerns related to the use of our product candidates; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of common stock by our stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● our inability to enter into new markets or develop new products; ● reputational issues; -58- ● competition from existing technologies and products or new technologies and products that may emerge; ● announcements of acquisitions, partnerships, collaborations, joint ventures, new products, capital commitments, or other events by us or our competitors; ● changes in general economic, political and market conditions in or any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● changes in valuations of similar companies or groups of companies; ● analyst research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigations related to intellectual property, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
Any such disagreement could result in one or more of the following, each of which could delay or prevent the development or commercialization of our current and future product candidates, and in turn prevent us from generating revenues: ● unwillingness on the part of a partner to pay us milestone payments or royalties we believe are due to us under a collaboration; ● uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into additional collaborations; ● unwillingness by the partner to cooperate in the development or manufacture of the product, including providing us with product data or materials; ● unwillingness on the part of a partner to keep us informed regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those activities; ● initiating of litigation or alternative dispute resolution options by either party to resolve the dispute; or ● attempts by either party to terminate the agreement.
Any such disagreement could result in one or more of the following, each of which could delay or prevent the development or commercialization of our current and future product candidates, and in turn prevent us from generating revenues: ● unwillingness on the part of a partner to pay us milestone payments or royalties we believe are due to us under a collaboration; ● uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into additional collaborations; -44- ● unwillingness by the partner to cooperate in the development or manufacture of the product, including providing us with product data or materials; ● unwillingness on the part of a partner to keep us informed regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those activities; ● initiating of litigation or alternative dispute resolution options by either party to resolve the dispute; or ● attempts by either party to terminate the agreement.
It is also possible that patients enrolled in clinical trials will experience adverse side effects that are not currently part of our product candidate’s profile. Adverse events involving our products may lead the FDA or other regulatory authorities to delay or deny clearance for our products or result in product recalls that could harm our reputation, business and financial results.
It is also possible that patients enrolled in clinical trials will experience adverse side effects that are not currently part of our product candidate’s profile. -39- Adverse events involving our products may lead the FDA or other regulatory authorities to delay or deny clearance for our products or result in product recalls that could harm our reputation, business and financial results.
In addition, the FDA and/or other regulatory agencies could take enforcement action for failing to report the recalls when they were conducted. -39- Even if our product candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
In addition, the FDA and/or other regulatory agencies could take enforcement action for failing to report the recalls when they were conducted. Even if our product candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
If we are unable to raise additional funds through equity or debt financings when needed, we may need to curtail or cease our operations. You will experience dilution, subordination of stockholder rights, preferences, and privileges, and decrease in market price of our common stock as a result of our private placement in March 2023 financing efforts.
If we are unable to raise additional funds through equity or debt financings when needed, we may need to curtail or cease our operations. You will experience dilution, subordination of stockholder rights, preferences, and privileges, and decrease in market price of our common stock as a result of our private placement financing efforts in March 2023 and March 2024.
In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations. If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and product could be significantly diminished.
In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations. -50- If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and product could be significantly diminished.
We may be required to expend significant capital and other resources to ensure ongoing compliance with applicable privacy and data security laws, to protect against security breaches and hackers or to alleviate problems caused by such breaches. We will need to grow the size of our organization in the future, and we may experience difficulties in managing this growth.
We may be required to expend significant capital and other resources to ensure ongoing compliance with applicable privacy and data security laws, to protect against security breaches and hackers or to alleviate problems caused by such breaches. -46- We will need to grow the size of our organization in the future, and we may experience difficulties in managing this growth.
Further, upon completion of this offering and in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. -48- Risks Related to Our Intellectual Property Our UNI 494 product candidate is subject to an exclusive license agreement.
Further, upon completion of this offering and in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. Risks Related to Our Intellectual Property Our UNI 494 product candidate is subject to an exclusive license agreement.
As a result of such failures, we could also become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, financial condition or divert financial and management resources from our core business. ITEM 1B.
As a result of such failures, we could also become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, financial condition or divert financial and management resources from our core business. -63- ITEM 1B.
We expect to rely on third parties, such as CROs, contract manufacturers of clinical supplies, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials and to conduct some aspects of our research and pre-clinical testing. These third parties may terminate their engagements with us at any time.
We expect to rely on third parties, such as CROs (contract research organizations), CMOs (contract manufacturers) of clinical supplies, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials and to conduct some aspects of our research and pre-clinical testing. These third parties may terminate their engagements with us at any time.
If other business affairs require our Chief Executive Officer and/or directors to devote more amounts of time to other affairs, including the business of Globavir, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to implement our plan of operation. Inadequate funding for the FDA, the U.S.
If other business affairs require our Chief Executive Officer and/or directors to devote more amounts of time to other affairs, including the business of Globavir, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to implement our plan of operation. -47- Inadequate funding for the FDA, the U.S.
Moreover, our manufacturers and suppliers may experience difficulties related to their overall businesses and financial stability, which could result in delays or interruptions of supply of our product candidates. -44- We may have conflicts with our partners that could delay or prevent the development or commercialization of our current and future product candidates.
Moreover, our manufacturers and suppliers may experience difficulties related to their overall businesses and financial stability, which could result in delays or interruptions of supply of our product candidates. We may have conflicts with our partners that could delay or prevent the development or commercialization of our current and future product candidates.
Further, if any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our product candidates or technology could be adversely affected. Others may file patent applications covering products and technologies that are similar, identical or competitive to ours or important to our business.
Further, if any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our product candidates or technology could be adversely affected. -48- Others may file patent applications covering products and technologies that are similar, identical or competitive to ours or important to our business.
Risks Related to our Financial Position and Need for Capital We have generated no revenue to date and our future profitability is uncertain. We were incorporated in August 2016 and have a limited operating history, and our business is subject to all of the risks inherent in the establishment of a new business enterprise.
Risks Related to our Financial Position and Need for Capital We have generated no product revenue to date and our future profitability is uncertain. We were incorporated in August 2016 and have a limited operating history, and our business is subject to all of the risks inherent in the establishment of a new business enterprise.
The competition for qualified personnel in the pharmaceutical field is intense and as a result, we may be unable to continue to attract and retain qualified personnel necessary for the development of our business. -47- Our Chief Executive Officer, Dr. Shalabh Gupta, is also the Chief Executive Officer of Globavir Biosciences, Inc.
The competition for qualified personnel in the pharmaceutical field is intense and as a result, we may be unable to continue to attract and retain qualified personnel necessary for the development of our business. Our Chief Executive Officer, Dr. Shalabh Gupta, is also the Chief Executive Officer of Globavir Biosciences, Inc.
Our anticipated future dependence upon others for the manufacture of our current and future product candidates or products may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.
Our anticipated future dependence upon others for the manufacture and supply of our current and future product candidates or products may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.
Our product candidates could face substantial delays or even fail to receive marketing approval for many reasons, including among others: ● The FDA may decide that additional CMC, nonclinical and clinical studies would be needed for the approval of Renazorb; ● the FDA may disagree with the design, implementation, or interpretation of data of our CMC, preclinical, or clinical studies; ● the FDA could determine that we cannot rely on specific regulatory approval pathway, e.g., Section 505(b)(2), for our current or future product candidates; and ● the FDA may determine that we have identified the wrong reference listed drug or drugs or that approval of our regulatory application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs.
Our product candidates could face substantial delays or even fail to receive marketing approval for many reasons, including among others: ● The FDA may decide that additional CMC, nonclinical and clinical studies would be needed for the approval of Oxylanthanum Carbonate; ● the FDA may disagree with the design, implementation, or interpretation of data of our CMC, preclinical, or clinical studies; ● the FDA could determine that we cannot rely on specific regulatory approval pathway, e.g., Section 505(b)(2), for our current or future product candidates; and ● the FDA may determine that we have identified the wrong reference listed drug or drugs or that approval of our regulatory application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs.
Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences. -55- Risks Related to Owning our Common Stock The price of our common stock may fluctuate substantially.
Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences. -57- Risks Related to Owning our Common Stock The price of our common stock may fluctuate substantially.
We may be adversely affected by the ongoing coronavirus pandemic. The outbreak of the novel coronavirus (“COVID-19”) has evolved into a global pandemic. The extent to which COVID-19 impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted.
We may be adversely affected by the coronavirus-type pandemic. The outbreak of the novel coronavirus (“COVID-19”) has evolved into a global pandemic. The extent to which COVID-19 impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: ● reliance on the third party for regulatory compliance and quality assurance; ● the possible breach of the manufacturing agreement by the third party, including the inability to supply sufficient quantities or to meet quality standards or timelines; and ● the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.
Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including: ● reliance on the third party for regulatory compliance and quality assurance; ● the possible breach of the manufacturing agreement by the third party, including the inability to supply sufficient quantities or to meet quality standards or timelines; and ● the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us.
Among the provisions of the ACA of greatest importance to the pharmaceutical and biotechnology industry are the following: ● an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; ● implementation of the federal physician payment transparency requirements, sometimes referred to as the “Physician Payments Sunshine Act”; ● a licensure framework for follow-on biologic products; ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; ● establishment of a Center for Medicare Innovation at the Centers for Medicare & Medicaid Services to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price; ● a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including our product candidates, that are inhaled, infused, instilled, implanted or injected; ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; -53- ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and ● expansion of the entities eligible for discounts under the Public Health program.
Among the provisions of the ACA of greatest importance to the pharmaceutical and biotechnology industry are the following: ● an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; ● implementation of the federal physician payment transparency requirements, sometimes referred to as the “Physician Payments Sunshine Act”; ● a licensure framework for follow-on biologic products; ● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; ● establishment of a Center for Medicare Innovation at the Centers for Medicare & Medicaid Services to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending; ● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price; ● a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for certain drugs and biologics, including our product candidates, that are inhaled, infused, instilled, implanted or injected; ● extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; ● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; ● a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; and ● expansion of the entities eligible for discounts under the Public Health program. -55- Some of the provisions of the ACA have yet to be implemented, and there have been legal and political challenges to certain aspects of the ACA.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future, except that i n March 2023,we agreed with certain investors to modify our dividend policy to state that we intend to pay dividends to all stockholders on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent (75%) of our annual net cash flow from operations following the approval of Renazorb by the FDA if obtained, and the commencement of commercial sales.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future, except that in March 2023,we agreed with certain investors to modify our dividend policy to state that we intend to pay dividends to all stockholders on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent (75%) of our annual net cash flow from operations following the approval of Oxylanthanum Carbonate by the FDA if obtained, and the commencement of commercial sales.
We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares, except we have agreed to pay cash dividends in the event Renazorb is approved by the FDA and commercial sales is commenced.
We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares, except we have agreed to pay cash dividends in the event Oxylanthanum Carbonate is approved by the FDA and commercial sales is commenced.
As of December 31, 2022, we had 12 full-time employees. We will need to grow the size of our organization in order to support our continued development and potential commercialization of our product candidates. As our development and commercialization plans and strategies continue to develop, our need for additional managerial, operational, manufacturing, sales, marketing, financial and other resources may increase.
As of December 31, 2023, we had 14 full-time employees. We will need to grow the size of our organization in order to support our continued development and potential commercialization of our product candidates. As our development and commercialization plans and strategies continue to develop, our need for additional managerial, operational, manufacturing, sales, marketing, financial and other resources may increase.
We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.2 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. -58- We may be at risk of securities class action litigation.
We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.2 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
As of December 31, 2021 and 2022, we had cash of $16.6 million and $0.5 million, respectively. On March 3, 2023, the Company signed a securities purchase agreement with certain healthcare-focused institutional investors that will provide up to $130 million in gross proceeds to Unicycive through a private placement that included initial upfront funding of $30 million.
As of December 31, 2022 and 2023, we had cash of $0.5 million and $9.7 million, respectively. On March 3, 2023, the Company signed a securities purchase agreement with certain healthcare-focused institutional investors that will provide up to $130 million in gross proceeds to Unicycive through a private placement that included initial upfront funding of $30 million.
We do not control these analysts. If securities analysts do not cover our common stock after the closing of this offering, the lack of research coverage may adversely affect the market price of our common stock.
If securities analysts do not cover our common stock after the closing of this offering, the lack of research coverage may adversely affect the market price of our common stock.
We expect our existing cash as of December 31, 2022 plus the funding received in March 2023 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of this Form 10-K.
We expect our existing cash as of December 31, 2023 plus the $50 million funding received in March 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date of filing of this Form 10-K.
The laws include: ● the federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs; ● federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, and which may apply to entities like us which provide coding and billing information to customers; ● HIPAA which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; ● the FDCA which among other things, strictly regulates drug manufacturing and product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; and ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts. -52- If our operations are found to be in violation of any of the laws described above or any governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations.
The laws include: ● the federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs; ● federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, and which may apply to entities like us which provide coding and billing information to customers; ● HIPAA which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; ● the FDCA which among other things, strictly regulates drug manufacturing and product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; and ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
If we fail to meet any of the continued listing standards of The Nasdaq Capital Market, our common stock could be delisted from The Nasdaq Capital Market.
Our common stock may be delisted from The Nasdaq Capital Market if we fail to comply with continued listing standards. If we fail to meet any of the continued listing standards of The Nasdaq Capital Market, our common stock could be delisted from The Nasdaq Capital Market.
For example, the Biden administration has indicated that a goal of its administration is to expand and support Medicaid and the ACA and to make high-quality healthcare accessible and affordable. The potential increase in patients covered by government funded insurance may impact our pricing.
For example, the Biden administration has indicated that a goal of its administration is to expand and support Medicaid and the ACA and to make high-quality healthcare accessible and affordable. The potential increase in patients covered by government funded insurance may impact our pricing. Further, it is possible that the Biden administration may further increase the scrutiny on drug pricing.
To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. -62- Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use.
The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.
In addition, later discovery of previously unknown problems with our products, manufacturers or manufacturing processes and facilities or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on such products, manufacturers or manufacturing processes or facilities; ● restrictions on the labeling, marketing, distribution or use of a product; ● requirements to conduct post-approval clinical trials, other studies or other post-approval commitments; ● warning or untitled letters; ● withdrawal or recall of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● fines, restitution or disgorgement of profits or revenue; -41- ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure; and ● injunctions or the imposition of civil or criminal penalties.
The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we do not comply with these restrictions, we may be subject to enforcement actions. -41- In addition, later discovery of previously unknown problems with our products, manufacturers or manufacturing processes and facilities or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on such products, manufacturers or manufacturing processes or facilities; ● restrictions on the labeling, marketing, distribution or use of a product; ● requirements to conduct post-approval clinical trials, other studies or other post-approval commitments; ● warning or untitled letters; ● withdrawal or recall of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● fines, restitution or disgorgement of profits or revenue; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure; and ● injunctions or the imposition of civil or criminal penalties.
In addition, disputes may arise regarding intellectual property subject to a license agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● if a third-party expresses interest in an area under a license that we are not pursuing, under the terms of certain of our license agreements, we may be required to sublicense rights in that area to a third party, and that sublicense could harm our business; and ● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us.
In addition, disputes may arise regarding intellectual property subject to a license agreement, including: ● the scope of rights granted under the license agreement and other interpretation-related issues; ● the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; ● our diligence obligations under the license agreement and what activities satisfy those obligations; ● if a third-party expresses interest in an area under a license that we are not pursuing, under the terms of certain of our license agreements, we may be required to sublicense rights in that area to a third party, and that sublicense could harm our business; and ● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us. -49- If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize our product candidates.
