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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-38558
https://cdn.kscope.io/5eb7af80037be44857125a6c6021dc00-tcda-20210331_g1.jpg
TRICIDA, INC.
(Exact name of registrant as specified in its charter)
Delaware46-3372526
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
7000 Shoreline Court, Suite 201, South San Francisco, CA 94080
(Address of principal executive offices, including zip code)
(415) 429-7800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading Symbol(s)Name of exchange on which registered
Common stock, par value $0.001 per shareTCDAThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
On April 30, 2021, the registrant had 50,272,725 shares of common stock, par value $0.001 per share, outstanding.



TABLE OF CONTENTS
Note Regarding Forward-Looking Statements
Part I. Financial Information
Item 1.Financial Statements (Unaudited):
Condensed Balance Sheets as of March 31, 2021 and December 31, 2020
Condensed Statements of Operations and Comprehensive Loss for the three months ended March 31, 2021 and 2020
Condensed Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020
Condensed Statements of Cash Flows for the three months ended March 31, 2021 and 2020
Notes to Condensed Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures about Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
Signatures




NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements generally can be identified by words such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
estimates of our expenses, capital requirements and our needs for additional financing;
the prospects of veverimer (also known as TRC101), our only investigational drug candidate, which is still in development;
our ability to obtain approval of our New Drug Application, or NDA, for veverimer from the U.S. Food and Drug Administration, or FDA, under either traditional approval or the Accelerated Approval Program, if at all;
our ability to resolve the deficiencies identified by the FDA in the Complete Response Letter and issues raised in the Appeal Denied Letter related to our NDA for veverimer;
our expectations regarding the timing of the completion of any nonclinical or clinical study;
the design of our renal outcomes trial, VALOR-CKD (also known as TRCA-303), including the sample size, trial duration, endpoint definition, event rate assumptions and eligibility criteria;
our expectations regarding the timing and location of the enrollment, distribution of enrollment across geographical regions, endpoint accrual, continuation, completion, outcome and reporting of results of our ongoing VALOR-CKD trial;
the outcome and results of our ongoing VALOR-CKD trial;
the market acceptance or commercial success of veverimer, if approved, and the degree of acceptance among physicians, patients, patient advocacy groups, health care payers and the medical community;
our expectations regarding competition, potential market size and the size of the patient population for veverimer, if approved for commercial use;
our expectations regarding the safety, efficacy and clinical benefit of veverimer;
our ability to achieve and maintain regulatory approval of veverimer, and any related requirements, restrictions, limitations and/or warnings in the label of veverimer;
our sales, marketing or distribution capabilities and our ability to commercialize veverimer, if we obtain regulatory approval;
our current and future agreements with third parties in connection with the manufacturing, commercialization, packaging and distribution of veverimer;
our expectations regarding the ability of our contract manufacturing partners to produce veverimer in the quantities and timeframe that we will require;
our expectations regarding our future costs of goods;
our ability to attract, retain and motivate key personnel;
the scope of protection we are able to establish and maintain for intellectual property rights covering veverimer;

1


potential claims relating to our intellectual property and third-party intellectual property;
the duration of our intellectual property estate that will provide protection for veverimer;
our ability to establish collaborations in lieu of obtaining additional financing;
the potential impact of pandemics, including COVID-19, on the health care system, financial markets and economy generally and on our business in particular; and
our financial performance.
These forward-looking statements are based on management’s current expectations, estimates, forecasts, and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Investors in our securities are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. Investors in our securities should, however, review the factors and risks we describe in the reports we will file from time to time with the Securities and Exchange Commission after the date of this Quarterly Report on Form 10-Q.

2


PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRICIDA, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
March 31,
2021
December 31, 2020
 
Assets
Current assets:
Cash and cash equivalents$40,510 $137,857 
Short-term investments177,221 171,670 
Prepaid expenses and other current assets2,989 4,488 
Total current assets220,720 314,015 
Long-term investments 22,757 
Property and equipment, net1,053 1,112 
Operating lease right-of-use assets13,395 13,801 
Total assets$235,168 $351,685 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$5,321 $3,508 
Current operating lease liabilities2,341 2,079 
Accrued expenses and other current liabilities32,543 28,671 
Total current liabilities40,205 34,258 
Term Loan, net 76,638 
Convertible Senior Notes, net120,775 118,670 
Non-current operating lease liabilities12,627 13,046 
Other long-term liabilities 202 
Total liabilities173,607 242,814 
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.001 par value; 40,000,000 shares authorized, no shares issued or outstanding as of March 31, 2021 and December 31, 2020.
  
