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What changed in Travere Therapeutics, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Travere Therapeutics, Inc.'s 2024 and 2025 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 2025 report.

+610 added−546 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-21)

Top changes in Travere Therapeutics, Inc.'s 2025 10-K

610 paragraphs added · 546 removed · 428 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

152 edited+71 added−38 removed240 unchanged
Biggest changeFILSPARI received accelerated approval in the U.S. in February 2023 and full approval in September 2024 and is indicated to slow kidney function decline in adults with primary IgAN who are at risk for disease progression.
Biggest changeIn January 2026, we announced that the FDA extended the review timeline for the sNDA and the new PDUFA target action date is April 13, 2026. 3 Following a voluntary pause in enrollment, we restarted enrollment activities for the pivotal Phase 3 HARMONY Study in the first quarter of 2026. 8 Table of Contents FILSPARI® (sparsentan) On September 5, 2024, the FDA granted full approval of FILSPARI® (sparsentan) to slow kidney function decline in adults with primary IgAN who are at risk of disease progression.
Pegtibatinase demonstrated dose-dependent reductions in total homocysteine (tHcy) during the 12 weeks of treatment, and in the highest dose cohort to date evaluating 1.5 mg/kg of pegtibatinase twice weekly (BIW), treatment with pegtibatinase resulted in rapid and sustained reductions in total homocysteine (tHcy) through 12 weeks of treatment, including a 55.1% mean relative reduction in tHcy from baseline as well as maintenance of tHcy below a clinically meaningful threshold of 100 μmol.
Pegtibatinase demonstrated dose-dependent reductions in total homocysteine ("tHcy") during the 12 weeks of treatment, and in the highest dose cohort to date evaluating 1.5 mg/kg of pegtibatinase twice weekly ("BIW"), treatment with pegtibatinase resulted in rapid and sustained reductions in tHcy through 12 weeks of treatment, including a 55.1% mean relative reduction in tHcy from baseline as well as maintenance of tHcy below a clinically meaningful threshold of 100 μmol.
Mission License Agreement In 2014, we entered into a license agreement with Mission Pharmacal, pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola.
Mission License Agreement In 2014, we entered into a license agreement with Mission Pharmacal ("Mission"), pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola ("Mission License Agreement").
FILSPARI is the first non-immunosuppressive therapy approved for IgAN and is the only oral, once-daily, non-immunosuppressive therapy approved for this condition that directly targets glomerular injury in the kidney by blocking two critical pathways of IgAN disease progression (endothelin-1 and angiotensin II). We estimate more than 70,000 patients in the United States to be addressable under FILSPARI's full approval indication.
FILSPARI was the first non-immunosuppressive therapy approved for IgAN and is the only oral, once-daily, non-immunosuppressive therapy approved for this condition that directly targets glomerular injury in the kidney by blocking two critical pathways of IgAN disease progression (endothelin-1 and angiotensin II). We estimate more than 70,000 patients in the United States to be addressable under FILSPARI's full approval indication.
If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the Heads of Medicines Agencies’ Coordination Group for Mutual Recognition and Decentralised Procedures – Human, or CMDh, for review.
If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the Heads of Medicines Agencies’ Coordination Group for Mutual Recognition and Decentralised Procedures – Human ("CMDh) for review.
The Travere patent family is directed to methods for treating human cystathionine β-synthase deficiency in patients with elevated homocysteine levels. Thiola Our patent portfolio for Thiola is comprised of a patent family which is exclusively licensed from Mission Pharmacal (the “Mission patent family”). The Mission patent family is directed to a new formulation of Thiola, known as Thiola EC.
The Travere patent family is directed to methods for treating human cystathionine β-synthase deficiency in patients with elevated homocysteine levels. Thiola Our patent portfolio for Thiola is comprised of a patent family which is exclusively licensed from Mission Pharmacal (the “Mission patent family”). The Mission patent family is directed to a formulation of Thiola, known as Thiola EC.
The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.
The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports ("PSURs").
The 10-year period of market exclusivity may extend to 11 years if, during the eight-year period of data exclusivity, the product receives marketing authorization for a second therapeutic that provides a significant clinical benefit in comparison to existing therapies.
The 10-year period of data and market exclusivity may extend to 11 years if, during the eight-year period of data exclusivity, the product receives marketing authorization for a second therapeutic that provides a significant clinical benefit in comparison to existing therapies.
(running from the date of accelerated approval) for the reduction of proteinuria in adults with primary IgAN at risk of rapid disease progression, and has been granted a separate seven years of Orphan Drug Exclusivity in the U.S.
FILSPARI has been granted seven years of Orphan Drug Exclusivity in the U.S. (running from the date of accelerated approval) for the reduction of proteinuria in adults with primary IgAN at risk of rapid disease progression, and has been granted a separate seven years of Orphan Drug Exclusivity in the U.S.
The key steps required before a drug may be marketed in the United States generally include the following: • completion of extensive preclinical laboratory tests, animal studies, toxicology, pharmacology, and formulation studies in accordance with the FDA’s GLP regulations; • submission to the FDA of an IND, and oversight by an Institutional Review Board, for human clinical testing, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials (phase 1-3) in accordance with Good Clinical Practices ("GCP") requirements to establish the safety and efficacy of the drug for each proposed indication; • submission to the FDA of an NDA or BLA after completion of the required pivotal clinical trials; • satisfactory completion of any FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices ("cGMPs"); and • FDA review and approval of the NDA or BLA.
The key steps required before a drug may be marketed in the United States generally include the following: 19 Table of Contents • completion of extensive preclinical laboratory tests, animal studies, toxicology, pharmacology, and formulation studies in accordance with the FDA’s GLP regulations; • submission to the FDA of an IND, and oversight by an Institutional Review Board, for human clinical testing, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials (phase 1-3) in accordance with Good Clinical Practices ("GCP") requirements to establish the safety and efficacy of the drug for each proposed indication; • submission to the FDA of an NDA or BLA after completion of the required pivotal clinical trials; • satisfactory completion of any FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices ("cGMPs"); and • FDA review and approval of the NDA or BLA.
A drug that receives Fast Track designation is eligible for some or all of the following: • more frequent meetings with FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval; • more frequent written communication from FDA about such things as the design of the proposed clinical trials and use of biomarkers; • eligibility for Accelerated Approval and Priority Review, if relevant criteria are met; and • Rolling Review, which means that a drug company can submit completed sections of its NDA or BLA for review by FDA, rather than waiting until every section is completed before the entire application can be reviewed.
A drug that receives Fast Track designation is eligible for some or all of the following: 21 Table of Contents • more frequent meetings with FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval; • more frequent written communication from FDA about such things as the design of the proposed clinical trials and use of biomarkers; • eligibility for Accelerated Approval and Priority Review, if relevant criteria are met; and • Rolling Review, which means that a drug company can submit completed sections of its NDA or BLA for review by FDA, rather than waiting until every section is completed before the entire application can be reviewed.
In December 2023, we announced that we completed a planned Type C meeting with the FDA to discuss results from the Phase 3 DUPLEX Study of sparsentan in FSGS.
In December 2023, we announced that we had completed a planned Type C meeting with the FDA to discuss results from the Phase 3 DUPLEX Study of sparsentan in FSGS.
For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.
For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (“SIP”) proposal to import certain drugs from Canada for specific state healthcare programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.
According to public sources, Syntis Bio, Inc. has a pre-clinical development program for a microbiome therapy for the management of HCU. Additionally, in July 2024, Innorna announced that they received FDA’s Rare Pediatric Disease Designation for IN022 (pre-clinical) for the treatment of HCU. Based on public sources, there are other pre-clinical development programs in HCU that may enter the clinic.
According to public sources, Syntis Bio, Inc. has two pre-clinical development programs for a microbiome therapy for the management of HCU. Additionally, in July 2024, Innorna announced that they received FDA’s Rare Pediatric Disease Designation for IN022 (pre-clinical) for the treatment of HCU. Based on public sources, there are other pre-clinical development programs in HCU that may enter the clinic.
Food and Drug Administration (the FDA) granted full approval to our lead development program, FILSPARI (sparsentan), which is indicated to slow kidney function decline in adults with primary IgAN who are at risk of disease progression. IgAN is a rare progressive kidney disease and the most common type of primary glomerulonephritis worldwide.
Food and Drug Administration ("FDA") granted full approval to our lead development program, FILSPARI (sparsentan), which is indicated to slow kidney function decline in adults with primary Immunoglobulin A nephropathy (" IgAN") who are at risk of disease progression. IgAN is a rare progressive kidney disease and the most common type of primary glomerulonephritis worldwide.
During 2024 we continued to focus on ways to maximize a people-centered, inclusive, and recognition-based company culture, building on initiatives that have been implemented over the last several years. Also during 2024, we continued to enhance our hybrid workforce program that provides a variety of virtual and in-person collaboration opportunities.
During 2025 we continued to focus on ways to maximize a people-centered, inclusive, and recognition-based company culture, building on initiatives that have been implemented over the last several years. Also during 2025, we continued to enhance our hybrid workforce program that provides a variety of virtual and in-person collaboration opportunities.
We have some flexibility in securing other manufacturers to produce our therapeutic candidates; however, our alternatives may be limited due to proprietary technologies or methods used in the manufacture of some of our therapeutic candidates. Sales, Marketing and Distribution In 2024, we continued to utilize our specialty sales force to market our FDA-approved products in the U.S.
We have some flexibility in securing other manufacturers to produce our therapeutic candidates; however, our alternatives may be limited due to proprietary technologies or methods used in the manufacture of some of our therapeutic candidates. Sales, Marketing and Distribution In 2025, we continued to utilize our specialty sales force to market our FDA-approved products in the U.S.
The federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), created new federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), created new federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party 25 Table of Contents payers, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
In this highest dose cohort to date, treatment with pegtibatinase resulted in rapid and sustained reductions in total homocysteine (tHcy), with a 67.1% mean relative reduction in tHcy from baseline, as well as maintenance of mean tHcy below the clinically meaningful threshold of 100 μmol, over weeks 6 to 12.
In this highest dose cohort to date, treatment with pegtibatinase resulted in rapid and sustained reductions in tHcy, with a 67.1% mean relative reduction in tHcy from baseline, as well as maintenance of mean tHcy below the clinically meaningful threshold of 100 μmol, over weeks 6 to 12.
The HARMONY Study is a global, randomized, multi-center, double-blind, placebo-controlled Phase 3 clinical trial designed to evaluate the efficacy and safety of pegtibatinase as a novel treatment to reduce total homocysteine (tHcy) levels. In the beginning of 2024, the first patients were dosed in the HARMONY Study.
The HARMONY Study is a global, randomized, multi-center, double-blind, placebo-controlled Phase 3 clinical trial designed to evaluate the efficacy and safety of pegtibatinase as a novel treatment to reduce tHcy levels. In the beginning of 2024, the first patients were dosed in the HARMONY Study.
Additional results from the PROTECT Study demonstrated the 8 Table of Contents benefit of FILSPARI on absolute eGFR accrued over time and by Week 110 resulted in a 3.8 mL/min/1.73 m 2 difference in the mean change from baseline between FILSPARI and irbesartan.
Additional results from the PROTECT Study demonstrated the benefit of FILSPARI on absolute eGFR accrued over time and by Week 110 resulted in a 3.8 mL/min/1.73 m 2 difference in the mean change from baseline between FILSPARI and irbesartan.
The Ligand patent family is directed to methods of using sparsentan in the treatment of various diseases, including glomerulosclerosis and IgAN. As of December 31, 2024, this patent family included two U.S. patents (U.S. Patent No. 9,662,312, which we refer to herein as the ‘312 patent, and U.S.
The Ligand patent family is directed to methods of using sparsentan in the treatment of various diseases, including glomerulosclerosis and IgAN. As of December 31, 2025, this patent family included two U.S. patents (U.S. Patent No. 9,662,312, which we refer to herein as the ‘312 patent, and U.S.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending new drug or new biologic license applications, or NDAs and BLAs, respectively, warning 18 Table of Contents or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending new drug or new biologic license applications, or NDAs and BLAs, respectively, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.
Additionally, an MA may be granted to a similar medicinal product with the same 27 Table of Contents orphan indication during the 10 year period if: (i) if the applicant consents to a second original orphan medicinal product application, (ii) if the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities; or (iii) if the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior to the original orphan medicinal product.
Additionally, an MA may be granted to a similar medicinal product with the same orphan indication during the 10 year period if: (i) if the applicant consents to a second original orphan medicinal product application, (ii) if the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities; or (iii) if the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior to the original orphan medicinal product.
("Mirum Pharmaceuticals" or “Mirum”), pursuant to which Mirum agreed to purchase substantially all of the assets primarily related to our business of development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of Chenodal and Cholbam (also known as Kolbam, and together with Chenodal, the “Products”), collectively, the "bile acid business". This transaction was consummated on August 31, 2023.
("Mirum Pharmaceuticals" or “Mirum”), pursuant to which Mirum agreed to purchase substantially all of the assets primarily related to our business of development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of Chenodal and Cholbam (also known as Kolbam, and together with Chenodal, the “Products”). This transaction was consummated on August 31, 2023.
We must use commercially reasonable efforts to develop and commercialize sparsentan in specified major market countries and other countries in which we believe it is commercially reasonable to develop and commercialize such products. As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million.
We must use commercially reasonable efforts to develop and commercialize sparsentan in specified major market countries and other countries in which we believe it is commercially reasonable to develop and commercialize such products. 14 Table of Contents As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million.
If sparsentan receives marketing authorization in any of the territories covered by the exclusive license to Renalys, Renalys will be responsible for all development, regulatory matters, and commercialization activities in such licensed territories.
If sparsentan receives marketing authorization in any of the territories covered by the exclusive license to Chugai, Chugai will be responsible for all development, regulatory matters, and commercialization activities in such licensed territories.
In this cohort, five patients were randomized in a blinded fashion to receive 2.5 mg/kg of lyophilized pegtibatinase or placebo twice weekly (BIW), with four patients assigned to the treatment group.
In this cohort, five patients were randomized in a blinded fashion to receive 2.5 mg/kg of lyophilized pegtibatinase or placebo BIW, with four patients assigned to the treatment group.
Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. Government authorities and other third-party payers have and are developing methods of controlling healthcare costs, such as by limiting coverage and the amount of reimbursement for particular medications.
Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. Government authorities and other third-party payers have and are developing methods of controlling healthcare costs, such as by limiting coverage and the amount of reimbursement for particular medications. For example, the U.S.
Expedited Development and Review Programs A sponsor may seek to develop and obtain approval of its products under programs designed to accelerate the development, FDA review and approval of new products that meet certain criteria. 20 Table of Contents Fast track is a process designed by the FDA to facilitate the development of drugs to treat serious conditions through expediting their review.
Expedited Development and Review Programs A sponsor may seek to develop and obtain approval of its products under programs designed to accelerate the development, FDA review and approval of new products that meet certain criteria. Fast track is a process designed by the FDA to facilitate the development of drugs to treat serious conditions through expediting their review.
Our decision to acquire rights to a therapeutic candidate also depends on the 7 Table of Contents scientific merits of the available clinical data; the identifiable orphan patient population; the economic terms of any proposed acquisition of rights; the projected amount of capital required to develop the therapeutic candidate; and the economic potential of the therapeutic candidate, should it be commercialized.