If one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility in the market and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair our ability to expand our business with existing customers and attract new customers. -57- Our common stock may be delisted from The Nasdaq Capital Market if we fail to comply with continued listing standards.
If one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility in the market and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair our ability to expand our business with existing customers and attract new customers.
If we do not prevail in enforcing our intellectual property rights in this type of litigation, we may be subject to: ● paying monetary damages related to the legal expenses of the third party; ● facing additional competition that may have a significant adverse effect on our product pricing, market share, business operations, financial condition, and the commercial viability of our product; and ● restructuring our company or delaying or terminating select business opportunities, including, but not limited to, research and development, clinical trial, and commercialization activities, due to a potential deterioration of our financial condition or market competitiveness.
If we do not prevail in enforcing our intellectual property rights in this type of litigation, we may be subject to: ● paying monetary damages related to the legal expenses of the third party; ● facing additional competition that may have a significant adverse effect on our product pricing, market share, business operations, financial condition, and the commercial viability of our product; and ● restructuring our company or delaying or terminating select business opportunities, including, but not limited to, research and development, clinical trial, and commercialization activities, due to a potential deterioration of our financial condition or market competitiveness. -51- A third party may also challenge the validity, enforceability or scope of the intellectual property rights that we license or own and the result of these challenges may narrow the scope or claims of or invalidate patents that are integral to our product candidates in the future.
Site initiation, participant recruitment and enrollment, participant dosing, availability and distribution of clinical trial materials, study monitoring and data analysis may be paused or delayed due to changes in hospital or university policies, federal, state or local regulations, prioritization of hospital resources toward pandemic efforts, or other reasons related to COVID-19. -42- The ultimate impact of COVID-19, or any other health epidemic, is highly uncertain and subject to change.
Site initiation, participant recruitment and enrollment, participant dosing, availability and distribution of clinical trial materials, study monitoring and data analysis may be paused or delayed due to changes in hospital or university policies, federal, state or local regulations, prioritization of hospital resources toward pandemic efforts, or other reasons related to COVID-19.
Our ability to commercialize our current and any future product candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health programs, private health insurers, integrated delivery networks and other third-party payors.
Adverse pricing limitations may hinder our ability to commercialize and generate revenue from our product candidates, even if our product candidates obtain marketing approval. -40- Our ability to commercialize our current and any future product candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health programs, private health insurers, integrated delivery networks and other third-party payors.
Further, it is possible that the Biden administration may further increase the scrutiny on drug pricing. -54- In addition, given recent federal and state government initiatives directed at lowering the total cost of healthcare, the Biden administration, Congress and state legislatures will likely continue to focus on healthcare reform, the cost of prescription drugs and biologics and the reform of the Medicare and Medicaid programs.
In addition, given recent federal and state government initiatives directed at lowering the total cost of healthcare, the Biden administration, Congress and state legislatures will likely continue to focus on healthcare reform, the cost of prescription drugs and biologics and the reform of the Medicare and Medicaid programs.
Furthermore, regulatory authorities’ assessment of the data and results required to demonstrate safety and efficacy can change over time and can be affected by many factors, such as the emergence of new information, including on other products, changing policies and agency funding, staffing and leadership.
It is also possible that other legislative proposals having similar effects will be adopted. -56- Furthermore, regulatory authorities’ assessment of the data and results required to demonstrate safety and efficacy can change over time and can be affected by many factors, such as the emergence of new information, including on other products, changing policies and agency funding, staffing and leadership.
Even though an adverse event may not be the result of the failure of our product candidate, the FDA or other regulatory authority could delay or halt a clinical trial for an indefinite period of time while an adverse event is reviewed, and likely would do so in the event of multiple such events. -38- Any delay or termination of our current or future clinical trials as a result of the risks summarized above, including delays in obtaining or maintaining required approvals from the FDA or other regulatory authorities, delays in patient enrollment, the failure of patients to continue to participate in a clinical trial, and delays or termination of clinical trials as a result of protocol modifications or adverse events during the trials, may cause an increase in costs and delays in the filing of any product submissions with the FDA or other regulatory authorities, delay the approval and commercialization of our products or result in the failure of the clinical trial, which could adversely affect our business, operating results and prospects.
Any delay or termination of our current or future clinical trials as a result of the risks summarized above, including delays in obtaining or maintaining required approvals from the FDA or other regulatory authorities, delays in patient enrollment, the failure of patients to continue to participate in a clinical trial, and delays or termination of clinical trials as a result of protocol modifications or adverse events during the trials, may cause an increase in costs and delays in the filing of any product submissions with the FDA or other regulatory authorities, delay the approval and commercialization of our products or result in the failure of the clinical trial, which could adversely affect our business, operating results and prospects.
For example: ● others may be able to make compounds that are similar to our product candidates, but that are not covered by the claims of our licensed patents; ● any patents that we obtain from licensing or otherwise may not provide us with any competitive advantages; ● any granted patents that we rely upon may be held invalid or unenforceable as a result of legal challenges by third parties; and ● the patents of others may have an adverse effect on our business. -49- If we fail to comply with our obligations in the agreements under which we may license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose rights that are important to our business.
For example: ● others may be able to make compounds that are similar to our product candidates, but that are not covered by the claims of our licensed patents; ● any patents that we obtain from licensing or otherwise may not provide us with any competitive advantages; ● any granted patents that we rely upon may be held invalid or unenforceable as a result of legal challenges by third parties; and ● the patents of others may have an adverse effect on our business.
If securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline. The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors.
The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors. We do not control these analysts.
In addition, delisting of our common stock could depress our stock price, substantially limit liquidity of our common stock and materially adversely affect our ability to raise capital on terms acceptable to us, or at all. Finally, delisting of our common stock could result in our common stock becoming a “penny stock” under the Exchange Act.
In addition, delisting of our common stock could depress our stock price, substantially limit liquidity of our common stock and materially adversely affect our ability to raise capital on terms acceptable to us, or at all.
The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. -50- If we are sued for patent infringement, we would need to demonstrate that our product candidates or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this.
If we are sued for patent infringement, we would need to demonstrate that our product candidates or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this. Proving invalidity is difficult.
A pharmaceutical manufacturer might elect not to seek approval for or market products in foreign jurisdictions in order to minimize the risk of re-importation, which could also reduce the revenue generated from product sales. It is also possible that other legislative proposals having similar effects will be adopted.
A pharmaceutical manufacturer might elect not to seek approval for or market products in foreign jurisdictions in order to minimize the risk of re-importation, which could also reduce the revenue generated from product sales.
Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. -36- Any inability to successfully complete pre-clinical and clinical development could result in additional costs to us or impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties.
We cannot assure you that we will ever obtain any marketing approvals in any jurisdiction. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations or changes in regulatory review for each submitted product application may cause delays in the approval or rejection of an application.
Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations or changes in regulatory review for each submitted product application may cause delays in the approval or rejection of an application.
Alternatively, if a court were to find our choice of forum provisions contained in our Amended and Restated Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. -60- Failure to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our common stock.
Alternatively, if a court were to find our choice of forum provisions contained in our Amended and Restated Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.
Our net loss for the years ended December 31, 2021 and 2022 was $10.0 million and $18.1 million, and our accumulated deficit as of December 31, 2022 was $34.0 million.
Our net loss for the years ended December 31, 2022 and 2023 was $18.1 million and $30.5 million, and our accumulated deficit as of December 31, 2023 was $64.5 million.
We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, available at www.clinicaltrials.gov, within certain timeframes.
We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, available at www.clinicaltrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
Failure to do so can result in fines, adverse publicity and civil and criminal sanctions. -43- Upon commercialization of our products, we may be dependent on third parties to market, distribute and sell our products. Our ability to receive revenues may be dependent upon the sales and marketing efforts of any future co-marketing partners and third-party distributors.