Common stock, $0.001 par value; 400,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 50,272,725 and 50,210,779 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.
50 50 
Additional paid-in capital748,712 742,555 
Accumulated other comprehensive income (loss)(41)64 
Accumulated deficit(687,160)(633,798)
Total stockholders’ equity61,561 108,871 
Total liabilities and stockholders’ equity$235,168 $351,685 
See accompanying notes to condensed financial statements (unaudited).

3


TRICIDA, INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(in thousands, except share and per share amounts)
 Three Months Ended
March 31,
 20212020
Operating expenses:
Research and development$32,175 $49,381 
General and administrative9,895 23,526 
Total operating expenses42,070 72,907 
Loss from operations(42,070)(72,907)
Other income (expense), net445 813 
Interest expense(5,613)(2,020)
Loss on early extinguishment of Term Loan(6,124) 
Net loss(53,362)(74,114)
Other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale investments, net of tax(105)(232)
Total comprehensive loss$(53,467)$(74,346)
Net loss per share, basic and diluted$(1.06)$(1.49)
Weighted-average number of shares outstanding, basic and diluted50,247,698 49,841,407 
See accompanying notes to condensed financial statements (unaudited).

4


TRICIDA, INC.
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share amounts)
 Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ Equity
 SharesAmount
Balance at December 31, 202050,210,779 $50 $742,555 $64 $(633,798)$108,871 
Issuance of common stock under equity incentive plans61,946 — 115 — — 115 
Stock-based compensation— — 6,042 — — 6,042 
Net unrealized gain (loss) on available-for-sale investments, net of tax— — — (105)— (105)
Net loss— — — — (53,362)(53,362)
Balance at March 31, 202150,272,725 $50 $748,712 $(41)$(687,160)$61,561 

 Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ Equity
 SharesAmount
Balance at December 31, 201949,763,176 $50 $632,647 $193 $(369,007)$263,883 
Issuance of common stock under equity incentive plans150,056 — 550 — — 550 
Stock-based compensation— — 8,374 — — 8,374 
Net unrealized gain (loss) on available-for-sale investments, net of tax— — — (232)— (232)
Net loss— — — — (74,114)(74,114)
Balance at March 31, 202049,913,232 $50 $641,571 $(39)$(443,121)$198,461 
See accompanying notes to condensed financial statements (unaudited).

5


TRICIDA, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Three Months Ended
March 31,
 20212020
Operating activities:
Net loss$(53,362)$(74,114)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization134 230 
Non-cash operating lease costs248 320 
Accretion (amortization) of premiums and discounts on investments209 (341)
Accretion of Term Loan and Convertible Senior Notes2,628 751 
Loss on early extinguishment of Term Loan6,124  
Stock-based compensation6,042 8,374 
Changes in fair value of compound derivative liability
(202)846 
Other non-cash items(29) 
Changes in operating assets and liabilities:
Prepaid expenses and other assets1,520 (777)
Accounts payable1,815 4,892 
Accrued expenses and other liabilities3,895 8,910 
Operating lease liabilities (125)
Net cash used in operating activities(30,978)(51,034)
Investing activities:
Purchases of investments(59,932)(46,045)
Proceeds from maturities of investments76,824 88,867 
Purchases of property and equipment(76)(360)
Net cash provided by investing activities16,816 42,462 
Financing activities:
Proceeds from issuance of common stock under equity incentive plans115 567 
Repayment of leasehold improvement loan(15)(14)
Cash paid for early extinguishment of Term Loan(83,285) 
Net cash provided by (used in) financing activities(83,185)553 
Net increase (decrease) in cash and cash equivalents(97,347)(8,019)
Cash and cash equivalents at beginning of period137,857 18,574 
Cash and cash equivalents at end of period$40,510 $10,555 
Supplemental disclosures
Cash paid for interest$1,774 $1,211 
Supplemental disclosures of non-cash investing and financing activities
Purchases of property and equipment included in accounts payable and accrued expenses$ $206 
See accompanying notes to condensed financial statements (unaudited).