Our decision to acquire rights to a therapeutic candidate also depends on the scientific merits of the available clinical data; the identifiable orphan patient population; the economic terms of any proposed acquisition of rights; the projected amount of capital required to develop the therapeutic candidate; and the economic potential of the therapeutic candidate, should it be commercialized.
Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to product 22 Table of Contents acceptance. Further, coverage policies and third-party payer reimbursement rates may change at any time.
Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to product acceptance. Further, coverage policies and third-party payer reimbursement rates may change at any time.
These circumstances may arise in particular when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not 26 Table of Contents possible to provide comprehensive information, or when generating data may be contrary to generally accepted ethical principles.
These circumstances may arise in particular when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not possible to provide comprehensive information, or when generating data may be contrary to generally accepted ethical principles.
FILSPARI had previously been granted accelerated approval in February 2023 based on the surrogate marker of proteinuria. Full approval was based on positive long-term confirmatory results from the PROTECT Study demonstrating that FILSPARI significantly slowed kidney function decline over two years compared to irbesartan. Sparsentan is also in late-stage development for FSGS.
FILSPARI had previously been granted accelerated approval for IgAN in February 2023 based on the surrogate marker of proteinuria. Full approval was based on positive long-term confirmatory results from the PROTECT Study demonstrating that FILSPARI significantly slowed kidney function decline over two years compared to irbesartan. Sparsentan is also in late-stage development for focal segmental glomerulosclerosis (" FSGS").
The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as urine protein-to-creatinine ratio (UPCR) ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.
The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint ("FPRE"), which is defined as UPCR ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.
The ANDA applicant may also elect to submit a section viii statement certifying that its proposed ANDA label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent.
The ANDA applicant may also elect to submit a section viii statement certifying that its proposed ANDA label does not contain (or 22 Table of Contents carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent.
All such filings are available through our website free of charge. The SEC also maintains an internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
All such filings are available through our website free of charge. The SEC also maintains an internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 30 Table of Contents
Drugs approved in this way are commonly 21 Table of Contents referred to as “generic equivalents” to the listed drug, and can often be substituted by pharmacists under prescriptions written for the original listed drug. The ANDA applicant is required to certify to the FDA concerning all patents listed for the approved product in the FDA’s Orange Book.
Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug, and can often be substituted by pharmacists under prescriptions written for the original listed drug. The ANDA applicant is required to certify to the FDA concerning all patents listed for the approved product in the FDA’s Orange Book.
Employees and Human Capital Management As of January 31, 2025, we had 385 full-time employees, with most of those based in the United States and a small number outside of the United States. We consider the intellectual capital and well-being of our employees to be an important driver of our business and key to our future success.
Employees and Human Capital Management As of January 31, 2026, we had 497 full-time employees, with most of those based in the United States and a small number outside of the United States. We consider the intellectual capital and well-being of our employees to be an important driver of our business and key to our future success.
Thiola EC became available to patients in July 2019. 11 Table of Contents In May 2021, a generic option for the 100mg version of the original formulation of Thiola (tiopronin tablets) became available and in June 2022, a second option for the 100mg version of the original formulation of Thiola (tiopronin tablets) was approved.
Thiola EC became available to patients in July 2019. In May 2021, a generic option for the 100mg version of the original formulation of Thiola (tiopronin tablets) became available and in June 2022, a second option for the 100mg version of the original formulation of Thiola (tiopronin tablets) was approved.
We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of our information technology systems. Trade secrets and know-how can be difficult to protect.
We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our premises and physical and electronic security of 17 Table of Contents our information technology systems. Trade secrets and know-how can be difficult to protect.
Medicines used in clinical trials must be manufactured in accordance with the guidelines on cGMP and in a GMP licensed facility, which can be subject to GMP inspections. 25 Table of Contents Under European Union regulatory systems, a company may not market a medicinal product without a marketing authorization.
Medicines used in clinical trials must be manufactured in accordance with the guidelines on cGMP and in a GMP licensed facility, which can be subject to GMP inspections. Under European Union regulatory systems, a company may not market a medicinal product without a marketing authorization.
We know from our experience over more than a decade that rare diseases affect individuals across all demographics, and there are clear disparities in diagnosis, access to care, and support that remain significant barriers for many.
We know from our experience over more than a decade that rare diseases affect 29 Table of Contents individuals across all demographics, and there are clear disparities in diagnosis, access to care, and support that remain significant barriers for many.
The regulatory exclusivity periods run from the date of European Commission approval. There can be no assurance that we will qualify for any such regulatory exclusivity, or that any such exclusivity will prevent competitors from seeking approval solely on the basis of their own studies. See “Government Regulation” below.
The regulatory exclusivity periods run from the date of European Commission approval. There can be no assurance that we will qualify for any such regulatory exclusivity, or that any such exclusivity will prevent competitors from seeking approval solely on the basis of their own studies.
For example, in the United States, an FDA-approved therapy may be eligible to receive five years of new chemical entity ("NCE") exclusivity or, for drugs granted an orphan designation by the FDA, seven years of orphan drug exclusivity ("Orphan Drug Exclusivity" or "ODE").
In the United States, an FDA-approved therapy may be eligible to receive five years of new chemical entity ("NCE") exclusivity for the first FDA approval of a new chemical entity or, for drugs granted an orphan designation by the FDA, seven years of orphan drug exclusivity ("Orphan Drug Exclusivity" or "ODE").
By fostering inclusivity within our workforce, we are better able to incorporate diverse viewpoints, which we believe positively influences our ability to achieve our objectives and ultimately impact patient outcomes – this is key to operating within our mission, and successfully helping the patients we aim to serve.
By fostering inclusivity and a strong sense of belonging within our workforce, we are better able to incorporate diverse viewpoints, which we believe positively influences our ability to achieve our objectives and ultimately impact patient outcomes – this is key to operating within our mission, and successfully helping the patients we aim to serve.
In September 2024, we announced a voluntary pause of enrollment in the Phase 3 HARMONY Study. The voluntary enrollment pause enables us to work to address necessary process improvements in manufacturing scale-up to support commercial scale manufacturing as well as full enrollment in the HARMONY Study.
In September 2024, we announced a voluntary pause of enrollment in the Phase 3 HARMONY Study. The voluntary enrollment pause enabled us to address necessary process improvements in manufacturing scale-up to support initial commercial scale manufacturing as well as full enrollment in the HARMONY Study.
More specifically, as of December 31, 2024, our trademark portfolio included registered U.S. and foreign trademarks for the wordmark “Travere Therapeutics” and its logo, registered U.S. and foreign trademarks relating to FILSPARI (sparsentan), registered U.S. trademarks for both the wordmark “TOTALCARE”, and its logo, a registered trademark for both the wordmark “TOTAL CARE HUB” and its logo, and a registered trademark for “In Rare for Life”.
More specifically, as of December 31, 2025, our trademark portfolio included registered U.S. and foreign trademarks for the wordmark “Travere Therapeutics” and its logo, registered U.S. and foreign trademarks relating to FILSPARI (sparsentan), registered U.S. trademarks for both the wordmark “TRAVERE TOTAL CARE”, and its logo, a registered trademark for both the wordmark “TOTAL CARE HUB” and its logo, and a registered trademark for “In Rare for Life”.
We believe that our research, development, and commercialization capabilities in rare disease represent distinct competitive advantages. We leverage our development capabilities in rare disease to focus on advancing therapeutic candidates with life-changing potential.
We believe that our research, development, and commercialization capabilities in rare disease represent distinct competitive advantages. We leverage our development 7 Table of Contents capabilities in rare disease to focus on advancing therapeutic candidates with life-changing potential.
We do this by listening to our employees through many avenues, including formal engagement initiatives, such as surveys, as well as informal listening sessions hosted by senior leaders, including our CEO and our human resources department. The response rate for our latest employee engagement survey, which was conducted in November 2024, was 84%.
We do this by listening to our employees through many avenues, including formal engagement initiatives, such as surveys, as well as informal listening sessions hosted by senior leaders, including our CEO and our human resources department. The response rate for our latest employee engagement survey, which was conducted in September 2025, was 86%.
If we were to be unsuccessful in doing so, we would expect to rely on the data and/or marketing exclusivity that may be available in the EU, as described below under “Regulatory Exclusivity.” The first Travere patent family is directed to methods of using sparsentan in the treatment of various kidney diseases, including focal segmental glomerulosclerosis (FSGS) and IgAN, e.g., by achieving a specified urine protein-to-creatinine ratio.
If we were to be unsuccessful in doing so, we would expect to rely on the data and/or marketing exclusivity that may be available in the EU, as described below under “Regulatory Exclusivity.” The first Travere patent family is directed to methods of using sparsentan in the treatment of various kidney diseases, including FSGS and IgAN, e.g., by achieving a specified UPCR.
The other five patent families are owned by Travere (the "Travere patent families"). We previously had one additional licensed patent family related to sparsentan that was owned by BMS, exclusively licensed to Ligand and sub-licensed to us by Ligand. However, the BMS patent family expired in 2019 and therefore is no longer in force.
We previously had one additional licensed patent family related to sparsentan that was owned by BMS, exclusively licensed to Ligand and sub-licensed to us by Ligand. However, the BMS patent family expired in 2019 and therefore is no longer in force.
In the European Union and European Free Trade Association ("EFTA") countries, innovative medicinal products approved by the European Commission may receive eight years of data exclusivity and 10 years of market exclusivity.
In the European Union and European Free Trade Association ("EFTA") countries, innovative medicinal products approved by the European Commission may receive eight years of data exclusivity and an additional two years of market exclusivity.
As we continue to navigate through new ways of working, we take pride in the role we play in helping to ensure our employees are as productive and engaged as possible and their physical and emotional health, well-being and safety remains a key priority.
As we continue to navigate through new ways of working, we take pride in the role we play in helping to ensure our employees are as productive and engaged as possible and their physical and emotional health, well-being and safety remains a key priority. We are committed to providing a safe and healthy working environment for our employees.
These generic versions of the original formulation of Thiola have impacted our sales, and these or additional generic versions of either formulation could have a material adverse impact on sales. As of December 31, 2024, several generic options for the 100mg and 300mg versions of Thiola EC have been approved by the FDA and become available.
These generic versions of the original formulation of Thiola have impacted our sales, and these or additional generic versions of either formulation could have a material adverse impact on sales. To date, several generic options for the 100mg and 300mg versions of Thiola EC have been approved by the FDA and become available.
Following the recent PARASOL public workshop in which a multi-stakeholder group of rare kidney disease experts aligned around a potential proteinuria-based clinical trial endpoint for FSGS, we scheduled a Type C meeting with the FDA to discuss a potential regulatory pathway for a sparsentan FSGS indication.
Following the PARASOL public workshop in the fourth quarter of 2024, in which a multi-stakeholder group of rare kidney disease experts aligned around a potential proteinuria-based clinical trial endpoint for FSGS, we scheduled a Type C meeting with the FDA to discuss a potential regulatory pathway for a 10 Table of Contents sparsentan FSGS indication.
The third Travere patent family is comprised of a pending international patent application, related to methods of treating a kidney disease or disorder comprising sparsentan, and a SGLT2 inhibitor. The fourth Travere patent family is comprised of a pending international patent application, related to methods of treating IgA mediated diseases or disorders comprising sparsentan.
The third Travere patent family is comprised of a pending international patent application, related to methods of treating a kidney disease or disorder comprising sparsentan, and a SGLT2 inhibitor.
(running from the date of full approval) to slow kidney function decline in adults with primary IgAN who are at risk for disease progression, excluding the use provided for in the aforementioned Orphan Drug Exclusivity granted in connection with the accelerated approval.
(running from the date of full approval) to slow kidney function decline in adults with primary IgAN who are at risk for disease progression, excluding the use provided for in the aforementioned Orphan Drug Exclusivity granted in connection with the accelerated approval. Thiola Thiola does not have regulatory exclusivity in the United States.
As part of the liver monitoring REMS, monthly monitoring of each patient is required for the first year the patient is on treatment, and quarterly thereafter.
Initially, as part of the liver monitoring REMS, monthly monitoring of each patient was required for the first year a patient was on treatment, and quarterly thereafter.
FSGS is a rare kidney disease and leading cause of kidney failure with no approved treatment options. In February 2025, we announced that we had completed a Type C meeting with the FDA and that we plan to submit an sNDA around the end of the first quarter of 2025 seeking traditional approval of FILSPARI for FSGS.
FSGS is a rare kidney disease and leading cause of kidney failure with no approved treatment options. In February 2025, we announced that we had completed a Type C meeting with the FDA and in March 2025, we announced that we had submitted an sNDA to the FDA seeking traditional approval of FILSPARI for the treatment of FSGS.
In April 2024, we and our partner CSL Vifor announced that the European Commission has granted conditional marketing authorization (“CMA”) for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).
In April 2024, we and our partner CSL Vifor announced that the European Commission had granted conditional marketing authorization (“CMA”) for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ("UPCR") ≥0.75 g/g), and in April 2025, we and CSL Vifor announced that the European Commission had converted the CMA into a standard marketing authorization (“MA”) for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or UPCR ≥0.75 g/g).
Our U.S. commercial initiatives are designed to support patients living with rare diseases and clinicians treating these patients. We commercialize our products in the United States with a relatively small specialty sales force. Nephrologists are the primary call point for FILSPARI.
Our U.S. commercial initiatives are designed to support patients living with rare diseases and clinicians treating these patients. We commercialize our products in the United States with a dedicated specialty sales force. Nephrologists are the primary call point for FILSPARI. The primary call points for Thiola and Thiola EC include urologists and nephrologists.
Finally, there are endothelin receptor antagonists, or ERAs, that are developed for chronic kidney disease (CKD) and CKD-related conditions which could potentially be used (if approved) in CKD patients without a specific IgAN diagnosis.
Finally, there are endothelin receptor antagonists ("ERAs") developed for CKD-related conditions that could potentially be used, if approved in CKD patients without a specific IgAN diagnosis.
The FDA has agreed to certain performance goals in the review of NDAs and BLAs. Most such applications for standard review drug products are reviewed within 10 months of filing; most applications for priority review drugs are reviewed within six months of filing.
Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs and BLAs. Most such applications for standard review drug products are reviewed within 10 months of filing; most applications for priority review drugs are reviewed within six months of filing.
The submission of most NDAs and BLAs is additionally subject to a substantial application user fee, and the sponsor of an approved NDA or BLA is also subject to an annual program user fee. These fees typically are increased annually.
The submission of most NDAs and BLAs is additionally subject to a substantial application user fee, and the sponsor of an approved NDA or BLA is also subject to an annual program user fee.
We remain responsible for the clinical development of sparsentan and will retain all rights to sparsentan in the United States and rest of world outside of the licensed territories, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada, China, Brazil and/or Mexico.
We will retain all rights to sparsentan in the United States and rest of world outside of the territories licensed to CSL Vifor and Chugai, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada and/or Mexico.
Idorsia Pharmaceuticals’ aprocitentan (branded as Tryvio in the U.S. and Jeraygo in Europe) was approved for the treatment of resistant hypertension by the FDA and EMA, in March 2024 and June 2024, respectively; the pivotal study was in patients with resistant hypertension, including those with Stage 3 & 4 CKD.
Idorsia Pharmaceuticals’ aprocitentan (branded as Tryvio in the United States and Jeraygo in Europe) was approved for the treatment of resistant hypertension by the FDA and the European Medicines Agency in March 2024 and June 2024, respectively; the pivotal study enrolled patients with resistant hypertension, including those with Stage 3 and Stage 4 CKD.