Upon commercialization of our products, we may be dependent on third parties to market, distribute and sell our products. Our ability to receive revenues may be dependent upon the sales and marketing efforts of any future co-marketing partners and third-party distributors.
For example, in order to commence clinical trials of our product candidates in the United States, we must file an IND and obtain FDA agreement to proceed. The FDA may place our development program on clinical hold and require further pre-clinical testing prior to allowing our clinical trials to proceed.
For example, in order to commence clinical trials of our product candidates in the United States, we must file an IND and obtain FDA agreement to proceed.
In connection with the preparation of our financial statements for the years ended December 31, 2021 and 2022, we concluded that there were material weaknesses in our internal control over financial reporting.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports in a timely manner. In connection with the preparation of our financial statements for the years ended December 31, 2022 and 2023, we concluded that there were material weaknesses in our internal control over financial reporting.
If coverage and reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval. -40- There may be significant delays in obtaining coverage and adequate reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA or similar regulatory authorities outside the United States.
There may be significant delays in obtaining coverage and adequate reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA or similar regulatory authorities outside the United States.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for any product candidates or products that we may develop; ● termination of clinical trial sites or entire clinical trial programs; ● injury to our reputation and significant negative media attention; -45- ● withdrawal of clinical trial participants; ● significant costs to defend the related litigation; ● substantial monetary awards to trial subjects or patients; ● loss of revenue; ● diversion of management and scientific resources from our business operations; and ● the inability to commercialize any products that we may develop.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for any product candidates or products that we may develop; ● termination of clinical trial sites or entire clinical trial programs; ● injury to our reputation and significant negative media attention; ● withdrawal of clinical trial participants; ● significant costs to defend the related litigation; ● substantial monetary awards to trial subjects or patients; ● loss of revenue; ● diversion of management and scientific resources from our business operations; and ● the inability to commercialize any products that we may develop. -45- Prior to engaging in future clinical trials, we intend to obtain product liability insurance coverage at a level that we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks; however, we may be unable to obtain such coverage at a reasonable cost, if at all.
This might require the enrollment of additional subjects, which could result in the extension of the clinical trial and the FDA delaying clearance or approval of a product. Any such delay could have a material adverse effect on our business and results of operations.
This might require the enrollment of additional subjects, which could result in the extension of the clinical trial and the FDA delaying clearance or approval of a product.
Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or commercialization plans.
Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or commercialization plans. -59- If securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline.
Physical building penetration or any cyber-attacks could negatively affect our reputation, damage our network infrastructure and our ability to deploy our products and services, harm our relationship with customers and partners that are affected, and expose us to financial liability. -46- Additionally, there are a number of state, federal and international laws protecting the privacy and security of health information and personal data.
Physical building penetration or any cyber-attacks could negatively affect our reputation, damage our network infrastructure and our ability to deploy our products and services, harm our relationship with customers and partners that are affected, and expose us to financial liability.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert management’s attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly. Healthcare Reform in the United States.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert management’s attention from the operation of our business.
Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval.
Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. If coverage and reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.
Any loss of our cash or cash equivalents or any delay in our access thereto could, among other risks, adversely impact our ability to pay our operating expenses, result in breaches of our contractual obligations, or result in violations of federal or state wage and hour laws if we are unable to pay our employees on a timely basis. -34- Risks Related to Our Business The marketing approval process of the FDA is lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our current product candidates and future product candidates we intend to develop, our business will be substantially harmed.
Any loss of our cash or cash equivalents or any delay in our access thereto could, among other risks, adversely impact our ability to pay our operating expenses, result in breaches of our contractual obligations, or result in violations of federal or state wage and hour laws if we are unable to pay our employees on a timely basis.
There can be no assurance that the data generated from our clinical trials using modified protocols will be acceptable to the FDA or other regulatory authorities.
Any such delay could have a material adverse effect on our business and results of operations. -38- There can be no assurance that the data generated from our clinical trials using modified protocols will be acceptable to the FDA or other regulatory authorities.
Securing regulatory approval also requires the submission of information about the product manufacturing process, testing and release and inspection of manufacturing facilities and personnel by the relevant regulatory authority.
Securing regulatory approval requires the submission of extensive pre-clinical and clinical data and supporting information to the various regulatory authorities for each indication to establish the product candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing process, testing and release and inspection of manufacturing facilities and personnel by the relevant regulatory authority.
If these parties fail to meet our expectations or fulfill their obligations to us, we may fail to receive the expected benefits.
We do not control these partners, but we depend on them in ways that may be significant to us. If these parties fail to meet our expectations or fulfill their obligations to us, we may fail to receive the expected benefits.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. -36- The outcome of pre-clinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.
We do not have any manufacturing facilities. We expect to rely on third-party manufacturers for the manufacture of our product candidates for clinical trials and for commercial supply of any product candidate for which we obtain marketing approval.
We expect to rely on third-party manufacturers for the manufacture of our product candidates for clinical trials and for commercial supply of any product candidate for which we obtain marketing approval. -43- We may be unable to establish agreements with third-party manufacturers for clinical or commercial supply on terms favorable to us, or at all.
Provisions of our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable.
In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party and thereby preserve control by the present management. -61- Provisions of our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable.
Even if we are successful in these proceedings, we may incur substantial costs and diversion of management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us.
For example, in the U.S., proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and diversion of management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us.
Furthermore, limitations, or perceived limitations, in our intellectual property may limit the interest of third parties to partner, collaborate or otherwise transact with us, if third parties perceive a higher than acceptable risk to commercialization of our product candidates or future product candidates. -51- We may elect to sue a third party, or otherwise make a claim, alleging infringement or other violation of patents, trademarks, trade dress, copyrights, trade secrets, domain names or other intellectual property rights that we either own or license from a third party.
Furthermore, limitations, or perceived limitations, in our intellectual property may limit the interest of third parties to partner, collaborate or otherwise transact with us, if third parties perceive a higher than acceptable risk to commercialization of our product candidates or future product candidates.
Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems. -59- Our Amended and Restated Certificate of Incorporation, provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between the Company and its stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers or employees.
Our Amended and Restated Certificate of Incorporation, provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between the Company and its stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers or employees.
Such Series A-1 Preferred Stock and the securities issuable upon conversion of the Series A-1 Preferred Stock are potentially dilutive instruments and the conversion of these securities upon Stockholder Approval will result in dilution to our existing stockholders: As of March 30, 2023, subject to Stockholder Approval, the Series A-1 Preferred Stock will be convertible into approximately 61,612,000 shares of common stock.
Such Series A-1 Preferred Stock and the securities issuable upon conversion of the Series A-1 Preferred Stock are potentially dilutive instruments and the conversion of these securities upon Stockholder Approval resulted in dilution to our existing stockholders: Following Stockholder Approval, the Series A-1 Preferred Stock was converted into 19,516,205 shares of common stock as well as 43,649 shares of Series A-2 Preferred Stock.
We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole. However, these effects could have a material impact on our operations, and we will continue to monitor the situation closely.
The ultimate impact of COVID-19, or any other health epidemic, is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole.
We cannot guarantee that our product candidates, or manufacture or use of our product candidates, will not infringe third-party patents.
Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. We cannot guarantee that our product candidates, or manufacture or use of our product candidates, will not infringe third-party patents.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. -61- PART II
Biggest changeWe are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. -64- PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividend Policy We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future, except that i n March 2023,we agreed with certain investors to modify our dividend policy to state that we intend to pay dividends to all stockholders on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent (75%) of our annual net cash flow from operations following the approval of Renazorb by the FDA if obtained, and the commencement of commercial sales.
Biggest changeDividend Policy We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future, except that in March 2023,we agreed with certain investors to modify our dividend policy to state that we intend to pay dividends to all stockholders on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent (75%) of our annual net cash flow from operations following the approval of Oxylanthanum Carbonate by the FDA if obtained, and the commencement of commercial sales.