6


TRICIDA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION
Organization—Tricida, Inc., or the Company, was incorporated in the state of Delaware on May 22, 2013 and was granted its certification of qualification in the state of California on August 5, 2013, or inception. The Company is focused on the development and commercialization of its investigational drug candidate, veverimer (also known as TRC101), a non-absorbed, orally-administered polymer designed to treat metabolic acidosis in patients with chronic kidney disease.
The Company has sustained operating losses and expects such annual losses to continue over the next several years. The Company’s ultimate success depends on the outcome of its research and development and commercialization activities for veverimer, for which it expects to incur additional losses in the future. Through March 31, 2021, the Company has relied primarily on the proceeds from equity offerings and debt financing to finance its operations.
The Company recognizes that it may need to raise additional capital to fully implement its business plan, and if market conditions are favorable or if the Company identifies specific strategic opportunities or needs, intends to do so through the issuance of equity, borrowings, or strategic alliances with partner companies. However, if such financing is not available at adequate levels or on reasonable terms, the Company will need to reevaluate its operating plans and could be required to significantly reduce operating expenses and delay, reduce the scope of or eliminate some of its development programs or its future commercialization efforts, out-license intellectual property rights to its investigational drug candidates and sell unsecured assets, or a combination of the above, any of which may have a material adverse effect on its business, results of operations, financial condition and/or its ability to fund its scheduled obligations on a timely basis or at all.
Basis of Presentation—The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed financial statements as of and for the three months ended March 31, 2021 and 2020 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The condensed balance sheet as of December 31, 2020 has been derived from audited financial statements.
Although the Company believes that the disclosures in these condensed financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.
Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
There have been no material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Recent Accounting Pronouncements
Adopted Standards
Effective January 1, 2021, the Company adopted, on a prospective basis, Accounting Standards Update, or ASU, No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, or ASU 2019-12, which simplifies the accounting for income taxes. The adoption of ASU 2019-12 did not have a significant impact on the Company's condensed financial statements.

7


Standards Not Yet Effective
In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), or ASU 2020-06. ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in Accounting Standards Codification, or ASC, 470-20, Debt – Debt with Conversion and Other Options, or ASC 470-20, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. The guidance in ASC 470-20 applies to convertible instruments for which the embedded conversion features are not required to be bifurcated from the host contract and accounted for as derivatives. In addition, the amendments revise the scope exception from derivative accounting in ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification (and, therefore, not accounted for as derivatives), as well as fewer embedded features requiring separate accounting from the host contract. The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share, or EPS, for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. ASU 2020-06 is effective for public business entities for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2021 on a prospective basis, and early adoption is permitted. The Company will adopt ASU 2020-06 effective January 1, 2022, and expects to use the modified retrospective method. On adoption, the Company expects to account for the Convertible Senior Notes as a single liability measured at amortized cost resulting in reduced non-cash interest expense due to the de-recognition of the remaining debt discount associated with the equity component.
NOTE 3. FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Company’s financial assets and liabilities are determined in accordance with the fair value hierarchy established in the FASB's ASC Topic 820, Fair Value Measurements and Disclosures, or Topic 820. Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy of Topic 820 requires an entity to maximize the use of observable inputs when measuring fair value and classifies those inputs into three levels:
Level 1—Observable inputs, such as quoted prices in active markets;
Level 2—Inputs, other than the quoted prices in active markets, which are observable either directly or indirectly such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life; and
Level 3—Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Our financial instruments consist primarily of cash and cash equivalents, short-term and long-term investments, accounts payable and the Convertible Senior Notes.
Cash, cash equivalents and investments are reported at their respective fair values on the Company's condensed balance sheets. Where quoted prices are available in an active market, securities are classified as Level 1. The Company classifies money market funds and U.S. Treasury securities as Level 1. When quoted market prices are not available for a specific security, then the Company estimates fair value by using quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models incorporate expected future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to benchmark yields, reported trades and broker/dealer quotes. Where applicable the market approach utilizes prices and information from market transactions for similar or identical assets. The Company classifies U.S. government agency securities, commercial paper and corporate debt securities as Level 2. The Company's short-term and long-term investments are classified as available-for-sale.