Additionally, Vertex Pharmaceuticals is conducting the Phase 3 portion of their Phase 2/3 study in adult and pediatric patients with APOL1-mediated kidney disease, which can include a subset of FSGS patients with known APOL1 mutations (G1/G1, G2/G2, or G1/G2).
Additionally, Vertex Pharmaceuticals is conducting the Phase 3 portion of their Phase 2/3 study in adult and pediatric patients with APOL1-mediated kidney disease, which can include a subset of FSGS patients with known APOL1 mutations (G1/G1, G2/G2, or G1/G2). Based on publicly available information, interim data is expected in 2026.
In the EU, medicinal products can only be commercialized after a related marketing authorization (“MA”), has been granted.
In the EU, medicinal products can only be commercialized after a related MA, has been granted.
FILSPARI is available only through a risk evaluation and mitigation strategy (REMS) approved by the FDA, regarding mandatory birth control for patients of child-bearing potential regarding risk of embryo-fetal toxicity, as has been required for other approved endothelin antagonists, and a REMS for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.
FILSPARI is available only through a risk evaluation and mitigation strategy ("REMS") approved by the FDA for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.
The draft KDIGO guidelines recommend FILSPARI as a foundational kidney-targeted therapy for IgAN patients who are at risk of progressive kidney function loss, and advocate for lowering the targeted proteinuria level for all IgAN patients to under 0.5 g/day, or preferably under 0.3 g/day.
The updated KDIGO guidelines suggest FILSPARI as a foundational kidney-targeted therapy for IgAN patients who are at risk of progressive kidney function loss and advocate for lowering targeted proteinuria levels for all IgAN patients to under 0.5 g/day, or ideally under 0.3 g/day, where achievable.
A single Phase 3 clinical trial with other confirmatory evidence may be sufficient in rare instances where the study is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and where confirmation of the result in a second Phase 3 trial would be impractical or unethical. 19 Table of Contents After completion of the required clinical testing, an NDA or BLA submission is prepared and submitted to the FDA.
A single Phase 3 clinical trial with other confirmatory evidence may be sufficient in rare instances where the study is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and where confirmation of the result in a second Phase 3 trial would be impractical or unethical.
The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold.
Orphan medicinal product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. 28 Table of Contents The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold.
Classical HCU is a rare metabolic disorder characterized by elevated levels of plasma homocysteine that can lead to vision, skeletal, circulatory and central nervous system complications. We estimate that there are approximately 7,000 to 10,000 addressable HCU patients globally.
Pegtibatinase Pegtibatinase is a novel investigational human enzyme replacement candidate being evaluated for the treatment of classical HCU. Classical HCU is a rare metabolic disorder characterized by elevated levels of plasma homocysteine that can lead to vision, skeletal, circulatory and central nervous system complications. We estimate that there are approximately 7,000 to 10,000 addressable HCU patients globally.
Additionally, although patients diagnosed with IgAN are not part of the label (nor were they included in the initial pivotal studies), Bayer’s non-steroidal mineralocorticoid receptor antagonist, Kerendia, could be used in patients with diabetic kidney disease and theoretically, those with concurrent IgAN and is currently studied in patients with chronic kidney disease without diabetes.
Additionally, although patients diagnosed with IgAN are not included in the approved label and were not enrolled in the initial pivotal studies, Bayer’s non-steroidal mineralocorticoid receptor antagonist, Kerendia, could potentially be used in patients with diabetic kidney disease and concurrent IgAN and is currently being studied in patients with CKD without diabetes.
Other Commercial Products: Thiola and Thiola EC (tiopronin) Thiola and Thiola EC are approved by the FDA for the treatment of cystinuria, a rare genetic cystine transport disorder that causes high cystine levels in the urine and the formation of recurring kidney stones.
We acquired pegtibatinase as part of the November 2020 acquisition of Orphan Technologies Limited. Other Commercial Products: Thiola and Thiola EC (tiopronin) Thiola and Thiola EC are approved by the FDA for the treatment of cystinuria, a rare genetic cystine transport disorder that causes high cystine levels in the urine and the formation of recurring kidney stones.
In April 2024, we and CSL Vifor, with whom we entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the European Commission granted conditional marketing authorization (CMA) for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).
In April 2024, we and CSL Vifor, with whom we entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the European Commission granted CMA for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or UPCR ≥0.75 g/g), and in April 2025, we and CSL Vifor announced that the European Commission had converted the CMA 18 Table of Contents into a standard MA for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or UPCR ≥0.75 g/g).
The CTR foresaw a three-year transition period that ended on January 31, 2025. Since this date, all new or ongoing trials are subject to the provisions of the CTR. In all cases, clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
Since this date, all new or ongoing trials are subject to the provisions of the CTR. 26 Table of Contents In all cases, clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review.
These fees typically are increased annually. 20 Table of Contents The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review.
FDA approval of the submission is required before marketing of the product in the United States may begin. The submission must include the results of all preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture and controls. The cost of preparing and submitting a submission is substantial.
The submission must include the results of all preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture and controls. The cost of preparing and submitting a submission is substantial.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

171 edited+78 added−42 removed428 unchanged
Biggest changeIn addition, our products, including FILSPARI, and any of our product candidates that are approved by the FDA or a comparable foreign regulatory authority, are or will be subject to extensive and ongoing regulatory requirements, including for the manufacturing, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export, recordkeeping, conduct of potential post-marketing studies and post-market submission requirements.
Biggest changeAny future regulatory approvals that sparsentan or any of our other product candidates receives may be subject to significant limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate. 38 Table of Contents In addition, our products, including FILSPARI, and any of our product candidates that are approved by the FDA or a comparable foreign regulatory authority, are or will be subject to extensive and ongoing regulatory requirements, including for the manufacturing, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export, recordkeeping, conduct of potential post-marketing studies and post-market submission requirements.
We expect that our operating results will vary significantly from quarter-to-quarter and year-to-year as a result of investments in research and development, specifically our clinical and nonclinical development activities.
We expect that our operating results will vary significantly from quarter-to-quarter and year-to-year as a result of investments in research and development, specifically our clinical and nonclinical development activities.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, "process") personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, "process") personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data (collectively, "sensitive information").
For example, the California Consumer Privacy Act of 2018 (“CCPA”), and as amended, applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices, and affords California residents certain privacy rights related to their personal data, such as those noted herein.
For example, the California Consumer Privacy Act of 2018 (“CCPA”), as amended, applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices, and affords California residents certain privacy rights related to their personal data, such as those noted herein.
In addition, privacy advocates and industry groups around the world have proposed, and may propose, standards with which we are legally or contractually bound to comply, or may become subject to in the future. We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
In addition, privacy advocates and industry groups around the world have proposed, and may propose, standards with which we are legally or contractually bound to comply, and may become subject to in the future. We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
We may experience numerous unforeseen events during, or as a result of, preclinical or nonclinical testing and the clinical trial process that could delay or prevent our ability to obtain, or impact our willingness to pursue, regulatory approval or commercialize our product candidates, including: • our preclinical or nonclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical testing or clinical trials or we may abandon projects that we expect to be clinically promising in light of cost or strategic considerations; • regulators may require us to conduct studies of the long-term effects associated with the use of our product candidates; • regulators, institutional review boards or ethics committees may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; • the FDA or any non-United States regulatory authority may impose conditions on us regarding the scope or design of our clinical trials or may require us to resubmit our clinical trial protocols to institutional review boards or ethics committees for re-inspection due to changes in the regulatory environment; • the number of patients required for our clinical trials may be larger than we anticipate or participants may drop out of our clinical trials at a higher rate than we anticipate; • our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; • we might have to suspend, vary or terminate one or more of our clinical trials if we, regulators or institutional review boards or ethics committees determine that the participants are being exposed to unacceptable health risks; • regulators, institutional review boards or ethics committees may require that we hold, suspend, vary or terminate clinical research for various reasons, including noncompliance with regulatory requirements; • the cost of our clinical trials or the anticipated commercialization costs may be greater than we anticipate; 34 Table of Contents • the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate, or more expensive than we originally anticipated, or we may not be able to reach agreements on acceptable terms with prospective suppliers or clinical research organizations; and • the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
We may experience numerous unforeseen events during, or as a result of, preclinical or nonclinical testing and the clinical trial process that could delay or prevent our ability to obtain, or impact our willingness to pursue, regulatory approval or commercialize our product candidates, including: • our preclinical or nonclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical testing or clinical trials or we may abandon projects that we expect to be clinically promising in light of cost or strategic considerations; • regulators may require us to conduct studies of the long-term effects associated with the use of our product candidates; • regulators, institutional review boards or ethics committees may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; • the FDA or any non-United States regulatory authority may impose conditions on us regarding the scope or design of our clinical trials or may require us to resubmit our clinical trial protocols to institutional review boards or ethics committees for re-inspection due to changes in the regulatory environment; • the number of patients required for our clinical trials may be larger than we anticipate or participants may drop out of our clinical trials at a higher rate than we anticipate; • our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; • we might have to suspend, vary or terminate one or more of our clinical trials if we, regulators or institutional review boards or ethics committees determine that the participants are being exposed to unacceptable health risks; • regulators, institutional review boards or ethics committees may require that we hold, suspend, vary or terminate clinical research for various reasons, including noncompliance with regulatory requirements; • the cost of our clinical trials or the anticipated commercialization costs may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate, or more expensive than we originally anticipated, or we may not be able to reach agreements on acceptable terms with prospective suppliers or clinical research organizations; and • the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
Events of default include, but are not limited to: • failure to pay (for more than 30 days) interest when due; • failure to pay principal when due; • failure to deliver shares of common stock upon conversion of a 2025 Note or 2029 Note; • failure to provide notice of a fundamental change; • acceleration on our other indebtedness in excess of $10 million (other than indebtedness that is non-recourse to us); or • certain types of bankruptcy or insolvency involving us.
Events of default include, but are not limited to: • failure to pay (for more than 30 days) interest when due; • failure to pay principal when due; • failure to deliver shares of common stock upon conversion of a 2029 Note; • failure to provide notice of a fundamental change; • acceleration on our other indebtedness in excess of $10 million (other than indebtedness that is non-recourse to us); or • certain types of bankruptcy or insolvency involving us.
Our product candidates may fail to obtain regulatory approval for many reasons, including: • our failure to demonstrate to the satisfaction of the FDA or comparable regulatory authorities that a product candidate is safe and effective for a particular indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable regulatory authorities for approval; • our inability to demonstrate that a product candidate’s benefits outweigh its risks; • our inability to demonstrate that the product candidate presents an advantage over existing therapies; • the FDA’s or comparable regulatory authorities’ disagreement with the manner in which we interpret the data from nonclinical studies or clinical trials; • failure of the third-party manufacturers with which we contract for clinical or commercial supplies to satisfactorily complete an FDA or comparable foreign regulatory authority pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s cGMP regulations or comparable foreign regulatory authority requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and 53 Table of Contents • a change in the approval policies or regulations of the FDA or comparable regulatory authorities or a change in the laws governing the approval process.
Our product candidates may fail to obtain regulatory approval for many reasons, including: • our failure to demonstrate to the satisfaction of the FDA or comparable regulatory authorities that a product candidate is safe and effective for a particular indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable regulatory authorities for approval; • our inability to demonstrate that a product candidate’s benefits outweigh its risks; • our inability to demonstrate that the product candidate presents an advantage over existing therapies; • the FDA’s or comparable regulatory authorities’ disagreement with the manner in which we interpret the data from nonclinical studies or clinical trials; • failure of the third-party manufacturers with which we contract for clinical or commercial supplies to satisfactorily complete an FDA or comparable foreign regulatory authority pre-approval inspection of the facility or facilities at which the product is manufactured to assess 56 Table of Contents compliance with the FDA’s cGMP regulations or comparable foreign regulatory authority requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and • a change in the approval policies or regulations of the FDA or comparable regulatory authorities or a change in the laws governing the approval process.
In addition, inflation and global supply chain disruptions, as well as past disruptions related to COVID-19 and potential future disruptions related to a future health epidemic or pandemic, wars, armed conflicts, and global geopolitical tension, including between the U.S. and China, have had and may continue to have a negative impact on our manufacturers’ ability to acquire the materials necessary for our business.
In addition, inflation and global supply chain disruptions, as well as past disruptions related to COVID-19 and potential future disruptions related to a future health epidemic or pandemic, wars, armed conflicts, tariffs and global geopolitical tension, including between the U.S. and China, have had and may continue to have a negative impact on our manufacturers’ ability to acquire the materials necessary for our business.
In addition, we may from time to time seek to retire or purchase our outstanding debt, including the 2025 Notes or 2029 Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
In addition, we may from time to time seek to retire or purchase our outstanding debt, including the 2029 Notes, through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors.
As part of the NDA review process for sparsentan for IgAN, the FDA required us to include a REMS and a boxed warning on the label regarding mandatory birth control for patients of child-bearing potential regarding risk of embryo-fetal toxicity, as has been required for other approved endothelin antagonists, and a REMS and boxed warning on the label for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.
As part of the NDA review process for sparsentan for IgAN, the FDA initially required us to include a REMS and a boxed warning on the label regarding mandatory birth control for patients of child-bearing potential regarding risk of embryo-fetal toxicity, as has been required for certain other approved endothelin antagonists, and a REMS and boxed warning on the label for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.
If we do not generate sufficient cash from operations, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of our debt, including the 2025 Notes and 2029 Notes, on or before maturity.
If we do not generate sufficient cash from operations, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional debt or equity capital or restructure or refinance all or a portion of our debt, including the 2029 Notes, on or before maturity.
FILSPARI had previously been granted accelerated approval in February 2023 based on the surrogate marker of proteinuria. As a product for a rare disease that had no previously-approved non-immunosuppressive treatment, the successful launch and commercialization of FILSPARI is subject to many risks.
FILSPARI had previously been granted accelerated approval for IgAN in February 2023 based on the surrogate marker of proteinuria. As a product for a rare disease that had no previously-approved non-immunosuppressive treatment, the successful launch and commercialization of FILSPARI is subject to many risks.
In November 2020, a third party filed an opposition to our second European patent (European Patent No. EP3222277, “the ‘277 EP Patent”), in the European Patent Office ("EPO"). While we are vigorously defending the ‘277 EP Patent against the opposition, there is no guarantee that we will be successful in doing so.
In November 2020, a third party filed an opposition to our second European patent (European Patent No. EP3222277, “the ‘277 EP Patent”), in the EPO. While we are vigorously defending the ‘277 EP Patent against the opposition, there is no guarantee that we will be successful in doing so.
We may be unable to raise the funds necessary to repurchase the 2025 Notes and 2029 Notes for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our future indebtedness may limit our ability to repurchase the 2025 Notes and 2029 Notes or pay cash upon their conversion.
We may be unable to raise the funds necessary to repurchase the 2029 Notes for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our future indebtedness may limit our ability to repurchase the 2029 Notes or pay cash upon their conversion.
Noteholders may require us to repurchase their 2025 Notes and 2029 Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the 2025 Notes and 2029 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
Noteholders may require us to repurchase their 2029 Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
In 2018 we initiated the Phase 3 DUPLEX Study and the Phase 3 PROTECT Study. We initiated the DUPLEX Study and the PROTECT Study under the Subpart H pathway for potential accelerated approval in the United States, and potential conditional marketing authorization in the EU, in both jurisdictions based on change in proteinuria.
In 2018 we initiated the Phase 3 DUPLEX Study under the Subpart H pathway for potential accelerated approval in the United States, and potential conditional marketing authorization in the EU, in both jurisdictions based on change in proteinuria.