Stockholders As of March 28, 2023, there were 73 stockholders of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Stockholders As of March 28, 2024, there were 109 stockholders of record of our common stock. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees.
Removed
Sales of Unregistered Securities On November 28, 2022, we issued 33,500 shares of restricted common stock to RedChip for investor advisory services.
Removed
The foregoing issuance was made in a transaction not involving a public offering pursuant to an exemption from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act. ITEM 6. [RESERVED] -62-

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe anticipate that we will need to raise substantial additional capital, the requirements for which will depend on many factors, including: ● the scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our current product candidates and future product candidates; ● the number and scope of clinical programs we decide to pursue; ● the cost, timing and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates; ● the scope and costs of development and commercial manufacturing activities; ● the cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing approval; ● the extent to which we acquire or in-license other product candidates and technologies; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; ● our ability to establish and maintain collaborations on favorable terms, if at all; ● our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval; ● the impact, if any, of the coronavirus pandemic on our business operations; ● our ability to access capital; ● our implementation of operational, financial and management systems; and ● the costs associated with being a public company. -67- A change in the outcome of any of these or other variables with respect to the development of any of our current product candidates or future product candidates could significantly change the costs and timing associated with the development of that product candidate.
Biggest changeBased on our currently anticipated level of expenditures, and after receiving the proceeds from the private placement in March 2024, we believe that we have sufficient resources such that there is not substantial doubt about the ability to continue operations for at least one year after the date that these financial statements are available to be issued. -70- We anticipate that we will need to raise substantial additional capital, the requirements for which will depend on many factors, including: ● the scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our current product candidates and future product candidates; ● the number and scope of clinical programs we decide to pursue; ● the cost, timing, and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates; ● the scope and costs of development and commercial manufacturing activities; ● the cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing approval; ● the extent to which we acquire or in-license other product candidates and technologies; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; ● our ability to establish and maintain collaborations on favorable terms, if at all; ● our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval; ● the impact, if any, of the coronavirus pandemic on our business operations; ● our ability to access capital; ● our implementation of operational, financial and management systems; and ● the costs associated with being a public company.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and plan of operations together with and our accompanying financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and plan of operations together with our accompanying financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K.
To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as we satisfy a performance obligation.
To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as we satisfy a performance obligation.
If we are unable to secure additional capital, we may be required to curtail any clinical trials and development of new or existing products and take additional measures to reduce expenses in order to conserve our cash in amounts sufficient to sustain operations and meet our obligations.
If we are unable to secure additional capital, it may be required to curtail any clinical trials and development of new or existing products and take additional measures to reduce expenses in order to conserve cash in amounts sufficient to sustain operations and meet our obligations.
We expect to continue incurring losses in the future and will be required to raise additional capital in the future to complete our clinical trials, pursue product development initiatives and penetrate markets for the sale of our products.
We expect to continue incurring losses in the future and will be required to raise additional capital in the future to complete planned clinical trials, pursue product development initiatives and penetrate markets for the sale of our products.
These expenses include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees and allocated overheads, including information technology costs and utilities and expenses for the issuance of shares pursuant to the anti-dilution clause in the purchase of in process research and development technology (“IPR&D”).
These expenses include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees and allocated overheads, including information technology costs and utilities and expenses for the issuance of shares pursuant to the anti-dilution clause in the purchase of in process research and development technology.
We recognize forfeitures related to stock-based compensation as they occur. We estimate the fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes model requires the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, and the risk-free interest rate. -70- JOBS Act On April 5, 2012, the JOBS Act was enacted.
We recognize forfeitures related to stock-based compensation as they occur. We estimate the fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes model requires the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, and the risk-free interest rate. -73- JOBS Act On April 5, 2012, the JOBS Act was enacted.
We have used the net proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and corporate purposes, including hiring additional management and conducting market research and other commercial planning. Future revenue streams may consist of collaboration or licensing revenue as well as product sales.
We have used the net proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and corporate purposes, including hiring additional employees and conducting market research and other commercial planning. Future revenue streams may consist of collaboration or licensing revenue as well as product sales.
If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.
If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others’ rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves.
In addition, in connection with the Offering, we agreed to modify our dividend policy to state that we intend to pay dividends to all stockholders, including holders of Series A Preferred Stock on an as-if-converted-to-Common-Stock basis, on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent (75%) of our annual net cash flow from operations following approval of Renazorb by the FDA, if obtained, and the commencement of commercial sales.
In addition, in connection with the Offering, we agreed to modify our dividend policy to state that we intend to pay dividends to all stockholders, including holders of Series A Preferred Stock on an as-if-converted-to-Common-Stock basis, on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent (75%) of our annual net cash flow from operations following approval of Oxylanthanum Carbonate by the FDA, if obtained, and the commencement of commercial sales.
We recognize revenue from product sales or services rendered when control of the promised goods are transferred to a counterparty in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.
We recognize revenue from product sales or services rendered when control of the promised goods is transferred to a counterparty in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.
The Tranche A warrants for an aggregate exercise price of approximately $25 million are exercisable until 21 days following our announcement of receipt of FDA approval for Renazorb, the Tranche B warrants for an aggregate exercise price of approximately $25 million are exercisable until 21 days following our announcement of receipt of Transitional Drug Add-On Payment Adjustment (“TDAPA”) approval for Renazorb, and the Tranche C Warrant for an aggregate exercise price of approximately $50 million are exercisable until 21 days following four quarters of commercial sales of Renazorb following receipt of TDAPA approval.
The Tranche A warrants for an aggregate exercise price of approximately $25 million are exercisable until 21 days following our announcement of receipt of FDA approval for Oxylanthanum Carbonate, the Tranche B warrants for an aggregate exercise price of approximately $25 million are exercisable until 21 days following our announcement of receipt of Transitional Drug Add-On Payment Adjustment (“TDAPA”) approval for Oxylanthanum Carbonate, and the Tranche C Warrant for an aggregate exercise price of approximately $50 million are exercisable until 21 days following four quarters of commercial sales of Oxylanthanum Carbonate following receipt of TDAPA approval.
We believe that we will continue to have access to capital resources through possible equity offerings, debt financings, corporate collaborations or other means. There can be no assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis or at all.
Management believes that we will continue to have access to capital resources through possible equity offerings, debt financing, corporate collaborations, or other means. There can be no assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis or at all.
Proceeds from the offering will be used to support our NDA submission with the FDA for approval of Renazorb for the treatment of hyperphosphatemia in the U.S. and, if approved, for the commercial launch of Renazorb in the U.S.
Proceeds from the offering will be used to support our NDA submission with the FDA for approval of Oxylanthanum Carbonate for the treatment of hyperphosphatemia in the U.S. and, if approved, for the commercial launch of Oxylanthanum Carbonate in the U.S.
On the tenth (10th) Trading Day (as defined in the Certificate of Designation) following the announcement of the Stockholder Approval, each share of Series A-1 Preferred Stock shall automatically convert into a Unit.
On the tenth (10th) Trading Day (as defined in the Certificate of Designation) following the announcement of the stockholder approval, each share of Series A-1 Preferred Stock automatically converted into a Unit.
We expense both internal and external research and development expenses as they are incurred. -64- We do not allocate our costs by product candidate, as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratory supplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, are not tracked by product candidate.
We do not allocate our costs by product candidate, as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratory supplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, are not tracked by product candidate.
Subject to the limitations set forth in the Certificate of Designation, at the option of the holder, each share of Series A-2 Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock shall be convertible into one share of Common Stock.
Subject to the limitations set forth in the Certificate of Designation, at the option of the holder, shares of Series A-2 Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock shall be convertible into Common Stock.