8


The following tables set forth the value of the Company's financial assets remeasured on a recurring basis based on the three-tier fair value hierarchy by significant investment category as of March 31, 2021 and December 31, 2020.
March 31, 2021
Reported as:
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueCash and Cash EquivalentsShort-Term InvestmentsLong-Term Investments
Cash$2,507 $— $— $2,507 $2,507 $— $— 
Level 1:
Money market funds38,003 — — 38,003 38,003 — — 
U.S. Treasury securities8,110 2  8,112  8,112  
Subtotal46,113 2  46,115 38,003 8,112  
Level 2:
U.S. government agency securities 47,771 20  47,791  47,791  
Commercial paper
102,166 7 (3)102,170  102,170  
Corporate debt securities
19,123 26 (1)19,148  19,148  
Subtotal169,060 53 (4)169,109  169,109  
Total assets measured at fair value
$217,680 $55 $(4)$217,731 $40,510 $177,221 $ 

December 31, 2020
Reported as:
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueCash and Cash EquivalentsShort-Term InvestmentsLong-Term Investments
Cash$2,011 $— $— $2,011 $2,011 $— $— 
Level 1:
Money market funds25,862 — — 25,862 25,862 — — 
U.S. Treasury securities8,157 1 (1)8,157  8,157  
Subtotal34,019 1 (1)34,019 25,862 8,157  
Level 2:
U.S. government agency securities64,370 15 (3)64,382  41,625 22,757 
Commercial paper
159,183 16 (6)159,193 97,989 61,204  
Corporate debt securities
72,546 134 (1)72,679 11,995 60,684  
Subtotal296,099 165 (10)296,254 109,984 163,513 22,757 
Total assets measured at fair value
$332,129 $166 $(11)$332,284 $137,857 $171,670 $22,757 
There were no gross realized gains and gross realized losses for the three months ended March 31, 2021 and 2020. All available-for-sale investments held as of March 31, 2021 have a maturity of one year of less.
The following table presents a reconciliation of financial liabilities related to the compound derivative liability associated with the Loan and Security Agreement, or Term Loan, with Hercules Capital Inc., or Hercules, measured at fair value on a recurring basis using Level 3 unobservable inputs for the three months ended March 31, 2021 and 2020. The key valuation assumptions used were a discount rate and the probability of the occurrence of certain events. In conjunction with early extinguishment of the Term Loan on March 12, 2021, the Company extinguished the compound derivative liability associated with the Term Loan.

9


Three Months Ended March 31,
20212020
(in thousands)Compound Derivative LiabilityCompound Derivative Liability
Fair value at beginning of period$202 $977 
Change in fair value— 846 
Extinguishment of compound derivative liability upon extinguishment of Term Loan(202)— 
Fair value at end of period$ $1,823 
The estimated fair value of the Convertible Senior Notes was $84.2 million as of March 31, 2021 and they were classified as Level 3. The key valuation assumptions used consist of the discount rate of 22.6% and volatility of 87.0%.
NOTE 4. BORROWINGS
Term Loan
On March 12, 2021, the Company repaid the outstanding principal of $75.0 million and fees in the amount of $8.3 million to Hercules under the Term Loan. The Company recognized a loss on early debt extinguishment of $6.1 million which represents the remaining unamortized issuance costs. In conjunction with early extinguishment of the Term Loan on March 12, 2021, the Company extinguished the compound derivative liability associated with the Term Loan.
Convertible Senior Notes
On May 22, 2020, the Company issued $200.0 million aggregate principal amount of 3.50% convertible senior notes due 2027, or Convertible Senior Notes. The Convertible Senior Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock at the Company’s election at an initial conversion rate of 30.0978 shares of the Company’s common stock per $1,000 principal amount of the Convertible Senior Notes, which is equivalent to an initial conversion price of approximately $33.23 per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. It is the Company’s current intent to settle conversions through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock. As of March 31, 2021, the “if-converted value” did not exceed the remaining principal amount of the Convertible Senior Notes.
At issuance, the Convertible Senior Notes were bifurcated into liability and equity components and accounted for separately. The carrying amount of the liability component was calculated to be $117.7 million by measuring the fair value of similar debt instruments that do not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Convertible Senior Notes. The carrying amount of the equity component was calculated to be $82.3 million and was recorded in additional paid-in capital. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The allocation of proceeds into the equity component resulted in a debt discount for the Convertible Senior Notes that is amortized to interest expense at an effective interest rate of 13.5% over the effective life of the Convertible Senior Notes of 7.0 years, using the effective interest method.