As a result of our indebtedness, a portion of our cash flow will be required to pay interest and principal on the 2025 Notes and 2029 Notes if the notes are not converted to shares of common stock prior to maturity.
As a result of our indebtedness, a portion of our cash flow will be required to pay interest and principal on the 2029 Notes if the notes are not converted to shares of common stock prior to maturity.
In addition, applicable law, regulatory authorities and the agreements governing our future indebtedness may restrict our ability to repurchase the 2025 Notes and 2029 Notes or pay the cash amounts due upon conversion of the 2025 Notes and 2029 Notes.
In addition, applicable law, regulatory authorities and the agreements governing our future indebtedness may restrict our ability to repurchase the 2029 Notes or pay the cash amounts due upon conversion of the 2029 Notes.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to any other debt we may incur in the future; • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and related interest, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; 61 Table of Contents • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increase our cost of borrowing; • place us at a competitive disadvantage compared to our competitors that may have less debt; and • limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to any other debt we may incur in the future; • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and related interest, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increase our cost of borrowing; • place us at a competitive disadvantage compared to our competitors that may have less debt; and • limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes.
In October 2024, we received an invoice from the government authority for approximately €5.6 million (approximately $6.2 million), which we paid while we continue to pursue an appeal of the decision and the amount paid.
In October 2024, we received an invoice from the government authority for approximately $6.2 million, which we paid while we continue to pursue an appeal of the decision and the amount paid.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any product candidates or products that we may develop; • damage to our reputation; • regulatory investigations that could require costly recalls or product modifications; • withdrawal of clinical trial participants; • costs to defend the related litigation; • substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future; • loss of revenue; • the diversion of management’s attention from managing our business; 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; • damage to our reputation; • regulatory investigations that could require costly recalls or product modifications; • withdrawal of clinical trial participants; • costs to defend the related litigation; • substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future; • loss of revenue; • the diversion of management’s attention from managing our business; and 53 Table of Contents • the inability to commercialize any products that we may develop.
Our product FILSPARI is covered by U.S. Patent No. 6,638,937, which expired in 2019 and to which we have an exclusive license. In addition, U.S. Patent No. 9,662,312, to which we also have an exclusive license and which was granted on May 30, 2017 and expires in 2030, covers the use of sparsentan for treating glomerulosclerosis, including FSGS. U.S.
Our product FILSPARI was covered by U.S. Patent No. 6,638,937, which expired in 2019 and to which we had an exclusive license. In addition, U.S. Patent No. 9,662,312, to which we also have an exclusive license and which was granted on May 30, 2017 and expires in 2030, covers the use of sparsentan for treating glomerulosclerosis, including FSGS. U.S.
Many pharmaceutical and other health care companies have been investigated and have reached substantial financial settlements with the federal government under the federal False Claims Act for a variety of alleged marketing activities, including providing free product to customers with the expectation that the customers would bill federal programs for the product; providing consulting fees, grants, free travel, and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices reported to private price 51 Table of Contents publication services, which may be used by states to set drug payment rates under government health care programs.
Many pharmaceutical and other health care companies have been investigated and have reached substantial financial settlements with the federal government under the federal False Claims Act for a variety of alleged marketing activities, including providing free product to customers with the expectation that the customers would bill federal programs for the product; providing consulting fees, grants, free travel, and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices reported to private price publication services, which may be used by states to set drug payment rates under government health care programs.
To the extent we issue shares of common stock upon conversion of the 2025 Notes or 2029 Notes, the conversion of some or all of the 2025 Notes or 2029 Notes will dilute the ownership interests of existing stockholders.
To the extent we issue shares of common stock upon conversion of the 2029 Notes, the conversion of some or all of the 2029 Notes will dilute the ownership interests of existing stockholders.
The voluntary enrollment pause was enacted following our determination that the desired drug substance profile was not achieved in the recent scale-up process. From time to time we continue to, and may in the future, face supply challenges or shortages of other materials necessary to manufacture pegtibatinase or our other products and product candidates.
The voluntary enrollment pause was enacted following our determination that the desired drug substance profile was not achieved in the initial scale-up process. From time to time we continue to, and may in the future, face supply challenges or shortages of other materials necessary to manufacture pegtibatinase or our other products and product candidates.
If we or our partners are unable to maintain favorable pricing and reimbursement status in EU Member States for product candidates that we or our partners may successfully develop and for which we or our partners may obtain regulatory approval, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected.
If we or our partners are unable to maintain favorable pricing and reimbursement status in EU Member States for drug candidates that we or our partners may successfully develop and for which we or our partners may obtain regulatory approval, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected.
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including shutdown of 44 Table of Contents the third-party vendor or invalidation of drug product lots or processes, fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approval of our product candidates, delays, suspension, variation or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect regulatory approval and supplies of our product candidates.
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including shutdown of the third-party vendor or invalidation of drug product lots or processes, fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approval of our product candidates, delays, suspension, variation or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect regulatory approval and supplies of our product candidates.
If an event of default under the 2025 Notes or 2029 Notes occurs, the principal amount of the 2025 Notes or the 2029 Notes, as applicable, plus accrued and unpaid interest (including additional interest, if any) may be declared immediately due and payable, subject to certain conditions set forth in the indenture governing such notes.
If an event of default under the 2029 Notes occurs, the principal amount of the 2029 Notes, as applicable, plus accrued and unpaid interest (including additional interest, if any) may be declared immediately due and payable, subject to certain conditions set forth in the indenture governing such notes.
Other various state level requirements include restricting payments or the provision of other items of value that may be made to healthcare providers and other potential referral sources; restricting various marketing practices; requiring prescription drug companies to report expenses relating to the marketing and promotion of drug products; requiring the posting of information relating to clinical studies and their outcomes; requiring the registration of sales representatives; 52 Table of Contents requiring the reporting of certain information related to drug pricing; and requiring drug manufacturers to track and report information related to payments, gifts, compensation, and other items of value to physicians and other healthcare providers.
Other various state level requirements include restricting payments or the provision of other items of value that may be made to healthcare providers and other potential referral sources; restricting various marketing practices; requiring prescription drug companies to report expenses relating to the marketing and promotion of drug products; requiring the posting of information relating to clinical studies and their outcomes; requiring the registration of sales representatives; requiring the reporting of certain information related to drug pricing; and requiring drug manufacturers to track and report information related to payments, gifts, compensation, and other items of value to physicians and other healthcare providers.
We have obtained limited product liability insurance coverage for our clinical trials in the amount of $10 million per occurrence and $30 million in the aggregate. However, our insurance may not reimburse us or may not be sufficient to reimburse us for any expenses or losses we may suffer.
We have obtained limited product liability insurance coverage for our clinical trials in the amount of $10 million per occurrence and $35 million in the aggregate. However, our insurance may not reimburse us or may not be sufficient to reimburse us for any expenses or losses we may suffer.
Upon the occurrence of certain transactions constituting a fundamental change, holders of the 2025 Notes and 2029 Notes will have the right, at their option, to require us to repurchase all of their 2025 Notes and 2029 Notes or any portion of the principal amount of such Notes in integral multiples of $1,000.
Upon the occurrence of certain transactions constituting a fundamental change, holders of the 2029 Notes will have the right, at their option, to require us to repurchase all of their 2029 Notes or any portion of the principal amount of such Notes in integral multiples of $1,000.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and, due to subsequent legislative amendments, will stay in effect until 2032 unless additional Congressional action is taken.
Additionally, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and, due to subsequent legislative amendments, will stay in effect until 2032 unless additional Congressional action is taken.
We may also be required to increase the conversion rate for conversions in connection with certain fundamental changes. Conversion of the Notes may dilute the ownership interest of existing stockholders, including holders who had previously converted their 2025 Notes or 2029 Notes.
We may also be required to increase the conversion rate for conversions in connection with certain fundamental changes. Conversion of the Notes may dilute the ownership interest of existing stockholders, including holders who had previously converted their 2029 Notes.
Additionally, in September 2024, we announced a voluntary pause of enrollment in the Phase 3 HARMONY Study to enable us to work to address necessary process improvements in manufacturing scale-up to support commercial scale manufacturing as well as full enrollment in the HARMONY Study.
Additionally, in September 2024, we announced a voluntary pause of enrollment in the Phase 3 HARMONY Study to enable us to address necessary process improvements in manufacturing scale-up to support initial commercial scale manufacturing as well as full enrollment in the HARMONY Study.
We may not generate sufficient cash flow from operations or have future borrowings available to enable us to repay our indebtedness or to fund other liquidity needs. Our indebtedness pursuant to the 2025 Notes and 2029 Notes could have important consequences.
We may not generate sufficient cash flow from operations or have future borrowings available to enable us to repay our indebtedness or to fund other liquidity needs. Our indebtedness pursuant to the 2029 Notes could have important consequences.
In addition, we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources. 60 Table of Contents Furthermore, investor perceptions of our company may suffer as a result of any material weakness in our internal controls, and this could cause a decline in the market price of our stock.
In addition, we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources. Furthermore, investor perceptions of our company may suffer as a result of any material weakness in our internal controls, and this could cause a decline in the market price of our stock.
In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised. 56 Table of Contents While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised. While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
In addition, recommendations or guidelines may not be followed by patients, healthcare providers or payors, and thus any such positive recommendations or guidelines may not have a positive impact on the use of our products.
In addition, recommendations or guidelines may not be followed by patients, healthcare providers or payers, and thus any such positive recommendations or guidelines may not have a positive impact on the use of our products.
We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2025 Notes and 2029 Notes or pay the cash amounts due upon conversion of the 2025 Notes and 2029 Notes.
We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2029 Notes or pay the cash amounts due upon conversion of the 2029 Notes.
The potential lack of D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business. 47 Table of Contents We may need substantial funding and may be unable to raise capital when needed.
The potential lack of D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business. We may need substantial funding and may be unable to raise capital when needed.
Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance.
Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments or risk assessments. These state laws allow for statutory fines for noncompliance.
Despite our efforts to retain valuable employees, members of our management, scientific, development and commercial teams may terminate their employment with us on short notice. All of our employees have at-will employment, which means that they could leave our employment at any time, with or without notice.
Despite our 49 Table of Contents efforts to retain valuable employees, members of our management, scientific, development and commercial teams may terminate their employment with us on short notice. All of our employees have at-will employment, which means that they could leave our employment at any time, with or without notice.
While our directors and officers are included in a director and officer liability insurance policy ("D&O insurance"), which covers all our directors and officers in some circumstances, our insurance coverage does not cover all of our indemnification obligations and may not be adequate to cover any indemnification or other claims against us.
While our directors and officers are included in a director and officer liability insurance policy ("D&O insurance"), which covers all our directors and officers in 50 Table of Contents some circumstances, our insurance coverage does not cover all of our indemnification obligations and may not be adequate to cover any indemnification or other claims against us.
If the third parties that we engage to manufacture products for our developmental or commercial products should halt or cease to continue to do so for any reason, we likely would experience interruptions in cash flows and/or delays in advancing our clinical trials while we identify and qualify replacement suppliers, and we may be unable to obtain replacement supplies on terms that are favorable to us.
If the third parties that we engage to manufacture products for our 46 Table of Contents developmental or commercial products should halt or cease to continue to do so for any reason, we likely would experience interruptions in cash flows and/or delays in advancing our clinical trials while we identify and qualify replacement suppliers, and we may be unable to obtain replacement supplies on terms that are favorable to us.
Because no non-immunosuppressive product had previously been approved by the FDA for the treatment of 29 Table of Contents IgAN, it is difficult to estimate FILSPARI ’s market potential or the time it will take to increase patient and physician awareness of FILSPARI and change current treatment paradigms.
Because no non-immunosuppressive product had previously been approved by the FDA for the treatment of IgAN, it is difficult to estimate FILSPARI ’s market potential or the time it will take to increase patient and physician awareness of FILSPARI and change current treatment paradigms.
Upon 31 Table of Contents receipt of a paragraph IV notice, the Hatch-Waxman Act allows the patent holder, with proper basis, to bring an action for patent infringement against the ANDA filer, asking that the proposed generic product not be approved until after the patent expires.
Upon receipt of a paragraph IV notice, the Hatch-Waxman Act allows the patent holder, with proper basis, to bring an action for patent infringement against the ANDA filer, asking that the proposed generic product not be approved until after the patent expires.
Additionally, where an AI/ML model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model. Moreover, AI/ML models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.
Additionally, where an AI/ML model ingests personal data and makes connections using such data, those technologies may 60 Table of Contents reveal other personal or sensitive information generated by the model. Moreover, AI/ML models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.
If we encounter such distribution problems, and we are unable to quickly enter into a similar agreement with another distributor on 32 Table of Contents substantially similar terms, distribution of FILSPARI and/or Thiola could become disrupted, resulting in lost revenues, provider dissatisfaction, and/or patient dissatisfaction.
If we encounter such distribution problems, and we are unable to quickly enter into a similar agreement with another distributor on substantially similar terms, distribution of FILSPARI and/or Thiola could become disrupted, resulting in lost revenues, provider dissatisfaction, and/or patient dissatisfaction.
These disruptions can result in severely diminished liquidity and credit availability, increase in inflation, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.
These disruptions can result in severely diminished liquidity and credit availability, increased inflation, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recessions and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.
Even though we have been awarded orphan drug designation in the United States and the EU for 33 Table of Contents sparsentan for the treatment of IgAN and FSGS and for pegtibatinase for the treatment of HCU, we may not be able to maintain it in the EU and the orphan drug designation may not result in orphan drug exclusivity in the United States for FSGS or the EU if approved.
Even though we have been awarded orphan drug designation in the United States and the EU for sparsentan for the treatment of IgAN and FSGS and for pegtibatinase for the treatment of HCU, we may not be able to maintain it in the EU and the orphan drug designation may not result in orphan drug exclusivity in the United States for FSGS or the EU if approved.
While we cannot predict the broader consequences, the conflict and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.
While we cannot predict the broader consequences, the conflict and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations. 66 Table of Contents ITEM 1B.
We rely on the manufacturers of our products and product candidates to purchase from third-party suppliers the materials necessary to produce the compounds for our nonclinical and clinical studies and rely on these other manufacturers for commercial distribution if we obtain marketing approval for any of our product candidates.
We rely on the manufacturers of our products and product candidates to purchase from third-party suppliers the materials necessary to produce the compounds or biologic substances for our nonclinical and clinical studies and rely on these other manufacturers for commercial distribution if we obtain marketing approval for any of our product candidates.
Nonclinical testing is expensive, difficult to design and implement, and can take many years to complete. In addition, during the clinical development 35 Table of Contents process, additional nonclinical toxicology studies are routinely conducted concurrently with the clinical development of a product candidate.
Nonclinical testing is expensive, difficult to design and implement, and can take many years to complete. In addition, during the clinical development process, additional nonclinical toxicology studies are routinely conducted concurrently with the clinical development of a product candidate.
Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding marketing authorization application. The criteria are essentially the same as those in the EU, but have been tailored for the market. This includes the criterion that prevalence of the condition in Great Britain, rather than the EU, must not be more than five in 10,000.
Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding marketing authorization application. The criteria are essentially the same as those in the EU, but have been tailored for the market. This includes the criterion that prevalence of the condition in the United Kingdom, rather than the EU, must not be more than five in 10,000.
More detailed information is available under the heading “Competition” in Item 1 of Part I of this Annual Report on Form 10-K. 43 Table of Contents Furthermore, competitors could enter the market with generic versions of our products.
