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LICENSE, COLLABORATION AND OTHER REVENUE | 3 Months Ended
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Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
LICENSE, COLLABORATION AND OTHER REVENUE | LICENSE, COLLABORATION AND OTHER REVENUE The Company recognized the following revenue from its license, collaboration and other revenue agreements (in thousands):
|  | Three Months Ended March 31, |  |
Entity | Description | 2025 |  | 2024 |  |  |  |
Medice | License and royalties related to the sale of Vafseo in the EU | $ | 7 |  |  | $ | — |  |  |  |  |
MTPC | License and Product Supply of Vafseo in Japan | 369 |  |  | 412 |  |  |  |  |
JT and Torii | License and royalties related to the sale of Riona in Japan | 1,169 |  |  | 1,186 |  |  |  |  |
Total license and other revenue | $ | 1,545 |  |  | $ | 1,598 |  |  |  |  |
The following tables present changes in the Company’s contract assets and liabilities related to license and other revenue (in thousands):
|  | Three Months Ended March 31, 2025
|  | Balance at Beginning of Period |  | Additions |  | Deductions |  | Balance at End of Period
Contract asset: |  |  |  |  |  |  |  |
Accounts receivable(1) |  | $ | 2,010 |  |  | $ | 1,545 |  |  | $ | (1,989) |  |  | $ | 1,566 |
|  | Three Months Ended March 31, 2024
|  | Balance at Beginning of Period |  | Additions |  | Deductions |  | Balance at End of Period
Contract assets: |  |  |  |  |  |  |  |
Accounts receivable(1) |  | $ | 3,333 |  |  | $ | 2,327 |  |  | $ | (2,968) |  |  | $ | 2,692 |
Contract liabilities: |  |  |  |  |  |  |  |
Deferred revenue(2) |  | $ | 43,296 |  |  | $ | 695 |  |  | $ | — |  |  | $ | 43,991 |
(1) Excludes accounts receivable related to amounts due to the Company from product sales of Auryxia and Vafseo which are included in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2025 and 2024. (2) See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, for further information. The Company recognized the following revenues as a result of changes in the contract asset and contract liability balances in the respective periods (in thousands):
| Three Months Ended March 31, |  |
Revenue Recognized in the Period: | 2025 |  | 2024 |  |  |  |
Deferred revenue — beginning of the period | $ | — |  |  | $ | — |  |  |  |  |
During each of the three months ended March 31, 2025 and 2024, the Company recognized no revenue from performance obligations satisfied in previous periods. Medice License Agreement On May 24, 2023, or Medice Effective Date, the Company and MEDICE Arzneimittel Pütter GmbH & Co. KG, or Medice, entered into a License Agreement, or the Medice License Agreement, pursuant to which the Company granted to Medice an exclusive license to develop and commercialize Vafseo for the treatment of anemia in adult patients with CKD in the European Economic Area, the United Kingdom, Switzerland and Australia, or collectively the Medice Territory. Under the Medice License Agreement, the Company received an up-front payment of $10.0 million and is eligible to receive the following payments: (i) commercial milestone payments up to an aggregate of $100.0 million, and (ii) tiered royalties ranging from 10% to 30% of Medice's annual net sales of Vafseo in the Medice Territory, subject to reduction in certain circumstances. The royalties will expire on a country-by-country basis upon the latest to occur of (a) the date of expiration of the last-to-expire valid claim of any Company, Medice or joint patent that covers Vafseo in such country in the Medice Territory, (b) the date of expiration of data or regulatory exclusivity for Vafseo in such country in the Medice Territory and (c) the date that is twelve years from first commercial sale of Vafseo in such country in the Medice Territory. Under the Medice License Agreement, the Company retains the right to develop Vafseo for non-dialysis patients with anemia due to CKD in the Medice Territory. If the Company develops Vafseo for non-dialysis patients and Vafseo receives marketing approval in the Medice Territory, Medice will commercialize Vafseo for both indications in the Medice Territory. In this instance, the Company would receive 70% of the net product margin of any sales of Vafseo in the non-dialysis patient population, unless Medice requests to share the cost of the development necessary to gain approval to market Vafseo for non-dialysis patients in the Medice Territory and the parties agree on alternative financial terms. If the Company develops Vafseo for non-dialysis patients, the Company has determined that the activities under the Medice License Agreement represent joint operating activities in which both parties are active participants and of which both parties are exposed to significant risks and rewards that are dependent on the success of the activities. Accordingly, if the Company develops Vafseo for non-dialysis patients, the Company will account for the joint activities