10


The following table presents the carrying amount of the liability and equity components of the Convertible Senior Notes as of March 31, 2021.
(in thousands)March 31,
2021
Liability component:
Principal $200,000 
Unamortized discount - equity component(75,456)
Unamortized underwriter discounts and issuance costs(3,769)
Net carrying amount$120,775 
Equity component, net of underwriter discounts and issuance costs$79,498 
The remaining unamortized debt discount will be amortized over approximately 6.2 years which is also the remaining life of the Senior Convertible Notes.
The following table presents the interest expense related to the Convertible Senior Notes for the three months ended March 31, 2021.
(in thousands)Three Months Ended March 31, 2021
Contractual interest expense$1,750 
Amortization of debt discount2,047 
Amortization of underwriter discounts and issuance costs59 
Total interest expense$3,856 

NOTE 5. COMMITMENTS AND CONTINGENCIES
The Company has contractual obligations from its operating lease, manufacturing and service contracts, tenant improvement loan, and other research and development activities. The following table aggregates the Company’s material expected contractual obligations and commitments as of March 31, 2021.
March 31, 2021
(in thousands)Total
2021(4)
2022 - 20232024 - 2025Thereafter
Convertible Senior Notes(1)
$245,500 $7,000 $14,000 $14,000 $210,500 
Lease obligations(2)
19,033 1,739 5,780 6,131 5,383 
Tenant improvement loan23 23    
Manufacturing and service contracts(3)
604,443 17,725 91,810 116,450 378,458 
Total contractual obligations and commitments$868,999 $26,487 $111,590 $136,581 $594,341 
(1)Comprised of interest payable and principal repayment due under the Convertible Senior Notes' Indenture.
(2)Comprised of rent payments under the amended lease for the Company's offices and laboratory space executed on August 14, 2019.
(3)The purchase obligations are comprised of the Company's non-cancelable purchase commitments under the Supply Agreement with Patheon. These amounts are based on forecasts that may include estimates of future market demand, quantity discounts and manufacturing efficiencies.
(4)Remaining nine months.
Other Commitments 
On October 4, 2019, the Company and Patheon Austria GmbH & Co KG, or Patheon, entered into a multi-year Manufacturing and Commercial Supply Agreement and on March 30, 2021, Tricida and Patheon entered into Amendment No. 1 to the Manufacturing and Commercial Supply Agreement, collectively the Supply Agreement, under which Patheon agreed to manufacture and supply veverimer to support the Company's commercialization efforts. Patheon has also agreed to manufacture and supply veverimer to support the Company’s drug development and clinical trial activities. Under the Supply Agreement, the Company is obligated to make certain purchases of API. The Company and Patheon are also parties to a Master Development/Validation Services and Clinical/Launch Supply Agreement, or the MDA, pursuant to which Patheon agreed to manufacture and supply veverimer. Certain