More detailed information is available under the heading “Competition” in Item 1 of Part I of this Annual Report on Form 10-K. Furthermore, competitors could enter the market with generic versions of our products.
Additionally, the civil monetary penalties statute imposes penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
Additionally, the civil monetary penalties statute imposes penalties against any person or entity that, among other things, is determined to have 54 Table of Contents presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
Certain provisions of the 2025 Notes and 2029 Notes could make it more difficult or more expensive for a third party to acquire us.
Certain provisions of the 2029 Notes could make it more difficult or more expensive for a third party to acquire us.
All existing EU marketing authorizations for centrally authorized products were automatically converted or grandfathered into UK marketing authorization, effective in Great Britain only, free of charge on January 1, 2021, unless the marketing authorization holder opted-out of this possibility. Northern Ireland currently remains within the scope of EU authorizations in relation to centrally authorized medicinal products.
All existing EU marketing authorizations for centrally authorized products were automatically converted or grandfathered into UK marketing authorization, effective in Great Britain only, free of charge on January 1, 2021, unless the marketing authorization holder opted-out of this possibility. Northern Ireland remained within the scope of EU authorizations in relation to centrally authorized medicinal products until January 1, 2025.
We also do not know how physicians, patients and payers will respond to the pricing of FILSPARI, the updated, full approval label, clinical practice guidelines and any future changes thereto, and any future publications in an evolving treatment landscape.
We also do not know how physicians, patients and payers will respond to the pricing of FILSPARI, the updated, full approval label, clinical practice guidelines and any future changes thereto, developments related to competitive products, and any future publications in an evolving treatment landscape.
Upon the grant of a marketing authorization with orphan status, the medicinal product will benefit from up to 10 years of market exclusivity from similar products in the approved orphan indication. The start of this market exclusivity period will be set from the date of first approval of the product in Great Britain.
Upon the grant of a marketing authorization with orphan status, the medicinal product will benefit from up to 10 years of market exclusivity from similar products in the approved orphan indication. The start of this market exclusivity period will be set from the date of first approval of the product in the United Kingdom.
Finally, Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.
Finally, Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.
Our future capital requirements will depend on many factors, including: • the timing, progress, cost and results of our clinical trials, preclinical studies and other discovery and research and development activities; • the timing of, and costs involved in, seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products; • the timing of, and costs involved in, commercial activities, including product marketing, sales and distribution; • our ability to successfully commercialize FILSPARI for the treatment of IgAN, and to obtain regulatory approval for, and successfully commercialize, sparsentan for FSGS and our other or future product candidates; • increases or decreases in revenue from our marketed products, including decreases resulting from generic entrants or health epidemics or pandemics; • debt service obligations on the 2025 Notes and 2029 Notes; • the number and development requirements of other product candidates that we pursue; • our ability to manufacture sufficient quantities of our products to meet expected demand; • the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property related claims; • our ability to enter into collaboration, licensing or distribution arrangements and the terms and timing of these arrangements; • the potential need to expand our business, resulting in additional payroll and other overhead expenses; • the potential in-licensing of other products or technologies; • the emergence of competing products and technologies and other adverse market developments; • the extent to which we acquire or invest in businesses, products and technologies; and • the potential impacts of inflation and resulting cost increases. 48 Table of Contents The market price for shares of our common stock may be volatile and purchasers of our common stock could incur substantial losses.
Our future capital requirements will depend on many factors, including: • the timing, progress, cost and results of our clinical trials, preclinical studies and other discovery and research and development activities; • the timing of, and costs involved in, seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products; • the timing of, and costs involved in, commercial activities, including product marketing, sales and distribution; • our ability to successfully commercialize FILSPARI for the treatment of IgAN, and to obtain regulatory approval for, and successfully commercialize, sparsentan for FSGS and our other or future product candidates; • increases or decreases in revenue from our marketed products, including decreases resulting from generic entrants or health epidemics or pandemics; • debt service obligations on the 2029 Notes; • the number and development requirements of other product candidates that we pursue; • our ability to manufacture sufficient quantities of our products to meet expected demand; • the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property related claims; • our ability to enter into collaboration, licensing or distribution arrangements and the terms and timing of these arrangements; • the potential need to expand our business, resulting in additional payroll and other overhead expenses; • the potential in-licensing of other products or technologies; 51 Table of Contents • the emergence of competing products and technologies and other adverse market developments; • the extent to which we acquire or invest in businesses, products and technologies; and • the potential impacts of inflation and resulting cost increases.
Further, certain states require implementation of commercial compliance programs and marketing codes, compliance with the pharmaceutical industry’s voluntary compliance guidelines, and compliance with the applicable compliance guidance promulgated by the federal government.
Further, certain states require implementation of commercial compliance programs and marketing codes, compliance with the pharmaceutical industry’s voluntary compliance 55 Table of Contents guidelines, and compliance with the applicable compliance guidance promulgated by the federal government.
In September 2024, we announced a voluntary pause of enrollment in the Phase 3 HARMONY Study evaluating pegtibatinase for the treatment of classical homocystinuria (HCU). The voluntary enrollment pause enables us to work to address necessary process improvements in manufacturing scale-up to support commercial scale manufacturing as well as full enrollment in the HARMONY Study.
In September 2024, we announced a voluntary pause of enrollment in the Phase 3 HARMONY Study evaluating pegtibatinase for the treatment of classical HCU. The voluntary enrollment pause enabled us to address necessary process improvements in manufacturing scale-up to support the initial commercial scale manufacturing as well as full enrollment in the HARMONY Study.
U.S. our federal net operating losses ("NOLs") generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOL carryforwards in a taxable year is limited to 80% of taxable income in such year. As of December 31, 2024, we had federal NOL carryforwards of $223.8 million.
Our U.S. federal net operating losses ("NOLs") generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOL carryforwards in a taxable year is limited to 80% of taxable income in such year. As of December 31, 2025, we had federal NOL carryforwards of $232.6 million.
Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
Moreover, despite our efforts, our 58 Table of Contents personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
If these rules or other climate-related disclosures rules become effective, they may significantly increase our compliance and reporting costs and may also result in disclosures that certain investors or other stakeholders deem to negatively impact our reputation and/or that harm our stock price.
If other climate-related disclosure rules or other ESG rules become effective or become applicable to us, they may significantly increase our compliance and reporting costs and may also result in disclosures that certain investors or other stakeholders deem to negatively impact our reputation and/or that harm our stock price.
Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
Accordingly, the occurrence of a default under the 2025 Notes or 2029 Notes, unless cured or waived, may have a material adverse effect on our results of operations. 62 Table of Contents Provisions of the 2025 Notes and 2029 Notes could discourage an acquisition of us by a third party.
Accordingly, the occurrence of a default under the 2029 Notes, unless cured or waived, may have a material adverse effect on our results of operations. Provisions of the 2029 Notes could discourage an acquisition of us by a third party.
There is an increasing focus from certain investors, employees, partners, and other stakeholders concerning ESG matters. While we have internal efforts directed at ESG matters and preparations for increased future disclosures, we may be perceived by certain stakeholders as not acting responsibly in connection with these matters, which could negatively impact us.
In recent years, there has been an increased focus from certain investors, employees, partners, and other stakeholders concerning ESG matters. While we have internal efforts directed at ESG matters and preparations for potential increased future disclosures, we may be perceived by certain stakeholders as not acting responsibly in connection with these matters, which could negatively impact us.
In addition, we must continually train our sales force to ensure that a consistent and appropriate message about our products is being delivered to our potential customers.
In addition, we must continually train our sales force to ensure that a consistent and appropriate message about our products is 31 Table of Contents being delivered to our potential customers.
As these concerns continue to grow over the need for tighter oversight, there remains the possibility that the Heath Resources and Services Administration or another agency under the U.S. Department of Health and Human Services ("HHS") will propose regulations or that Congress will explore changes to the 340B program through legislation.
As these concerns continue to grow over the need for tighter oversight, there remains the possibility that the Heath Resources and Services Administration or another agency under the HHS will propose regulations or that Congress will explore changes to the 340B program through legislation.
If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; loss of customer, investor or partner confidence in the effectiveness of our cybersecurity measures; monetary fund diversions; the expenditure of significant capital and other resources; diversion of management attention; interruptions in our operations (including availability of data); financial loss and other similar harms.
Any incidents or perceived incidents involving our systems (or those of a third party with whom we work) may lead to adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; loss of customer, investor or partner confidence in the effectiveness of our cybersecurity measures; monetary fund diversions; the expenditure of significant capital and other resources; diversion of management attention; interruptions in our operations (including availability of data); financial loss and other similar harms.
The Regulation foresees a three-year transitional period and will permit EU Member States to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
The Regulation permits EU Member States to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • we or our licensors were the first to make the inventions covered by each of our pending patent applications; • we or our licensors were the first to file patent applications for these inventions; • others will not independently develop similar or alternative technologies or duplicate any of our technologies; • any patents issued to us or our licensors that provide a basis for commercially viable products will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies that are patentable; • we will file patent applications for new proprietary technologies promptly or at all; • the claims we make in our patents will be upheld by patent offices in the United States and elsewhere; • our patents will not expire prior to or shortly after commencing commercialization of a product; and • the patents of others will not have a negative effect on our ability to do business. 40 Table of Contents We have negotiated a license agreement with Ligand Pharmaceuticals for the rights to sparsentan which we are initially developing for the treatment of IgAN and FSGS.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • we or our licensors were the first to make the inventions covered by each of our pending patent applications; • we or our licensors were the first to file patent applications for these inventions; • others will not independently develop similar or alternative technologies or duplicate any of our technologies; • any patents issued to us or our licensors that provide a basis for commercially viable products will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies that are patentable; • we will file patent applications for new proprietary technologies promptly or at all; • the claims we make in our patents will be upheld by patent offices in the United States and elsewhere; • our patents will not expire prior to or shortly after commencing commercialization of a product; and • the patents of others will not have a negative effect on our ability to do business.
In addition, such delays could allow our competitors to bring products to market before we do and impair our ability to commercialize our products or product candidates.
In 36 Table of Contents addition, such delays could allow our competitors to bring products to market before we do and impair our ability to commercialize our products or product candidates.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in 59 Table of Contents place.
These threats are becoming increasingly difficult to detect. These threats come from a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), "hacktivists", organized criminal threat actors, sophisticated nation-states, and nation-state-supported actors.
These threats come from a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), "hacktivists", organized criminal threat actors, sophisticated nation-states, and nation-state-supported actors.
Similar laws are being considered in several other states, as well as at the local level, and we expect more jurisdictions to pass similar laws in the future. In addition, numerous U.S. states—including but not limited to Connecticut, Nevada and Washington—have enacted new laws governing the privacy of consumer health data.
Similar laws are being considered in several other states, as well as at the local level, and we expect more jurisdictions to pass similar laws in the future. In addition, numerous U.S. states have enacted new laws governing the privacy of consumer health data.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor example, cybersecurity risk is addressed as a component of our enterprise risk management program, and members of our management team, IT department and other relevant team members work together to prioritize our risk management processes, mitigate cybersecurity threats that are more likely to lead to a material impact to our business, and report regularly to our board of directors on cybersecurity matters.
Biggest changeCybersecurity risk is addressed as part of our overall risk governance framework, and members of our management team, IT department and other relevant functional teams collaborate to prioritize risk mitigation efforts, address threats that may have a material impact on our business, and report regularly to our board of directors on cybersecurity matters.
We manage, identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and risk profile using various methods including, for example: through the use of automated tools in certain environments, including but not limited to tools for monitoring, geolocation, remote wiping, threat detection, intrusion detection and prevention (including through the use of machine learning, a form of artificial intelligence), patch management, distributed denial of service (DDoS) protection and forensics; conducting (directly or through third parties) regular audits and threat assessments for internal and external threats; subscribing to reports and services that identify cybersecurity threats; analyzing reports of certain threats and actors; conducting vulnerability assessments in certain environments to identify vulnerabilities; evaluating our and our industry’s risk profile; conducting tabletop incident response exercises; and evaluating certain threats reported to us.
We manage, identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and risk profile using various methods including, for example: through the use of automated tools in certain environments, including but not limited to tools for monitoring, geolocation, remote wiping, threat detection, intrusion detection and prevention (including through the use of machine learning, a form of artificial intelligence), patch management, distributed denial of service ("DDoS") protection and forensics; conducting (directly or through third parties) regular audits and threat assessments for internal and external threats; subscribing to reports and services that identify cybersecurity threats; analyzing reports of certain threats and actors; conducting vulnerability assessments in certain environments to identify vulnerabilities; evaluating our and our industry’s risk profile; conducting routine tabletop incident response exercises; and evaluating certain threats reported to us.
Risk Factors in this Annual Report on Form 10-K, including the risk factor captioned “If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions; litigation; fines and penalties; interruptions to our commercial operations, clinical trials or other operations; harm to our reputation; loss of revenue or profits; loss of sales and other adverse consequences.” Governance Our Nominating / Corporate Governance Committee has oversight of our cybersecurity risk management program and reports to our board of directors on cybersecurity matters.
Risk Factors in this Annual Report on Form 10-K, including the risk factor captioned “If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions; litigation; fines and penalties; interruptions to our commercial operations, clinical trials or other operations; harm to our reputation; loss of revenue or profits; loss of sales and other adverse consequences.” Governance 67 Table of Contents Our Nominating / Corporate Governance Committee has oversight of our cybersecurity risk management program and reports to our board of directors on cybersecurity matters.
In addition, our incident response processes include a procedure for reporting certain cybersecurity incidents to the board of directors and/or the Nominating / Corporate Governance Committee. 64 Table of Contents The Nominating / Corporate Governance Committee receives regular reports from management concerning our cybersecurity risk management program, and also receives various summaries and/or presentations related to cybersecurity threats, risks and mitigation.
In addition, our incident response processes include a procedure for reporting certain cybersecurity incidents to the board of directors and/or the Nominating / Corporate Governance Committee. The Nominating / Corporate Governance Committee receives regular reports from management concerning our cybersecurity risk management program, and also receives various summaries and/or presentations related to cybersecurity threats, risks and mitigation.
Various members of our management team, IT department and other employees, including but not limited to the individuals on our cybersecurity incident management team, help identify, assess and manage our cybersecurity threats and risks, with the assistance of a third-party IT managed 63 Table of Contents service provider.
Various members of our management team, IT department and other employees, including but not limited to the individuals on our cybersecurity incident management team, help identify, assess and manage our cybersecurity threats and risks, with the assistance of a third-party IT managed service provider.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example managed cybersecurity service providers, threat intelligence service providers, dark web monitoring services, and other cybersecurity software providers.
We engage third-party service providers to assist us to identify, assess, and manage material risks from cybersecurity threats, including for example managed cybersecurity service providers, threat intelligence service providers, dark web monitoring services, and other cybersecurity software providers.
Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes.
Our assessment and management of cybersecurity risks are integrated into our enterprise risk management program.
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With the help of our managed services provider, we have implemented a Security Operations Center ("SOC") service to provide continuous 24/7 monitoring and incident response across our network infrastructure.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEffective January 31, 2025, we have assigned our lease for the Dublin office to a third party. We believe our current facilities are adequate to conduct our business. For additional information regarding our lease agreements, see Note 18 of the Consolidated Financial Statements included in this report.
Biggest changeWe believe our current facilities are adequate to conduct our business, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms. For additional information regarding our lease agreements, see Note 18 of the Consolidated Financial Statements included in this report.