Cash used in operating activities was primarily due to the use of funds for director and officer insurance premiums, development costs associated with our drug candidates, labor costs, consulting and accounting services, and other corporate expenditures for investor relations, compliance, and legal services.
Cash used in operating activities was primarily due to the use of funds for development costs associated with our drug candidates, labor costs, consulting services, and other corporate expenditures for investor relations, compliance, and legal services.
Net cash used in investing activities was $29,000 for the year ended December 31, 2021 and was due to the purchase of furniture and fixtures for our corporate office.
Net cash used in investing activities was $2,000 for the year ended December 31, 2022 and was due to the purchase of furniture and fixtures for our corporate office.
As a result of our initial public offering (“IPO”), on July 13, 2021 we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 we received approximately $22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses.
In connection with our initial public offering (“IPO”), on July 13, 2021, we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 we received approximately $22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses.
AKI is a sudden episode of kidney failure or kidney damage (within the first 90 days of injury). After 90 days, the patient is considered to have progressed into CKD. AKI affects over 2 million US patients and costs the healthcare system over $9 billion per year.
AKI is a sudden episode of kidney failure or kidney damage (within the first 90 days of injury). After 90 days, the patient is considered to have progressed into CKD. AKI affects more than 2 million U.S. patients and costs the healthcare system in excess of $9 billion per year.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K. All amounts in this report are in U.S. dollars, unless otherwise noted.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K.
We believe, however, that our management team’s broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing these assets into the Company at an attractive price with limited upfront cost. Since our formation we have devoted substantially all of our resources to developing our product candidates.
We believe, however, that our management team’s broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing these assets into our company. Since our formation we have devoted substantially all of our resources to developing our product candidates. We have incurred significant operating losses to date.
If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition.
If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition. -71- Related Party Payable We entered into a Service Agreement with Globavir Biosciences, Inc.
We anticipate that our general and administrative expenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting services costs associated with complying with the applicable stock exchange and the SEC requirements, investor relations costs and director and officer insurance premiums associated with being a public company.
We anticipate that our general and administrative expenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting services costs associated with complying with the applicable stock exchange and the SEC requirements, investor relations costs and director and officer insurance premiums associated with being a public company. -68- Other Expenses Other expenses consist primarily of interest expense related to convertible notes and a loss on conversion of convertible notes.
Recent Developments On March 3, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we agreed to issue and sell, in a private placement (the “Offering”), 30,190 shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), which offering will result in up to $130 million in gross proceeds and initial upfront funding of $30 million.
On March 3, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we agreed to issue and sell, in a private placement (the “Offering”), 30,190 shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), with initial upfront funding of $30 million and an additional $100 million possible if warrants issued in the Offering are exercised.
General and Administrative Expenses General and administrative expenses consist principally of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and tax services, including information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses, as well as services incurred pursuant to a services agreement with Globavir Biosciences Inc., a related party.
General and Administrative Expenses General and administrative expenses consist principally of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal, consulting, accounting and tax services, including information technology costs and utilities, and other general operating expenses not otherwise classified as research and development expenses.
Chronic kidney disease (CKD) is the gradual loss of kidney function that can get worse over time leading to lasting damage. Our initial focus is developing drugs and getting them approved in the US, and then look to partner with the other global biopharmaceutical companies in the rest of the world.
Chronic kidney disease (CKD) is the gradual loss of kidney (renal) function that can get worse over time leading to lasting damage and possibly Stage 5 or end-stage renal disease (ESRD). Our initial focus is on developing drugs and getting them approved in the U.S., and then to partner with global biopharmaceutical companies in the rest of the world.
AKI kills more than 300,000 patients per year in the US and is caused by multiple etiologies. Our business model is to license technologies and drugs and pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs.
More than 300,000 patients per year in the U.S. die due to AKI that has many causes. Our business model is to license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs.
We incurred a net loss of $10.0 million after including the effect of non-cash adjustments for stock issuance, stock compensation, and a loss on the conversion of our convertible debt. -69- Cash Flows from Investing Activities Net cash used in investing activities was $2,000 for the year ended December 31, 2022 and was due to the purchase of furniture and fixtures for our corporate office.
We incurred a net loss of $18.1 million after including the effect of non-cash adjustments for stock compensation. Cash Flows from Investing Activities Net cash used in investing activities was $12,000 for the year ended December 31, 2023 and was due to the purchase of furniture and fixtures for our corporate office.
Summary of Cash Flows The following table sets forth the primary sources and uses of cash for each of the periods presented below (in thousands): Years Ended December 31, 2021 2022 Net cash (used in) provided by: Operating activities $ (5,767 ) $ (15,651 ) Investing activities (29 ) (2 ) Financing activities 22,375 (471 ) Net (decrease) increase in cash $ 16,579 $ (16,124 ) Cash Flows from Operating Activities Net cash used in operating activities was $15.7 million for the year ended December 31, 2022.
Summary of Cash Flows The following table sets forth the primary sources and uses of cash for each of the periods presented below (in thousands): Years Ended December 31, 2022 2023 Net cash (used in) provided by: Operating activities $ (15,651 ) (18,283 ) Investing activities (2 ) (12 ) Financing activities (471 ) 27,541 Net (decrease) increase in cash $ (16,124 ) 9,246 Cash Flows from Operating Activities Net cash used in operating activities was $18.3 million for the year ended December 31, 2023.
Components of Results of Operations Revenues We recognize revenue from product sales or services rendered when control of the promised goods are transferred to a counterparty in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.
At the current time, we are unable to quantify the potential effects of this pandemic on our future financial statements. -67- Components of Results of Operations Revenues We recognize revenue from product sales or services rendered when control of the promised goods is transferred to a counterparty in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.
Revenue Recognition We implemented ASC 606, Revenue from Contracts with Customers. This included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures.
This includes the development of new policies based on the five-step model provided in the revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures.
These situations, or others associated with COVID-19, could cause delays in our clinical trial plans and could increase expected costs, all of which could have a material adverse effect on our business and financial condition. At the current time, we are unable to quantify the potential effects of this pandemic on our future financial statements.
These situations, or others associated with COVID-19, could cause delays in our clinical trial plans and could increase expected costs, all of which could have a material adverse effect on our business and financial condition.
General and Administrative Expenses General and administrative expenses increased by approximately $3.7 million, or 127%, from $2.9 million for the year ended December 31, 2021 to $6.6 million for the year ended December 31, 2022 primarily due to an increase of $1.4 million in consulting and professional services costs. Labor costs increased $747,000 due to hiring of new employees.
General and Administrative Expenses General and administrative expenses increased by approximately $1.9 million, or 30%, from $6.6 million for the year ended December 31, 2022 to $8.5 million for the year ended December 31, 2023 primarily due to an increase of $1.4 million in consulting and professional services costs.
Research and development expenses include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees and allocated overheads, including information technology costs and utilities and expenses for issuance of shares pursuant to anti-dilution clause in the purchase of IPR&D technology.
Research and development expenses include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees.
We incurred a net loss of $18.1 million after including the effect of non-cash adjustments for stock compensation. Net cash used in operating activities was $5.8 million for the year ended December 31, 2021.
We incurred a net loss of $30.5 million after including the effect of non-cash adjustments for stock compensation and change in fair value of our warrant liability. Net cash used in operating activities was $15.7 million for the year ended December 31, 2022.
We have generated approximately $1.6 million in licensing revenue to date. -66- Future Funding Requirements We have incurred net losses since our inception. For the year ended December 31, 2022, we had a net loss of $18.1 million, and we expect to incur substantial additional losses in future periods.
Future Funding Requirements We have incurred net losses since our inception. For the year ended December 31, 2023, we had a net loss of $30.5 million, and we expect to incur substantial additional losses in future periods. As of December 31, 2023, we had an accumulated deficit of $64.5 million.