11


manufacturing activities previously governed by the MDA are now subject to the Supply Agreement, whereas other ongoing manufacturing activities under the MDA will continue to be governed by the MDA until such activities are complete.
The Supply Agreement may be terminated by either party following an uncured material breach by the other party, in the event the other party becomes insolvent or subject to bankruptcy proceedings, or in connection with a force majeure event that continues beyond 12 months. In addition, the Supply Agreement may be terminated by the Company upon the occurrence of certain regulatory events or actions, including: (i) if the Company does not obtain regulatory approval for veverimer by a specified date or (ii) if the Company terminates its commercialization of veverimer or fails to launch veverimer by a specified date. The Company’s obligation to purchase veverimer is subject to minimum and maximum annual commitments, with the minimum commitments subject to modest reduction in certain circumstances. Patheon has agreed to make facility improvements under the Supply Agreement and will be the exclusive owner of the purchased equipment and facility improvements. Patheon may manufacture other products with the facility improvements when not occupied by manufacturing veverimer. Under the Supply Agreement, the Company has agreed to reimburse Patheon up to a specified amount for plant modifications. These payments will be expensed to research and development prior to FDA approval of veverimer.
The Company also enters into other contracts in the normal course of business with contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on short notice and are cancellable contracts and accordingly, are not included in the contractual obligations and disclosures summarized above.
Contingencies
On January 6, 2021, a putative securities class action was filed in the U.S. District Court for the Northern District of California against the Company and its CEO and CFO, Pardi v. Tricida, Inc., et al., 21-cv-00076 (the “Securities Class Action”). The Securities Class Action complaint alleges that during the period September 4, 2019 through October 28, 2020 (the “Class Period”), the Company and its senior officers violated the federal securities laws, including under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, through alleged public misrepresentations and/or omissions of material facts concerning the Company's NDA for veverimer and the likelihood and timing of approval of veverimer by the FDA. In April 2021, the court appointed Jeffrey Fiore as lead plaintiff and Block & Leviton LLP as lead plaintiffs’ counsel. Block & Leviton is expected to file an amended complaint in early June 2021. No damages amount is specified in the Securities Class Action.
On February 15, 2021, a derivative action was filed in the District of Delaware, brought by and on behalf of Tricida, Inc. as a Nominal Defendant, against the Company’s directors as well as its CEO and CFO, Ricks v. Alpern et al., Case No, 1:21-cv-000205 (the “Ricks Derivative Case”). The Ricks Derivative Case is based on the allegations of the Securities Class Action and asserts that by allowing the Company and senior executives to make the allegedly false and misleading statements at issue in the Securities Class Action, the defendants breached their fiduciary duties and wasted corporate assets. Additionally, the complaint asserts claims against the senior officers for violation of Sections 10(b) and 21D of the Securities Exchange Act of 1934. No damages amount is specified in the Ricks Derivative Case.
On April 8, 2021 a second derivative action was filed in the District of Delaware, brought by and on behalf of Tricida, Inc. as a Nominal Defendant, against the Company’s directors as well as its CEO and CFO, Goodman v. Klaerner et al., Case No, 1:21-cv-00510 (the “Goodman Derivative Case” and collectively with the Ricks Derivative Case, the "Derivative Cases"). As with the Ricks Derivative Case, the Goodman Derivative Case is based on the allegations of the Securities Class Action and asserts that by allowing the Company and senior executives to make the allegedly false and misleading statements at issue in the Securities Class Action, the defendants breached their fiduciary duties. No damages amount is specified in the Goodman Derivative Case.
As of March 31, 2021, the Company has not provided for a loss contingency in its condensed financial statements relating to the Securities Class Action and the Derivative Cases since it is not probable that a loss has been incurred.
The Company does not believe that any ultimate liability resulting from any of these claims will have a material adverse effect on its results of operations, financial position, or liquidity. However, the Company cannot give any assurance regarding the ultimate outcome of these claims, and their resolution could be material to operating results for any particular period. Further, while there are no other material legal proceedings that the Company is

12


aware of, the Company may become party to various claims and complaints arising in the ordinary course of business.
NOTE 6. RESTRUCTURING
Third Quarter 2020 Restructuring
In August 2020, the Company received a Complete Response Letter, or CRL, from the FDA related to its NDA for veverimer. Due to the resulting delay in regulatory approval and commercialization of veverimer, on September 10, 2020, the Compensation Committee of the Board of Directors approved the Tricida, Inc. 2020 Reduction in Force Severance Benefit Plan, or 2020 Restructuring Plan. On September 18, 2020, the Company implemented a restructuring, or Third Quarter 2020 Restructuring, under the 2020 Restructuring Plan to streamline the organization and preserve capital that included the elimination of approximately 21.5% of the Company's workforce and other cost reductions.
Following is a summary of accrued restructuring costs related to the Third Quarter 2020 Restructuring as of March 31, 2021 and December 31, 2020.
(in thousands)Severance and Benefits Costs Contract Termination Costs Total
Balance at January 1, 2020$ $ $ 
Charges2,524 136 2,660 
Cash payments made(2,456)(137)(2,593)
Non-cash and other adjustments(6)1 (5)
Balance at December 31, 2020$62 $ $62 
Balance at March 31, 2021$62 $ $62 
Fourth Quarter 2020 Restructuring
On October 25, 2020, the Company's Board of Directors approved and on October 28, 2020, the Company implemented a restructuring under the 2020 Restructuring Plan, or Fourth Quarter 2020 Restructuring, to reduce operating costs and better align its workforce with the needs of its business following the completion of the Type A meeting with the FDA in October 2020. The Fourth Quarter 2020 Restructuring resulted in the elimination of approximately 60.0% of the Company's workforce and included one-time termination severance payments and other employee-related costs, and exit costs including contract termination costs and accelerated depreciation of capitalized software.
Following is a summary of accrued restructuring costs related to the Fourth Quarter 2020 Restructuring as of March 31, 2021 and December 31, 2020.
(in thousands)Severance and Benefits Costs Contract Termination Costs Other Associated CostsTotal
Balance at January 1, 2020$ $ $ $ 
Charges7,338 3,077 679 11,094 
Cash payments made(3,555)(2,032) (5,587)
Non-cash and other adjustments (34)(679)(713)
Balance at December 31, 2020$3,783 $1,011 $ $4,794 
Cash payments made(4,013)(622) (4,635)
Other283 (63) 220 
Balance at March 31, 2021$53 $326 $ $379 
Restructuring costs of $0.2 million were recorded in operating expenses in our condensed statements of operations and comprehensive loss for the three months ended March 31, 2021.
NOTE 7. NET LOSS PER SHARE