PROPERTIES As of December 31, 2024, we leased the following locations to conduct our business: Location Address Lease Expiration Square Feet San Diego, California 3611 Valley Centre Drive, Suite 300 August 31, 2028 103,677 Dublin, Ireland 3 Mount Street Crescent, 2nd Floor September 30, 2027 1,960 In November 2024, we entered into an arrangement to sublet 26,455 square feet of our San Diego office space beginning in January 2025 and ending in August 2028.
PROPERTIES As of December 31, 2025, we leased the following location to conduct our business: Location Address Lease Expiration Square Feet San Diego, California 3611 Valley Centre Drive, Suite 300 August 31, 2028 103,677 In November 2024, we entered into an arrangement to sublet 26,455 square feet of our San Diego office space beginning in January 2025 and ending in August 2028.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this Item is incorporated herein by reference to the Notes to the Consolidated Financial Statements--Note 11 Commitments and Contingencies: Legal Proceedings in Item 15 of this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 65 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this Item is incorporated herein by reference to the Notes to the Consolidated Financial Statements--Note 11 Commitments and Contingencies: Legal Proceedings in Item 15 of this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 68 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePerformance Graph The following is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing we make under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation by reference language in such filing.
Biggest changePerformance Graph The following information is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the liabilities of Section 18 of the Exchange Act, and will not be deemed incorporated by reference into any filing we make under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation by reference language in such filing, except to the extent we specifically incorporate it by reference into such filing.
The comparisons shown in the graph are based upon historical data and we caution that the stock price performance shown in the graph is not indicative of, nor intended to forecast, the potential future performance of our stock. 66 Table of Contents Dividends Since inception we have not paid any dividends on our common stock.
The comparisons shown in the graph are based upon historical data and we caution that the stock price performance shown in the graph is not indicative of, nor intended to forecast, the potential future performance of our stock. 69 Table of Contents Dividends Since inception we have not paid any dividends on our common stock.
Payment of dividends in the future will depend upon our earnings, capital requirements and other factors which our Board of Directors may deem relevant. ITEM 6. [RESERVED]
Payment of dividends in the future will depend upon our earnings, capital requirements and other factors which our Board of Directors may deem relevant.
As of February 18, 2025, we had approximately 173 holders of record of our common stock.
As of February 13, 2026, we had approximately 158 holders of record of our common stock.
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Recent Sales of Unregistered Equity Securities During the year ended December 31, 2025, we did not issue or sell any unregistered securities not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
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Securities Authorized for Issuance under Equity Compensation Plans See Item 12 of Part III of this Annual Report on Form 10-K for information about our equity compensation plans which is incorporated by reference herein.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the three months ended December 31, 2025. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

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

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Biggest changeFor the years ended December 31, 2024 and 2023, we had the following balances and financial performance ( in thousands ): December 31, 2024 December 31, 2023 Cash and cash equivalents $ 58,535 $ 58,176 Marketable debt securities, at fair value $ 312,166 $ 508,675 Convertible debt $ 378,988 $ 377,263 Accumulated deficit $ (1,447,167) $ (1,125,622) Stockholders' equity $ 59,077 $ 200,810 Net working capital* $ 215,951 $ 438,867 Net working capital ratio** 2.08 3.47 * Current assets less current liabilities **Current assets divided by current liabilities 76 Table of Contents As of December 31, 2024, we had cash and cash equivalents of $58.5 million and available-for-sale marketable debt securities of $312.2 million.
Biggest changeOur ability to achieve profitable operations in the future will depend in large part upon completing development of products in our pipeline, obtaining regulatory approvals for these products and bringing these products to market, along with potential in-licensing of additional products approved by the FDA and manufacturing and selling these products. 79 Table of Contents For the years ended December 31, 2025 and 2024, we had the following balances and financial performance ( in thousands ): Year Ended December 31, 2025 2024 Cash and cash equivalents $ 93,035 $ 58,535 Marketable debt securities, at fair value $ 229,761 $ 312,166 Convertible debt $ 311,724 $ 378,988 Accumulated deficit $ (1,472,713) $ (1,447,167) Stockholders' equity $ 114,828 $ 59,077 Net working capital* $ 277,661 $ 215,951 Net working capital ratio** 2.74 2.08 * Current assets less current liabilities **Current assets divided by current liabilities As of December 31, 2025, we had cash and cash equivalents of $93.0 million and available-for-sale marketable debt securities of $229.8 million.
As such, clinical trial expenses will vary depending on the all the factors set forth above and may fluctuate significantly from quarter to quarter and year to year. We routinely engage vendors and service providers for scientific research, clinical trial, regulatory compliance, manufacturing and other consulting services.
As such, clinical trial expenses will vary depending on all the factors set forth above and may fluctuate significantly from quarter to quarter and year to year. We routinely engage vendors and service providers for scientific research, clinical trial, regulatory compliance, manufacturing and other consulting services.
The net proceeds to us from the offering, after deducting the underwriting discounts and offering expenses, were approximately $134.7 million. 2023 Underwritten Public Offering of Common Stock In February 2023, we sold an aggregate of approximately 9.7 million shares of our common stock and pre-funded warrants to purchase 1.25 million shares of our common stock in an underwritten public offering, at a price to the public of $21.00 per share of common stock and $20.9999 per pre-funded warrant.
The net proceeds from the offering, after deducting the underwriting discounts and offering expenses, were approximately $134.7 million. 2023 Underwritten Public Offering of Common Stock In February 2023, we sold an aggregate of approximately 9.7 million shares of our common stock and pre-funded warrants to purchase 1.25 million shares of our common stock in an underwritten public offering, at a price to the public of $21.00 per share of common stock and $20.9999 per pre-funded warrant.
Our ability to fund our operations in subsequent years will depend upon certain factors which are beyond our control and may require us to obtain additional debt or equity capital or refinance all or a portion of our debt, including the 2025 Notes and 2029 Notes, on or before maturity.
Our ability to fund our operations in subsequent years will depend upon certain factors which are beyond our control and may require us to obtain additional debt or equity capital or refinance all or a portion of our debt, including the 2029 Notes, on or before maturity.
In December 2023, we announced that we completed a planned Type C meeting with the FDA to discuss results from the Phase 3 DUPLEX Study of sparsentan in FSGS.
In December 2023, we announced that we had completed a planned Type C meeting with the FDA to discuss results from the Phase 3 DUPLEX Study of sparsentan in FSGS.
At the inception of arrangements that include milestone payments, we use judgement to evaluate whether the milestones are probable of being achieved and estimates the amount to include in the transaction price utilizing the most likely amount method. If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price.
At the inception of arrangements that include milestone payments, we use judgment to evaluate whether the milestones are probable of being achieved and estimates the amount to include in the transaction price utilizing the most likely amount method. If it is probable that a significant revenue reversal will not occur, the estimated amount is included in the transaction price.
Upon the Closing of the transaction on August 31, 2023, we received an upfront cash payment of $210.0 million. Pursuant to the Purchase Agreement, we are eligible to receive up to $235.0 million upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $125.0 million to $500.0 million) of the Products.
Upon the Closing of the transaction in August 2023, we received an upfront cash payment of $210.0 million. Pursuant to the Purchase Agreement, we are eligible to receive up to $235.0 million upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $125.0 million to $500.0 million) of the Products.
Ligand may terminate the Ligand License Agreement due to (i) our insolvency, (ii) our material uncured breach of the agreement, (iii) our failure to use commercially reasonable efforts to develop and commercialize sparsentan as described above or (iv) certain other conditions. We may terminate the Ligand License Agreement due to a material uncured breach of the agreement by Ligand.
Ligand may terminate the Ligand License Agreement due to (i) our insolvency, (ii) our material uncured breach of the agreement, (iii) our failure to use commercially reasonable efforts to develop and commercialize FILSPARI as described above or (iv) certain other conditions. We may terminate the Ligand License Agreement due to a material uncured breach of the agreement by Ligand.
These provisions are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable (if the amount is payable to the customer) or as a current liability (if the amount is payable to a party other than a customer). Calculating these provisions involves estimates and judgements.
These provisions are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable (if the amount is payable to the customer) or as a current liability (if the amount is payable to a party other than a customer). Calculating these provisions involves estimates and judgments.
The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined 68 Table of Contents as urine protein-to-creatinine ratio (UPCR) ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.
The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as urine protein-to-creatinine ratio (UPCR) ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.
Though we generate revenues from product sales arrangements, we may incur significant operating losses over the next several years.
Though we generate revenues from product sales, we may incur significant operating losses over the next several years.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our discussion and analysis of our financial condition and results of operations for 2024 as compared to 2023 are discussed below and should be read in conjunction with our audited Consolidated Financial Statements, including the notes thereto.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our discussion and analysis of our financial condition and results of operations for 2025 as compared to 2024 are discussed below and should be read in conjunction with our audited Consolidated Financial Statements, including the notes thereto.
(running from the date of full approval) to slow kidney function decline in adults with primary IgAN who are at risk for disease progression, excluding the use provided for in the aforementioned Orphan Drug Exclusivity granted in connection with the accelerated approval. 67 Table of Contents IgAN is characterized by hematuria, proteinuria, and variable rates of progressive renal failure.
(running from the date of full approval) to slow kidney function decline in adults with primary IgAN who are at risk for disease progression, excluding the use provided for in the aforementioned Orphan Drug Exclusivity granted in connection with the accelerated approval. IgAN is characterized by hematuria, proteinuria, and variable rates of progressive renal failure.
Sources of cash over this period include net revenues from sales of our products, the sale or maturity of investments in our portfolio of marketable debt securities, and certain earned and potential milestone payments.
Sources of cash over this period include net revenues from sales of our products, the sale or maturity of investments in our portfolio of marketable debt securities, FILSPARI royalties and certain earned and potential milestone payments.
For further information, see Note 2, Summary of Significant Accounting Policies, to our Consolidated Financial Statements, which outlines our application of significant accounting policies. Revenue Recognition We recognize revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.
For further information, see Note 2, Summary of Significant Accounting Policies, to our Consolidated Financial Statements, which outlines our application of significant accounting policies. 74 Table of Contents Revenue Recognition We recognize revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.
If sparsentan receives marketing authorization in any of the territories covered by the exclusive license to Renalys, Renalys will be responsible for all development, regulatory matters, and commercialization activities in such licensed territories.
If sparsentan receives marketing authorization in any of the territories covered by the exclusive license to Chugai, Chugai will be responsible for all development, regulatory matters, and commercialization activities in such licensed territories.
The decrease in net sales of our tiopronin products was a driven by increased competition.
The decrease in net sales of our tiopronin products was driven by increased competition.
Allowances for commercial rebates are established based on actual payer information, which is reasonably estimated at the time of delivery for applicable products. Rebate discounts are included in accrued expenses in the accompanying consolidated balance sheets. 71 Table of Contents Prompt Pay Discounts: We offer discounts to certain customers for prompt payments.
Allowances for commercial rebates are established based on actual payer information, which is reasonably estimated at the time of delivery for applicable products. Rebate discounts are included in accrued expenses in the accompanying consolidated balance sheets. Prompt Pay Discounts: We offer discounts to certain customers for prompt payments.
Additional results from the PROTECT Study demonstrated the benefit of FILSPARI on absolute eGFR accrued over time and by Week 110 resulted in a 3.8 mL/min/1.73 m 2 difference in the mean change from baseline between FILSPARI and irbesartan.
Additional results from the PROTECT Study demonstrated the 70 Table of Contents benefit of FILSPARI on absolute eGFR accrued over time and by Week 110 resulted in a 3.8 mL/min/1.73 m 2 difference in the mean change from baseline between FILSPARI and irbesartan.
On August 31, 2023, we consummated the transactions contemplated by the Purchase Agreement (the "Closing"). In connection with the Closing, we received an upfront cash payment of $210.0 million.
In August 2023, we consummated the transactions contemplated by the Purchase Agreement (the "Closing"). In connection with the Closing, we received an upfront cash payment of $210.0 million.
Accordingly, Thiola EC is subject to generic competitio n. Sale of Bile Acid Product Portfolio On July 16, 2023, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Mirum Pharmaceuticals, Inc.
Accordingly, Thiola EC is subject to generic competitio n. Sale of Bile Acid Product Portfolio In July 2023, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Mirum Pharmaceuticals, Inc.
Following the recent PARASOL public workshop in which a multi-stakeholder group of rare kidney disease experts aligned around a potential proteinuria-based clinical trial endpoint for FSGS, we scheduled a Type C meeting with the FDA to discuss a potential regulatory pathway for a sparsentan FSGS indication.
Following the PARASOL public workshop in the fourth quarter of 2024, in which a multi-stakeholder group of rare kidney disease experts aligned around a potential proteinuria-based clinical trial endpoint for FSGS, we scheduled a Type C meeting with the FDA to discuss a potential regulatory pathway for a sparsentan FSGS indication.
For a discussion of our financial condition and results of operations for 2023 as compared to 2022, except as set forth below, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 202 3 Annual Report on Form 10-K , which discussion is incorporated by reference herein.
For a discussion of our financial condition and results of operations for 2024 as compared to 2023, except as set forth below, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10-K , which discussion is incorporated by reference herein.
Collaboration and License Proceeds License and Collaboration Agreement with CSL Vifor In September, 2021, we entered into a License Agreement with CSL Vifor, pursuant to which we granted an exclusive license to CSL Vifor for the commercialization of sparsentan in the Licensed Territories.
License and Collaboration Agreement with CSL Vifor In September, 2021, we entered into a license agreement with CSL Vifor, pursuant to which we granted an exclusive license to CSL Vifor for the commercialization of FILSPARI in the licensed territories.
Changes in assumptions where management utilizes significant judgement could have a material impact on the revenue we recognize.
Changes in assumptions where management utilizes significant judgment could have a material impact on the revenue we recognize.
We made a $65.0 million payment to Orphan in the second quarter of 2024 following the achievement of a development milestone.
We made a $65.0 million payment in the second quarter of 2024 following the achievement of a development milestone.
We will retain all rights to sparsentan in the United States and rest of world outside of the territories licensed to CSL Vifor and Renalys, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada, China, Brazil and/or Mexico.
We will retain all rights to sparsentan in the United States and rest of world outside of the territories licensed to CSL Vifor and Chugai, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada and/or Mexico.
As of December 31, 2024, our evaluation concluded that all such milestones associated with our collaboration and licensing agreements remained constrained and therefore no adjustment to the respective transaction price was necessary.
Our evaluation concluded that all such milestones not recognized as of December 31, 2025 associated with our collaboration and licensing agreements remained constrained and therefore no adjustment to the respective transaction price was necessary.
We also expanded our sales and marketing, compliance and legal functions in addition to expansion of all functions to support a commercial organization, including by adding additional members to our sales force in connection with the recent commercial launch of FILSPARI in the United States for IgAN.
We also expanded our sales and marketing, compliance and legal functions in addition to expansion of all functions to support a commercial organization, including by adding additional members to our sales force in connection with the commercial launch of FILSPARI in the United States for IgAN and for the potential commercial launch of FILSPARI in the United States for FSGS, if approved.
For the years ended December 31, 2024 and 2023, the Company recorded adjustments to net product revenue of $0.5 million and $0.4 million, respectively, related to performance obligations satisfied in previous periods.
For the years ended December 31, 2025 and 2024, the Company recorded adjustments to net product revenue of $1.1 million and $0.5 million, respectively, related to performance obligations satisfied in previous periods.