The initial amended term of the Service Agreement expired on December 31, 2020, and the agreement automatically renews for successive one month periods after the initial termination date. Pursuant to the Service Agreement, the Company paid Globavir $50,000 per month through December 31, 2019 and $10,000 per month commencing on January 1, 2020.
Pursuant to the Service Agreement, the Company paid Globavir $50,000 per month through December 31, 2019, and $10,000 per month commencing on January 1, 2020.
We have incurred significant operating losses to date. Our net losses were $10.0 million and $18.1 million for the years ended December 31, 2021 and 2022. As of December 31, 2022, we had an accumulated deficit of $34.0 million.
Our net losses were $18.1 million and $30.5 million for the years ended December 31, 2022 and 2023. As of December 31, 2023, we had an accumulated deficit of $64.5 million.
As of December 31, 2022, we had an accumulated deficit of $34.0 million. On March 6, 2023, we announced completion of a securities purchase agreement with certain healthcare-focused institutional investors that will provide up to $130.0 million in gross proceeds through a private placement and that includes initial upfront funding of $30.0 million.
We have generated approximately $1.6 million in licensing revenue to date. On March 3, 2023, we entered into a securities purchase agreement with certain healthcare-focused institutional investors that may provide up to $130.0 million in gross proceeds through a private placement and that includes initial upfront funding of $30.0 million.
We consider our critical accounting policies and estimates to be related to revenue, research and development and stock-based compensation. There have been no material changes to our critical accounting policies and estimates during the year ended December 31, 2022 from those used for the year ended December 31, 2021. The below policies represent our critical accounting policies.
There have been no other material changes to our critical accounting policies and estimates during the year ended December 31, 2023 from those used for the year ended December 31, 2022. The below policies represent our critical accounting policies. Revenue Recognition We apply ASC 606, Revenue from Contracts with Customers, for our revenue recognition guidance.
We received an upfront payment of approximately $1.0 million. There was no comparable revenue earned in the prior period. We may earn additional licensing revenue in the future if we negotiate business development arrangements with third parties.
We received an upfront payment of approximately $1.0 million associated with a licensing agreement entered into with Lee’s Pharmaceutical (HK) Limited in July 2022. We may earn additional licensing revenue in the future if we negotiate business development arrangements with third parties.
If we fail to raise capital or enter into agreements to raise capital as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our current product candidates and future product candidates. -63- We plan to continue to use third-party service providers, including contract manufacturing organizations, to carry out our pre-clinical and clinical development and to manufacture and supply the materials to be used during the development and commercialization of our product candidates.
If we fail to raise capital or enter into agreements to raise capital as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our current product candidates and future product candidates.
Cash Flows from Financing Activities Net cash used by financing activities was $471,000 for the year ended December 31, 2022 and was due primarily to payments made pursuant to our financed director and officer insurance policies.
Net cash used by financing activities was $471,000 for the year ended December 31, 2022 and was primarily due to payments made pursuant to our financed director and officer insurance policies. -72- Critical Accounting Policies, Significant Judgments and Use of Estimates Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
Overview We are a biotechnology company dedicated to developing treatments for kidney disease that have the potential to offer medical benefit. Our development programs are focused on the development of two novel therapies: Renazorb, for treatment of hyperphosphatemia in patients with chronic kidney disease, and UNI 494, for treatment of acute kidney injury (AKI).
As we grow the company and build our team, we intend to focus on identifying medical conditions within and outside of kidney disease. Our current development programs are focused on two novel therapies: Oxylanthanum Carbonate, for treatment of hyperphosphatemia in patients with chronic kidney disease on dialysis, and UNI 494, for treatment of acute kidney injury (AKI).
Related Party Payable We entered into a Service Agreement with Globavir Biosciences, Inc. (“Globavir”), a related party (the “Service Agreement”). Globavir provides administrative and consulting services and shared office space and other costs in connection with the Company’s drug development programs.
(“Globavir”), a related party (the “Service Agreement”). Globavir provides administrative and consulting services and shared office space and other costs in connection with the Company’s drug development programs. The initial amended term of the Service Agreement expired on December 31, 2020, and the agreement automatically renews for successive one-month periods after the initial termination date.
Liquidity and Capital Resources Sources of Liquidity Since our formation through December 31, 2020, we have funded our operations with the sale of common stock, convertible notes and from a loan from our Chief Executive Officer and principal stockholder. During 2021 we raised $1.1 million through the issuance of convertible notes to investors.
We earned interest income of $615,000 on our cash balance during the year that was partially offset by a $76,000 increase in interest expense. -69- Liquidity and Capital Resources Sources of Liquidity Since our formation through June 2021, we have funded our operations with the sale of common stock, convertible notes and from a loan from our Chief Executive Officer and principal stockholder.
Private Placement On March 3, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we issued and sold, in a private placement, 30,190 shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share, which offering will result in up to $130 million in gross proceeds and initial upfront funding of $30 million.
On March 13, 2024, the Company entered into a securities purchase agreement with certain accredited investors pursuant to which we agreed to issue and sell, in a private placement 50,000 shares of our Series B Convertible Preferred Stock, par value $0.001 per share at a purchase price of $1,000 per share with an initial conversion price of $1.00 per share, subject to adjustment for an aggregate purchase price of $50 million.
Research and Development Expenses Research and development expenses increased by approximately $6.4 million, or 105%, from $6.1 million for the year ended December 31, 2021 to $12.4 million for the year ended December 31, 2022.
Research and Development Expenses Research and development expenses increased by approximately $0.4 million, or 4% from $12.4 million for the year ended December 31, 2022 to $12.9 million for the year ended December 31, 2023. The increase in research and development expenses was primarily due to a $662,000 increase in labor costs. Non-cash stock compensation increased $465,000.
Results of Operations Comparison of the Years Ended December 31, 2021 and 2022 (in thousands) Years Ended December 31, 2021 2022 Change % Change Licensing revenues: $ - $ 951 $ 951 100 % Operating expenses: Research and development 6,080 12,436 6,356 105 % General and administrative 2,897 6,567 3,670 127 % Total operating expenses 8,977 19,003 10,026 112 % Loss from operations (8,977 ) (18,052 ) (9,075 ) 101 % Other income (expenses): Interest expense (628 ) (6 ) 622 (99 )% Loss on debt conversion (431 ) - 431 (100 )% Gain on extinguishment of debt 19 - (19 ) (100 )% Total other income (expenses) (1,040 ) (6 ) 1,034 (99 )% Net loss $ (10,017 ) $ (18,058 ) $ (8,041 ) 80 % -65- Licensing Revenues Licensing revenues increased approximately $1.0 million, or 100%, from the prior year due to a licensing agreement entered into with Lee’s Pharmaceutical (HK) Limited in July 2022.
Results of Operations Comparison of the Years Ended December 31, 2022 and 2023 (in thousands) Years Ended December 31, 2022 2023 Change % Change Licensing revenues: $ 951 $ 675 $ (276 ) (29 )% Operating expenses: Research and development 12,436 12,902 466 4 % General and administrative 6,567 8,547 1,980 30 % Total operating expenses 19,003 21,449 2,446 13 % Loss from operations (18,052 ) (20,774 ) (2,722 ) 15 % Other income (expenses): Interest Income - 615 615 100 % Interest expense (6 ) (82 ) (76 ) 1,267 % Change in fair value of warrant liability - (10,303 ) (10,303 ) 100 % Total other income (expenses) (6 ) (9,770 ) (9,764 ) 162,733 % Net loss $ (18,058 ) $ (30,544 ) $ (12,486 ) 69 % Licensing Revenues Licensing revenues decreased approximately $0.3 million or 29% from 2022 due to a smaller upfront payment of approximately $0.7 million associated with a licensing agreement entered into with Lotus International PTE Ltd in February 2023.
Net cash provided by financing activities was $22.4 million for the year ended December 31, 2021 and was primarily related to proceeds received from our initial public offering, net of issuance and deferred offering costs.