in accordance with ASC No. 808, Collaborative Arrangements, or ASC 808. Additionally, the Company has determined that in the context of the development of Vafseo for non-dialysis patients, Medice does not represent a customer as contemplated by ASC 606. As a result, the activities conducted pursuant to development activities for Vafseo for non-dialysis patients will be accounted for as a component of the related expense in the period incurred. The Medice License Agreement expires on the date of expiration of all payment obligations due thereunder with respect to Vafseo in the last country in the Medice Territory, unless earlier terminated in accordance with the terms of the Medice License Agreement. Either party may, subject to a cure period, terminate the Medice License Agreement in the event of the other party's uncured material breach. Medice has the right to terminate the Medice License Agreement in its entirety for convenience upon twelve months' prior written notice delivered on or after the date that is twelve months after the Medice Effective Date. The Company evaluated the elements of the Medice License Agreement in accordance with the provisions of ASC 606 and concluded Medice is a customer. The Company identified one performance obligation in connection with its obligations under the Medice License Agreement, which is the license, or License Performance Obligation. The transaction price at inception was comprised of the up-front payment of $10.0 million, of which the Company received $8.6 million during the quarter ended June 30, 2023. The remaining $1.4 million was withheld by the German Federal Tax Office and was included in prepaid expenses and other current assets as of December 31, 2024 on the audited consolidated balance sheets. The $1.4 million was received during the three months ended March 31, 2025. Pursuant to the terms of the Medice License Agreement, the up-front payment of $10.0 million is non-refundable and non-creditable against any other amount due to the Company and was allocated to the License Performance Obligation, which was satisfied as of the Medice Effective Date. As such, the Company recognized the $10.0 million up-front payment as license, collaboration and other revenue in the unaudited condensed consolidated statements of operations and comprehensive loss during the year ended December 31, 2023. In accordance with ASC 606, the Company will recognize sales-based royalties and milestone payments at the later of when the performance obligation is satisfied or the related sales occur. During the three months ended March 31, 2025, the Company recognized immaterial revenue from Medice royalties. The Company did not recognize any revenue from Medice royalties during the three months ended March 31, 2024. As of March 31, 2025, there were immaterial contract assets, and no accounts receivable, payables or deferred revenue in connection with the Medice License Agreement. Supply of Drug Product to Medice On September 13, 2024, the Company and Medice entered into a supply agreement, or the Medice Supply Agreement, under which the Company will supply Vafseo drug product to Medice for commercial and developmental use in the Medice Territory. The Company recognizes revenue under this arrangement when risk of loss passes to Medice, delivery has occurred, and Medice has accepted the product. The Company did not recognize any revenue under the Medice Supply Agreement during the three months ended March 31, 2025 or 2024. MTPC Collaboration Agreement On December 11, 2015, the Company and MTPC entered into a Collaboration Agreement, or the MTPC Agreement, providing MTPC with exclusive development and commercialization rights to Vafseo in the MTPC Territory, which was amended effective as of December 2, 2022. In addition, the Company supplies Vafseo to MTPC for both clinical and commercial use in the MTPC Territory. In February 2021, the Company entered into the Royalty Agreement with HCR, whereby the Company sold its right to receive royalties and sales milestones under the MTPC Agreement, subject to certain caps and other terms and conditions. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, for additional information and Note 12, License, Collaboration and Other Revenue, of the Notes to the Consolidated Financial Statements in the 2024 Form 10-K for a more detailed description of the MTPC Agreement. The Company evaluated the elements of the MTPC Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, MTPC, is a customer. The Company identified two performance obligations in connection with its material promises under the MTPC Agreement as follows: (i) License, Research and Clinical Supply Performance Obligation and (ii) Rights to Future Know-How Performance Obligation. The transaction price was comprised of: (i) the up-front payment of $20.0 million, (ii) the cost for the Phase 2 studies of $20.5 million, (iii) the cost of all clinical supply provided to MTPC for the Phase 3 