Factors that may affect financing requirements include, but are not limited to: • the timing, progress, cost and results of our clinical trials, preclinical studies and other discovery and research and development activities; • the timing and outcome of, and costs involved in, seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products; • the timing of, and costs involved in, commercial activities, including product marketing, sales and distribution; • our ability to successfully commercialize FILSPARI for the treatment of IgAN, and to obtain regulatory approval for, and successfully commercialize, sparsentan for FSGS and our other or future product candidates; • increases or decreases in revenue from our marketed products, including decreases in revenue resulting from generic entrants or health epidemics or pandemics; • debt service obligations on the 2025 Notes and 2029 Notes; • the number and development requirements of other product candidates that we pursue; • our ability to manufacture sufficient quantities of our products to meet expected demand; • the costs of preparing, filing, prosecuting, maintaining and enforcing any patent claims and other intellectual property rights, litigation costs and the results of litigation; • our ability to enter into collaboration, licensing or distribution arrangements and the terms and timing of these arrangements; • the potential need to expand our business, resulting in additional payroll and other overhead expenses; • the potential in-licensing of other products or technologies; • the emergence of competing technologies or other adverse market or technological developments; and • the impacts of inflation and resulting cost increases.
Factors that may affect financing requirements include, but are not limited to: • the timing, progress, cost and results of our clinical trials, preclinical studies and other discovery and research and development activities; • the timing and outcome of, and costs involved in, seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products; • the timing of, and costs involved in, commercial activities, including product marketing, sales and distribution; • our ability to successfully commercialize FILSPARI for the treatment of IgAN, and to obtain regulatory approval for, and successfully commercialize, sparsentan for FSGS and our other or future product candidates; • increases or decreases in revenue from our marketed products, including decreases in revenue resulting from generic entrants, changes in reimbursement or rebates, and/or health epidemics or pandemics; • payment obligations related to the 2029 Notes; • the number and development requirements of other product candidates that we pursue; • our ability to manufacture sufficient quantities of our products to meet expected demand; • the costs of preparing, filing, prosecuting, maintaining and enforcing any patent claims and other intellectual property rights, litigation costs and the results of litigation; • our ability to enter into collaboration, licensing or distribution arrangements and the terms and timing of these arrangements; • the potential need to expand our business, resulting in additional payroll and other overhead expenses; • the potential in-licensing of other products or technologies; • the emergence of competing technologies or other adverse market or technological developments; • the potential impacts of actions taken by the current administration, including but not limited to tariffs and changes at the FDA and other government agencies; and • the impacts of inflation and resulting cost increases.
These generic versions of the original formulation of Thiola have impacted our sales, and these or additional generic versions of either formulation could have a material adverse impact on sales. As of December 31, 2024, several generic options for the 100mg and 300mg versions of Thiola EC have been approved by the FDA and become available.
These generic versions of the original formulation of Thiola have impacted our sales, and these or additional generic versions of either formulation could have a material adverse impact on sales. To date, several generic options for the 100mg and 300mg versions of Thiola EC have been approved by the FDA and become available.
In April 2024, we and our partner CSL Vifor announced that the European Commission has granted conditional marketing authorization (“CMA”) for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).
In April 2024, we and our partner CSL Vifor announced that the European Commission had granted conditional marketing authorization (“CMA”) for FILSPARI (sparsentan) for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g), and in April 2025, we and CSL Vifor announced that the European Commission had converted the CMA into a standard marketing authorization (“MA”) for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).
In addition, depending on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors, we may also from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.
In addition, depending on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors, we may also from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise, and the amounts involved in such purchases and/or exchanges, individually or in the aggregate, may be material.
As part of the liver monitoring REMS, monthly monitoring of each patient is required for the first year the patient is on treatment, and quarterly thereafter.
Initially, as part of the liver monitoring REMS, monthly monitoring of each patient was required for the first year a patient was on treatment, and quarterly thereafter.
Following commercialization of sparsentan or any products containing related compounds, we are obligated to pay to Ligand an escalating royalty between 15% and 17% of net sales of all such products, with payments due quarterly. We began incurring costs associated with such royalties following the February 2023 approval of FILSPARI (sparsentan).
Pursuant to the terms of the Ligand License Agreement, we are obligated to pay to Ligand an escalating royalty between 15% and 17% of net sales of FILSPARI and any other products containing FILSPARI or related compounds, with payments due quarterly. We began incurring costs associated with such royalties following the February 2023 approval of FILSPARI.
Cash Flows from Investing Activities Cash provided by investing activities from continuing operations for the year ended December 31, 2024 was $99.3 million compared to cash provided of $151.6 million for the year ended December 31, 2023.
Cash Flows from Investing Activities Cash provided by investing activities from continuing operations for the year ended December 31, 2025 was $27.9 million compared to cash provided of $99.3 million for the year ended December 31, 2024.
FILSPARI is available only through a risk evaluation and mitigation strategy (REMS) approved by the FDA, regarding mandatory birth control for patients of child-bearing potential regarding risk of embryo-fetal toxicity, as has been required for other approved endothelin antagonists, and a REMS for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.
FILSPARI is available only through a risk evaluation and mitigation strategy (REMS) approved by the FDA for liver monitoring regarding potential risk of hepatotoxicity, as has been required for certain other approved endothelin antagonists.
Future capital requirements will also depend on the extent to which we acquire or invest in additional complementary businesses, products and technologies. 80 Table of Contents Cash Flows from Continuing Operations The following table summarizes our cash flows for the periods set forth below ( in thousands ): Year Ended December 31, 2024 2023 2022 Net cash used in operating activities - continuing operations $ (230,024) $ (325,357) $ (260,846) Net cash provided by (used in) investing activities - continuing operations 99,325 (151,626) (32,553) Net cash provided by financing activities - continuing operations 139,422 220,134 120,052 Cash flows from continuing operations 8,723 (256,849) (173,347) Cash flows from discontinued operations (7,451) 251,356 72,076 Effect of exchange rate changes on cash (913) 1,981 (2,794) Net increase (decrease) in cash and cash equivalents 359 (3,512) (104,065) Cash and cash equivalents, beginning of year 58,176 61,688 165,753 Cash and cash equivalents, end of year 58,535 58,176 61,688 Marketable debt securities, at fair value 312,166 508,675 388,557 Total cash and cash equivalents and marketable debt securities $ 370,701 $ 566,851 $ 450,245 Management considers marketable debt securities to be available to fund current operations, and they are classified as available for sale and included within current assets in our Consolidated Balance Sheets.
Future capital requirements will also depend on the extent to which we acquire or invest in additional complementary businesses, products and technologies. 83 Table of Contents Cash Flows from Continuing Operations The following table summarizes our cash flows for the periods set forth below ( in thousands ): Year Ended December 31, 2025 2024 2023 Net cash provided by (used in) operating activities - continuing operations $ 37,784 $ (230,024) $ (325,357) Net cash provided by (used in) investing activities - continuing operations 27,892 99,325 (151,626) Net cash (used in) provided by financing activities - continuing operations (33,467) 139,422 220,134 Cash flows provided by (used in) continuing operations 32,209 8,723 (256,849) Cash flows (used in) provided by discontinued operations — (7,451) 251,356 Effect of exchange rate changes on cash 2,291 (913) 1,981 Net increase (decrease) in cash and cash equivalents 34,500 359 (3,512) Cash and cash equivalents, beginning of year 58,535 58,176 61,688 Cash and cash equivalents, end of year 93,035 58,535 58,176 Marketable debt securities, at fair value 229,761 312,166 508,675 Total cash and cash equivalents and marketable debt securities $ 322,796 $ 370,701 $ 566,851 Management considers marketable debt securities to be available to fund current operations, and they are classified as available for sale and included within current assets in our Consolidated Balance Sheets.
Liquidity and Capital Resources We have financed our operations through a combination of borrowings, sales of our equity securities, and revenues generated from our commercialized products, along with proceeds from license and collaboration agreements and the divestiture of our bile acid business.
See Note 19 to our Consolidated Financial Statements for further discussion. Liquidity and Capital Resources We have financed our operations through a combination of borrowings, sales of our equity securities, and revenues generated from our commercialized products, along with proceeds from license and collaboration agreements and the divestiture of our bile acid business.
We also make grants to research and non-profit organizations to conduct research which may lead to new intellectual properties that we may subsequently license under separately negotiated license agreements.
We also make grants to research and non-profit organizations to conduct research which may lead to new intellectual properties that we may subsequently license under separately negotiated license agreements. Such grants may be funded in lump sums or installments.
Selling, general and administrative expenses Selling, general and administrative expenses consist of salaries and bonuses, benefits, non-cash share-based compensation, legal and other professional fees, rent, depreciation and amortization, travel, insurance, business development, sales and marketing programs, and other operating expenses.
Internal personnel costs to support all programs increased by $6.2 million. Selling, general and administrative expenses Selling, general and administrative expenses consist of salaries and bonuses, benefits, non-cash share-based compensation, legal and other professional fees, rent, depreciation and amortization, travel, insurance, business development, sales and marketing programs, and other operating expenses.
Funding Requirements We believe that our available cash and short-term investments as of the date of this filing will be sufficient to fund our anticipated level of operations beyond the next 12 months from the date of this filing.
See Note 7 to Consolidated Financial Statements for further discussion. 82 Table of Contents Funding Requirements We believe that our available cash and short-term investments as of the date of this filing will be sufficient to fund our anticipated level of operations beyond the next 12 months from the date of this filing.
Therefore, cash and short-term investments available to fund operations is $370.7 million as of December 31, 2024. Cash Flows from Operating Activities Cash used in operating activities from continuing operations for the year ended December 31, 2024 was $230.0 million compared to cash used of $325.4 million for the year ended December 31, 2023.
Therefore, cash and short-term investments available to fund operations is $322.8 million as of December 31, 2025. Cash Flows from Operating Activities Cash provided by operating activities from continuing operations for the year ended December 31, 2025 was $37.8 million compared to cash used of $230.0 million for the year ended December 31, 2024.
Clinical-Stage Programs: Sparsentan for the treatment of FSGS Sparsentan has been granted Orphan Drug Designation for the treatment of FSGS in the U.S. and the EEA. FSGS is a leading cause of kidney failure and nephrotic syndrome.
Chugai plans to file for regulatory approval for sparsentan in Japan in 2026. 71 Table of Contents Clinical-Stage Programs: Sparsentan for the treatment of FSGS Sparsentan has been granted Orphan Drug Designation for the treatment of FSGS in the U.S. and the EEA. FSGS is a leading cause of kidney failure and nephrotic syndrome.
The change was due to a decrease in net purchases of marketable debt securities, offset by a $65.0 million payment to Orphan in the second quarter of 2024 following the achievement of a development milestone.
The change was due to a decrease in net proceeds from the sale and maturity of marketable debt securities and an increase in the purchase of intangible assets, offset by a $65.0 million payment to Orphan in the second quarter of 2024 following the achievement of a development milestone.
Cash Flows from Financing Activities Cash provided by financing activities from continuing operations for the year ended December 31, 2024 was $139.4 million compared to cash provided of $220.1 million for the year ended December 31, 2023.
Cash Flows from Financing Activities Cash used in financing activities from continuing operations for the year ended December 31, 2025 was $33.5 million compared to cash provided of $139.4 million for the year ended December 31, 2024.
See Note 9 to our unaudited Consolidated Financial Statements for further discussion. 78 Table of Contents Mission License Agreement In 2014, we entered into a license agreement with Mission Pharmacal ("Mission"), pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola ("Mission License Agreement").
Mission License Agreement In 2014, we entered into a license agreement with Mission Pharmacal ("Mission"), pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola ("Mission License Agreement").
Over the next 12 months, our expected financial obligations include, but are not limited to, funding our operations, operating lease payments, interest payments on our outstanding debt, anticipated milestone payments, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, expenses associated with the launch of FILSPARI and the anticipated repayment of the outstanding principal of approximately $68.9 million on the 2025 Notes which mature on September 15, 2025.
Over the next 12 months, our expected financial obligations include, but are not limited to, funding our operations, operating lease payments, interest payments on our outstanding debt, anticipated milestone payments, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, expenses associated with the ongoing launch of FILSPARI and expenses associated with the preparations for a potential commercial launch of FILSPARI in FSGS.
Other Commercial Products: Thiola and Thiola EC (tiopronin) Thiola and Thiola EC are approved by the FDA for the treatment of cystinuria, a rare genetic cystine transport disorder that causes high cystine levels in the urine and the formation of recurring kidney stones.
We acquired pegtibatinase as part of the November 2020 acquisition of Orphan Technologies Limited. 73 Table of Contents Other Commercial Products: Thiola and Thiola EC (tiopronin) Thiola and Thiola EC are approved by the FDA for the treatment of cystinuria, a rare genetic cystine transport disorder that causes high cystine levels in the urine and the formation of recurring kidney stones.
These restructuring adjustments are expected to result in an estimated annualized savings of approximately $25.0 million beginning in 2024. As of December 31, 2024, we have incurred total non-recurring charges of $13.8 million in connection with the restructuring, and are no longer incurring restructuring expenses.
These restructuring adjustments are expected to result in an estimated annualized savings of approximately $25.0 million beginning in 2024. As of December 31, 2024, we had recognized total costs of $13.8 million in connection with the restructuring and no such expenses were incurred for the year ended December 31, 2025.
External service provider costs decreased by $16.7 million, which was largely driven by a decrease in costs associated with the development of sparsentan as our Phase 3 programs advance towards completion, offset by an increase in costs associated with the development of pegtibatinase following the December 2023 initiation of the Phase 3 HARMONY Study.
External service provider costs decreased by $17.7 million, which was largely driven by a decrease in costs associated with the development of pegtibatinase due to the pause of the HARMONY Study in September 2024 and a decrease in costs associated with the development of sparsentan as our Phase 3 programs advance towards completion.
We recognize aggregate sales-based milestones and royalty payments from product sales of which the license is deemed to be the predominant item to which the royalties relate, at the later of when the related sales occur or when the performance obligation to which the sales-based milestone or royalty has been allocated has been satisfied.
We recognize aggregate sales-based milestones and royalty payments from product sales of which the license is deemed to be the predominant item to which the royalties relate, at the later of when the related sales occur or when the performance obligation to which the sales-based milestone or royalty has been allocated has been satisfied. 75 Table of Contents We utilize significant judgment to develop estimates of the stand-alone selling price for each distinct performance obligation based upon the relative stand-alone selling price.
For the year ended December 31, 2024, sales of FILSPARI primarily consisted of zero-cost inventories, and therefore cost of goods sold did not increase proportionally to the increase in product sales. As of December 31, 2024, we had $2.3 million of zero-cost inventory remaining, the majority of which we expect will be consumed in 2025.
For the year ended December 31, 2025, sales of FILSPARI primarily consisted of zero-cost inventories, and therefore cost of goods sold did not increase proportionally to the increase in product sales. As of December 31, 2025 the zero-cost inventory remaining was immaterial.
The 2025 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by us. See Note 7 to Consolidated Financial Statements for further discussion.
The 2029 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by us.
Additionally, in a dose-dependent manner in the study to date, methionine levels were substantially reduced and cystathionine levels were substantially elevated following treatment with pegtibatinase, suggesting that pegtibatinase acts in a manner similar to the native CBS enzyme. 69 Table of Contents In May 2023, we announced positive topline results from the sixth cohort of the Phase 1/2 COMPOSE Study, which was initiated to inform and refine formulation work for future development and commercial purposes and to further evaluate the dose response curve for pegtibatinase, and to further inform our pivotal development program to ultimately support potential approval of pegtibatinase for the treatment of HCU.