Cash Flows from Financing Activities Net cash provided by financing activities was $27.5 million for the year ended December 31, 2023 and was due primarily to the private placement financing agreement we closed on March 8, 2023.
In the European Union (EU), around 20 million (approximately 8%) adults have CKD, more than 1 million CKD stage 3-5 patients, and approximately 180 thousand patients with ESRD have hyperphosphatemia. The number of patients with ESRD is increasing steadily and is projected to reach between 971,000 and 1,259,000 in 2030.
Approximately 550,000 patients (ESRD) are on dialysis and of those, approximately 450,000 patients (~80%) take phosphate binders to control hyperphosphatemia hyperphosphatemia (too much phosphorus in their blood). The number of patients with ESRD in the U.S. is increasing steadily and is projected to reach between 971,000 and 1,259,000 patients in 2030.
According to estimates by The Centers for Disease Control and Prevention (CDC) in 2019, 37 million (approximately 15%) adults in the United States have CKD and, of these, approximately 2 million patients with CKD stage 3-5, and around 400 thousand patients with end-stage renal disease (ESRD) have hyperphosphatemia.
According to the United States Renal Data System (USRDS) 2022 Annual Data Report, 30 million (14%) of adults in the United States are estimated to have CKD and, of these, approximately 13 million patients have advanced CKD (stage 3-5).
Non-cash stock compensation costs increased $419,000. Insurance expense for directors and officers increased $525,000, and rent, travel, supplies and other costs increased $567,000. Other Income (Expenses) Other income (expenses) decreased by approximately $1.0 million, or 99% from $1.0 million for the year ended December 31, 2021 to approximately $6,000 for the year ended December 31, 2022.
Labor costs increased $473,000 due to hiring of new employees, and rent, travel, supplies and other costs increased $353,000. Non-cash stock compensation costs increased $256,000. The increases were partially offset by a decrease in insurance expense for directors and officers of $528,000.
Removed
Subject to the terms and limitations contained in the Certificate of Designation, the Series A-1 Preferred Stock issued in the Offering will not become convertible until our stockholders approve the issuance of the Units upon conversion of the Series A-1 Preferred Stock and the issuance of all Common Stock upon conversion of the Series A Preferred Stock (as defined below), among other items (the “Stockholder Approval”).
Added
All amounts in this report are in U.S. dollars, unless otherwise noted. -65- Overview We are a biotechnology company dedicated to developing treatments for certain medical conditions. Currently, two of our programs are focused on kidney disease, an area we believe we have the potential to offer medical benefit.
Removed
Other Expenses Other expenses consist primarily of interest expense related to convertible notes and a loss on conversion of convertible notes.
Added
Oxylanthanum Carbonate and UNI 494 were initially developed by and licensed to us from Spectrum Pharmaceuticals (“Spectrum”) and Sphaera Pharma, respectively. Spectrum conducted a Phase 1 clinical trial with Oxylanthanum Carbonate in 2012, prior to the grant of our license in 2018.
Removed
The increase in research and development expenses was primarily due to an increase in development costs of $6.5 million due to product formulation, clinical study, and preclinical study services in the current period. New employee hires increased labor costs $1.6 million, and consulting and other costs increased $756,000 from the prior period.
Added
Sphaera conceived and performed initial characterization of various potential pro-drug linkers, including the initial patent application, and performed some initial physiochemical characterization and preliminary animal pharmacokinetic studies. As discussed herein, after completing IND enabling preclinical studies, we have conducted a Phase I clinical study in healthy volunteers with UNI 494 in 2023.
Removed
The increase was partially offset by a $2.2 million decrease in non-cash expense from the issuance of common stock in 2021 pursuant to the anti-dilution clause in the purchase of in process research and development technology from Spectrum Pharmaceuticals, Inc. In addition, non-cash stock compensation costs decreased $338,000 from the prior period.
Added
We plan to continue to use third-party service providers, including contract manufacturing organizations, to carry out our pre-clinical and clinical development and to manufacture and supply the materials to be used during the development and commercialization of our product candidates. -66- Recent Developments On March 13, 2024, the Company signed a securities purchase agreement with certain healthcare-focused institutional investors that will provide $50 million in gross proceeds to us through a private placement.
Removed
The decrease was due primarily to decreased interest expense incurred on our convertible notes of $0.6 million as well as conversion to equity of our outstanding convertible notes as a result of our IPO in 2021 which resulted in a non-cash loss on debt conversion of $0.4 million.
Added
Pursuant to the securities purchase agreement, the Company issued to institutional purchasers $50 million in shares of the Company’s Series B Convertible Preferred Stock. 50,000 Shares of Series B Convertible Preferred Stock were issued at a price of $1,000.00 per share and are convertible into common stock at $1.00 per share.
Removed
Based on our current level of expenditures, and after receiving the net proceeds of $28.1 million from a private placement financing, we believe that we have sufficient resources such that there is not substantial doubt about our ability to continue operations for at least one year after the date that these financial statements are available to be issued.
Added
On June 26, 2023, we held our annual shareholder meeting, and as a result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 Preferred Stock was obtained.
Removed
Convertible Notes In January through May 2021, we issued convertible notes (the “2021 Notes”) in the aggregate principal amount of $1,098,000. The 2021 Notes bear interest at a rate of 12% per annum, payable at maturity, and mature between January and May, 2022.
Added
We expense both internal and external research and development expenses as they are incurred.
Removed
The 2021 Notes shall automatically convert into shares of common stock upon the closing of a financing pursuant to which we receive gross proceeds of at least $500,000 (a “Qualified Financing”) or upon a change of control. The 2021 Notes shall convert into such numbers of shares of common stock equal to the conversion amount divided by the Conversion Price.
Added
The increases were partially offset by a decrease in drug development costs of $671,000.
Removed
“Conversion Price” means (i) in the event of a Qualified Financing, 70% of the price per share (or conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable) sold in such financing or (ii) in the event of a change of control, the price per share reflected in such transaction.
Added
Other Income (Expenses) Other income (expenses) increased by approximately $9.8 million, or 162,733% from $6,000 for the year ended December 31, 2022 to approximately $9.8 million for the year ended December 31, 2023. The increase was due primarily to the change in fair value of our warrant liability.
Removed
We accounted for the 2021 Notes as stock-settled debt and we were accreting the carrying amount of the 2021 Notes to the settlement amount through maturity. In July and through November 2020, we issued convertible notes (the “2020 Notes”) in the aggregate principal amount of $1,290,000.
Added
A change in the outcome of any of these or other variables with respect to the development of any of our current product candidates or future product candidates could significantly change the costs and timing associated with the development of that product candidate.
Removed
The 2020 Notes bear interest at a rate of 12% per annum, payable at maturity, and mature between July and November 2021. The 2020 Notes shall automatically convert into shares of common stock upon the closing of a financing pursuant to which we receive gross proceeds of at least $500,000 (a “Qualified Financing”) or upon a change of control.
Added
We have not entered into any additional agreements with Globavir during the year ended December 31, 2023.
Removed
The 2020 Notes shall convert into such numbers of shares of common stock equal to the conversion amount divided by the Conversion Price.
Added
We consider our critical accounting policies and estimates to be related to revenue, research and development, stock-based compensation, and warrant liabilities. The fair value of warrants contingently issued as part of our March 2023 private placement financing represents a material addition to our critical accounting policies and estimates.
Removed
“Conversion Price” means (i) in the event of a Qualified Financing, 70% of the price per share (or conversion price, as applicable) of common stock (or securities convertible into common stock, as applicable) sold in such financing or (ii) in the event of a change of control, the price per share reflected in such transaction. -68- We accounted for the 2020 Notes as stock-settled debt and we are accreting the carrying amount of the 2020 Notes to the settlement amount through maturity.

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