studies, (iv) $10.0 million in development milestones received, (v) $25.0 million in regulatory milestones received and (vi) $7.3 million in royalties from net sales of Vafseo. The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. As of March 31, 2025, all development milestones and $25.0 million in regulatory milestones have been achieved. No other regulatory milestones have been assessed as probable of being achieved and as a result have been fully constrained. The Company allocates the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price. The Company developed a best estimate of the standalone selling price for the Rights to Future Know-How Performance Obligation primarily based on the likelihood that additional intellectual property covered by the license conveyed will be developed during the term of the arrangement and determined it is immaterial. As such, the Company did not develop a best estimate of standalone selling price for the License, Research and Clinical Supply Performance Obligation and allocated the entire transaction price to this performance obligation. Revenue for the License, Research and Clinical Supply Performance Obligation for the MTPC Agreement is being recognized using a proportional performance method, for which all deliverables have been completed. The Company recognizes any revenue from MTPC royalties in the period in which the sales occur. The Company recognized revenue from MTPC royalties of $0.4 million during each of the three months ended March 31, 2025 and 2024. As noted above, in February 2021, the Company entered into the Royalty Agreement, whereby the Company sold its right to receive these royalties and sales milestones under the MTPC Agreement, subject to certain caps and other terms and conditions. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, for additional information. The revenue is classified as license and other revenue in the accompanying unaudited condensed consolidated statements of operations and comprehensive income (loss). As of March 31, 2025, there were no accounts receivable, payables or deferred revenue and $0.4 million in contract assets recorded in connection with the MTPC Agreement. JT and Torii Sublicense Agreement The Company has an Amended and Restated Sublicense Agreement, which was amended in June 2013, with JT and Torii, or JT and Torii Sublicense Agreement, under which JT and Torii obtained the exclusive sublicense rights for the development and commercialization of ferric citrate hydrate in Japan. JT and Torii are responsible for the future development and commercialization costs in Japan. See Note 12, License, Collaboration and Other Revenue, of the Notes to the Consolidated Financial Statements in the 2024 Form 10-K for a more detailed description of this sublicense agreement. The Company evaluated the elements of the JT and Torii Sublicense Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, JT and Torii, is a customer. The Company identified two performance obligations in connection with its obligations under the JT and Torii Sublicense Agreement: (i) License and Supply Performance Obligation and (ii) Rights to Future Know-How Performance Obligation. The Company developed a best estimate of the standalone selling price for the Rights to Future Know-How Performance Obligation primarily based on the likelihood that additional intellectual property covered by the license conveyed will be developed during the term of the arrangement and determined it immaterial. As such, the Company allocated the entire transaction price to the License and Supply Performance Obligation. The Company recognized license revenue of $1.2 million during each of the three months ended March 31, 2025 and 2024 related to royalties earned on net sales of ferric citrate hydrate in Japan under the trade name Riona. The Company records the associated mid-single digit percentage of net sales royalty expense due to Panion, the licensor of Riona, in the same period as the royalty revenue from JT and Torii is recorded.

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- Definition The entire disclosure for collaborative arrangements in which the entity is a participant, including a) information about the nature and purpose of such arrangements; b) its rights and obligations thereunder; c) the accounting policy for collaborative arrangements; and d) the income statement classification and amounts attributable to transactions arising from the collaborative arrangement between participants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -SubTopic 10 -Topic 808 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479402/808-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b) -SubTopic 10 -Topic 808 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479402/808-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 808 -Publisher FASB -URI https://asc.fasb.org/808/tableOfContent + Details
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