In May 2023, we announced positive topline results from the sixth cohort of the Phase 1/2 COMPOSE Study, which was initiated to inform and refine formulation work for future development and commercial purposes and to further evaluate the dose response curve for pegtibatinase, and to further inform our pivotal development program to ultimately support potential approval of pegtibatinase for the treatment of HCU.
Recently Issued Accounting Pronouncements See Note 2 to the Consolidated Financial Statements for discussion. Results of Operations Unless noted otherwise, the discussion below, and the revenue and expense amounts discussed below, are based on and relate to our continuing operations.
Results of Operations Unless noted otherwise, the discussion below, and the revenue and expense amounts discussed below, are based on and relate to our continuing operations.
We did not sell any shares under the ATM Agreement during the year ended December 31, 2024. Operating Leases Future Minimum Rental Commitments As of December 31, 2024, we have future minimum rental commitments totaling $25.4 million arising from our operating leases. These commitments represent the aggregate base rent through August 2028.
We have not sold any shares under the ATM Agreement. Operating Leases Future Minimum Rental Commitments As of December 31, 2025, we have future minimum rental commitments totaling $18.5 million arising from our operating lease and sublease income totaling $3.5 million. These commitments represent the aggregate base rent through August 2028.
We have appealed the pricing decision and will pursue an appeal of the amount paid with the Competent Administrative Court. Borrowings Convertible Senior Notes Due 2029 On March 11, 2022, we completed a registered underwritten public offering of $316.3 million aggregate principal amount of 2.25% Convertible Senior Notes due 2029 (“2029 Notes”).
Borrowings Convertible Senior Notes Due 2029 On March 11, 2022, we completed a registered underwritten public offering of $316.3 million aggregate principal amount of 2.25% Convertible Senior Notes due 2029 (“2029 Notes”).
We currently have four Phase 3 clinical trials in 72 Table of Contents process that are in varying stages of activity, with ongoing non-clinical support trials that are significant and changes in estimates could have a material impact on expenses we recognize.
We currently have four Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials that are significant and changes in estimates could have a material impact on expenses we recognize. Recently Issued Accounting Pronouncements See Note 2 to the Consolidated Financial Statements for discussion.
Pursuant to the Purchase Agreement, after the Closing, we are eligible to receive up to $235.0 million upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $125.0 million to $500.0 million) of the Products. 70 Table of Contents A $226.0 million gain, net of tax, was recognized on the transaction as a component of net income from discontinued operations in the Consolidated Statements of Operations.
Pursuant to the Purchase Agreement, after the Closing, we are eligible to receive up to $235.0 million upon the achievement of certain milestones based on specified amounts of annual net sales (tiered from $125.0 million to $500.0 million) of the Products.
In October 2024, we and CSL Vifor announced that Swissmedic has granted temporary marketing authorization for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g). In November 2024, the Medicines and Healthcare products Regulatory Agency (MHRA) approved FILSPARI in the United Kingdom.
FILSPARI became commercially available in Europe under the CMA in August 2024, with an initial launch in Germany and Austria. In October 2024, we and CSL Vifor announced that Swissmedic has granted temporary marketing authorization for FILSPARI for the treatment of adults with primary IgAN with a urine protein excretion ≥1.0 g/day (or urine protein-to-creatinine ratio ≥0.75 g/g).
For the year ended December 31, 2024, we capitalized $20.3 million to intangible assets for royalties owed on net sales of FILSPARI. The Ligand License Agreement will continue until neither party has any further payment obligations under the agreement and is expected to continue for up to 20 years from the effective date.
The Ligand License Agreement will continue until neither party has any further payment obligations under the agreement and is expected to continue for up to 20 years from the effective date.
In 2018, we announced the initiation of the Phase 3 clinical trial designed to serve as the basis for an NDA and MAA filing for sparsentan for the treatment of FSGS (the "DUPLEX Study"). The DUPLEX Study is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in 371 patients.
The DUPLEX Study is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in 371 patients.
The change was due to the November 2024 issuance of common stock through an underwritten public offering that provided $134.7 million in net proceeds, compared to $215.8 million in net proceeds from the March 2023 issuance of common stock and pre-funded warrants.
The change was due to the $68.9 million repayment of convertible notes upon maturity in September 2025 and the November 2024 issuance of common stock through an underwritten public offering that provided $134.7 million in net proceeds.
Royalties and Contingent Cash Payments Ligand License Agreement In 2012, we entered into an agreement with Ligand Pharmaceuticals, Inc. ("Ligand") for a worldwide sublicense to develop, manufacture and commercialize sparsentan (the “Ligand License Agreement”). As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million.
("Ligand") for a worldwide sublicense to develop, manufacture and commercialize FILSPARI (the “Ligand License Agreement”). As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million. Through December 31, 2025, we have paid $47.2 million for contractual milestones achieved under the Ligand License Agreement.
We also have the option to purchase all equity securities of Renalys at any time prior to the top-line results of the Phase 3 trial in Japan (“Buyout Right”). 77 Table of Contents Equity Offerings 2024 Underwritten Public Offering of Common Stock In November 2024, we sold an aggregate of approximately 9.0 million shares of our common stock in an underwritten public offering, at a price to the public of $16.00 per share of common stock.
Equity Offerings 2024 Underwritten Public Offering of Common Stock In November 2024, we sold an aggregate of approximately 9.0 million shares of our common stock in an underwritten public offering, at a price to the public of $16.00 per share of common stock.
The stand-alone selling price for license-related performance obligations requires judgement in developing assumptions to project probability-weighted cash flows based upon estimates of forecasted revenues, clinical and regulatory timelines and discount rates. The stand-alone selling price for clinical development performance obligations is based on forecasted expected costs of satisfying a performance obligation plus an appropriate margin.
Variable consideration that relates specifically to our efforts to satisfy specific performance obligations is allocated entirely to those performance obligations. The stand-alone selling price for license-related performance obligations requires judgment in developing assumptions to project probability-weighted cash flows based upon estimates of forecasted revenues, clinical and regulatory timelines and discount rates.
For the year ended December 31, 2024 compared to the year ended December 31, 2023, our cost of goods sold - license and collaboration decreased by $2.7 million, primarily due to the sale of active pharmaceutical ingredients to CSL Vifor in the first quarter of 2023.
For the year ended December 31, 2025 compared to the year ended December 31, 2024, our cost of goods sold - license and collaboration increased by $4.2 million, primarily due to the sale of active pharmaceutical ingredients to CSL Vifor in 2025. 77 Table of Contents Research and development expenses Research and development costs include expenses related to sparsentan, pegtibatinase and our other pipeline programs.
We are also entitled to receive tiered double-digit royalties of up to 40 percent of annual net sales of sparsentan in the Licensed Territories. See Note 4 to Consolidated Financial Statements for further discussion. Licensing Agreement with Renalys In January 2024, our license agreement with Renalys Pharma, Inc. came into effect.
Through December 31, 2025, we have received milestone payments totaling $57.5 million associated with the license agreement. We are also entitled to receive tiered double-digit royalties of up to 40 percent of annual net sales of sparsentan in the licensed territories. 80 Table of Contents See Note 4 to Consolidated Financial Statements for further discussion.
We recognize costs for clinical development activities in research and development; costs related to sale of active pharmaceutical ingredients are recognized in cost of goods sold. 73 Table of Contents Operating Expenses The following table provides information regarding operating expenses ( in thousands ): Year Ended December 31, 2024 2023 Change Cost of goods sold - product sales $ 7,446 $ 8,406 $ (960) Cost of goods sold - license and collaboration 298 3,044 (2,746) Total cost of goods sold 7,744 11,450 (3,706) Research and development 217,496 244,990 (27,494) Selling, general and administrative 264,119 265,542 (1,423) In-process research and development 65,205 — 65,205 Restructuring 2,438 11,394 (8,956) Total operating expenses $ 557,002 $ 533,376 $ 23,626 Cost of goods sold Cost of goods sold includes the cost of inventory sold, third party manufacturing and supply chain costs, product shipping and handling costs, and provisions for excess and obsolete inventory.
Operating Expenses The following table provides information regarding operating expenses ( in thousands ): Year Ended December 31, 2025 2024 Change Cost of goods sold - product sales $ 5,813 $ 7,446 $ (1,633) Cost of goods sold - license and collaboration 4,526 298 4,228 Total cost of goods sold 10,339 7,744 2,595 Research and development 206,011 217,496 (11,485) Selling, general and administrative 337,202 264,119 73,083 In-process research and development — 65,205 (65,205) Restructuring — 2,438 (2,438) Total operating expenses $ 553,552 $ 557,002 $ (3,450) Cost of goods sold Cost of goods sold includes the cost of inventory sold, third party manufacturing and supply chain costs, product shipping and handling costs, and provisions for excess and obsolete inventory.
See Note 18 to Consolidated Financial Statements for further discussion. Purchase Commitments Manufactured Product Certain of our contractual arrangements with contract manufacturing organizations ("CMOs") require binding forecasts or commitments to purchase minimum amounts for the manufacture of drug product supply, which may be material to our financial statements.
Purchase Commitments Manufactured Product Certain of our contractual arrangements with contract manufacturing organizations ("CMOs") require binding forecasts or commitments to purchase minimum amounts for the manufacture of drug product supply, which may be material to our financial statements. 81 Table of Contents Royalties and Contingent Cash Payments Ligand License Agreement In 2012, we entered into an agreement with Ligand Pharmaceuticals, Inc.
In December 2024, Renalys announced that sparsentan received Orphan Drug Designation from the Japanese Ministry of Health, Labour and Welfare for the indication of primary IgA nephropathy as of November 27, 2024. Under the terms of the licensing agreement, Renalys will be responsible for development, regulatory matters, and commercialization in the licensed territories.
("Renalys"), to bring sparsentan for the treatment of IgAN to patients in Japan and other countries in Asia. In December 2024, Renalys announced that sparsentan received Orphan Drug Designation from the Japanese Ministry of Health, Labour and Welfare for the indication of primary IgA nephropathy as of November 27, 2024.
In February 2025, we announced that we had completed a Type C meeting with the FDA and that we plan to submit an sNDA around the end of the first quarter of 2025 seeking traditional approval of FILSPARI for FSGS. The sNDA will be based on existing data from the Phase 3 DUPLEX and Phase 2 DUET studies of FILSPARI.
In February 2025, we announced that we had completed a Type C meeting with the FDA and in March 2025, we announced that we had submitted an sNDA to the FDA seeking traditional approval of FILSPARI for the treatment of FSGS.
License and collaboration revenue The decrease in license and collaboration revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a $8.5 million decrease in collaboration revenue associated with the CSL Vifor License Agreement due to a decrease in amortization of deferred revenue, and the $3.3 million sale of active pharmaceutical ingredients to CSL Vifor in March 2023.
License and collaboration revenue The $73.8 million increase in license and collaboration revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to market access and regulatory milestones totaling $57.5 million associated with CSL Vifor, recognition of Renalys deferred revenue of $9.3 million, $5.9 million for royalties earned in 2025 on net sales of FILSPARI and sales totaling $4.7 million of active pharmaceutical ingredients to CSL Vifor.
Research and development expenses Research and development costs include expenses related to sparsentan, pegtibatinase and our other pipeline programs. We expense all research and development costs as they are incurred.
We expense all research and development costs as they are incurred.
The voluntary enrollment pause was enacted following our determination that the desired drug substance profile was not achieved in the recent scale-up process. We are making progress on necessary process improvements in manufacturing scale-up and currently anticipate that we should be in position to restart enrollment in the Phase 3 HARMONY Study in 2026.
The voluntary enrollment pause was enacted following our determination that the desired drug substance profile was not achieved in the initial scale-up process, and it enabled us to address necessary process improvements in manufacturing scale-up to support initial commercial scale manufacturing as well as full enrollment in the HARMONY Study.
Every year approximately 5,400 patients are diagnosed with FSGS and we estimate that there are more than 40,000 FSGS patients in the United States and a similar number in Europe with approximately half of them being candidates for sparsentan. In 2016, we generated positive data from our Phase 2 DUET study in FSGS.
Every year approximately 5,400 patients are diagnosed with FSGS and we estimate that there are more than 40,000 FSGS patients in the United States and a similar number in Europe. We believe that there are up to 30,000 FSGS patients in the United States that are potentially addressable with FILSPARI, if approved.
Such grants may be funded in lump sums or installments. 74 Table of Contents The following table provides information regarding research and development expenses ( in thousands ): For the Year Ended December 31, 2024 2023 Change External service provider costs: Sparsentan $ 58,023 $ 91,702 $ (33,679) Pegtibatinase 68,280 50,780 17,500 General and other product candidates 17,350 17,850 (500) Total external service provider costs 143,653 160,332 (16,679) Internal personnel costs 73,843 84,658 (10,815) Total research and development $ 217,496 $ 244,990 $ (27,494) For the year ended December 31, 2024 compared to the year ended December 31, 2023, our research and development expenses decreased by $27.5 million.
The following table provides information regarding research and development expenses ( in thousands ): For the Year Ended December 31, 2025 2024 Change External service provider costs: Sparsentan $ 50,712 $ 58,023 $ (7,311) Pegtibatinase 56,324 68,280 (11,956) General and other product candidates 18,884 17,350 1,534 Total external service provider costs 125,920 143,653 (17,733) Internal personnel costs 80,091 73,843 6,248 Total research and development $ 206,011 $ 217,496 $ (11,485) For the year ended December 31, 2025 compared to the year ended December 31, 2024, our research and development expenses decreased by $11.5 million.
Discontinued Operations Results of discontinued operations are as follows ( in thousands ): Year Ended December 31, 2024 2023 Change (Loss) income from discontinued operations, net of tax $ (915) $ 264,934 $ (265,849) The $265.8 million change in (loss) income from discontinued operations, net of tax for the year ended December 31, 2024 compared to the year ended December 31, 2023 is primarily due to the August 31, 2023 sale of our bile acid business, which resulted in a gain, net of tax, of $226.0 million.
Discontinued Operations Results of discontinued operations are as follows ( in thousands ): Year Ended December 31, 2025 2024 Change Income (loss) from discontinued operations, net of tax $ 24,715 $ (915) $ 25,630 The $25.6 million change in income (loss) from discontinued operations, net of tax for the year ended December 31, 2025 compared to the year ended December 31, 2024 is due to the recognition of a $25.0 million sales milestone from Mirum related to the achievement of an annual net sales milestone in 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDue to the short-term duration of our investment portfolio and the low risk profile of our investments, a change in interest rates of 100 basis points would have approximately a $1.7 million impact on our investments. 81 Table of Contents The marketable debt securities held in our investment portfolio may subject us to credit risk, though our investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.
Biggest changeDue to the short-term duration of our investment portfolio and the low risk profile of our investments, a change in interest rates of 100 basis points on December 31, 2025 would have had approximately a $1.1 million impact on our investments. 84 Table of Contents The marketable debt securities held in our investment portfolio may subject us to credit risk, though our investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary exposure to market risk is related to changes in interest rates. As of December 31, 2024, we had cash equivalents and marketable debt securities of approximately $370.7 million, consisting of money market funds, U.S. government agency debt, corporate debt and commercial paper.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary exposure to market risk is related to changes in interest rates. As of December 31, 2025, we had cash equivalents and marketable debt securities of approximately $322.8 million, consisting of money market funds, U.S. government agency debt, corporate debt and commercial paper.

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