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The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the three months ended March 31, 2021 and 2020.
 Three Months Ended
March 31,
 (In thousands, except share and per share amounts)20212020
Numerator:
Net loss$(53,362)$(74,114)
Denominator:
Weighted-average common shares outstanding50,247,698 49,845,621 
Less: weighted-average shares subject to repurchase (4,214)
Weighted-average number of shares used in basic and diluted net loss per share50,247,698 49,841,407 
Net loss per share, basic and diluted$(1.06)$(1.49)
Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive.
The following weighted-average outstanding common stock equivalents were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive.
 
March 31,
 
20212020
Warrants to purchase common stock31,352 131,998 
Assumed conversion of Convertible Senior Notes6,019,560  
Common stock subject to repurchase 3,780 
Stock options and RSUs issued and outstanding11,704,679 9,009,511 
Total potential common shares excluded from the computation of diluted net loss per share17,755,591 9,145,289 


14


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks and uncertainties. Investors in our securities should review Item 1A. “Risk Factors” for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Our goal is to slow the progression of chronic kidney disease, or CKD, through the treatment of metabolic acidosis. We are a pharmaceutical company focused on the development and commercialization of our investigational drug candidate, veverimer (also known as TRC101), a non-absorbed, orally-administered polymer designed to treat metabolic acidosis by binding and removing acid from the gastrointestinal tract. Metabolic acidosis is a serious condition commonly caused by CKD and is believed to accelerate the progression of kidney deterioration. It can also lead to bone loss, muscle wasting and impaired physical function. Metabolic acidosis in patients with CKD is typically a chronic disease and, as such, requires long-term treatment to mitigate its deleterious consequences.
There are currently no therapies approved by the U.S. Food and Drug Administration, or FDA, for treating chronic metabolic acidosis. We estimate that metabolic acidosis affects approximately 3 million patients with CKD in the United States, and we believe that treating metabolic acidosis and slowing the progression of CKD in patients with metabolic acidosis and CKD represents a significant unmet medical need and market opportunity.
Veverimer is an in-house discovered, new chemical entity. We have a broad intellectual property estate that we believe will provide patent protection for veverimer until at least 2038 in the United States, at least 2035 in Europe and Russia, and at least 2034 in Australia, China, Hong Kong, Israel, Japan, Mexico and certain other markets.
Veverimer is a low-swelling, spherical polymer bead that is approximately 100 micrometers in diameter. It is a single, high molecular weight, crosslinked polyamine molecule. The size of veverimer prevents systemic absorption from the GI tract. The high degree of cross-linking within veverimer limits swelling and the overall volume in the GI tract, with the goal of facilitating good GI tolerability. The high amine content of veverimer provides proton binding capacity of approximately 10 mEq/gram of polymer. The size exclusion built into the three-dimensional structure of the polymer enables preferential binding of chloride versus larger inorganic and organic anions, including phosphate, citrate, fatty acids and bile acids. This size exclusion mechanism allows a majority of the binding capacity to be used for hydrochloric acid binding.
We submitted our New Drug Application, or NDA, for veverimer through the Accelerated Approval Program as a chronic treatment for metabolic acidosis and slowing of kidney disease progression in patients with metabolic acidosis associated with CKD for review by the FDA in August 2019. Results from our Phase 3, 12-week efficacy trial, TRCA-301, and a follow-on 40-week extension trial, TRCA-301E, formed the primary basis of our NDA submission. The TRCA-301 trial met both its primary and secondary endpoints in a highly statistically significant manner (p < 0.0001 for both the primary and secondary endpoints). The TRCA-301E trial met its primary and all secondary endpoints. The Lancet published the results of the TRCA-301 trial in March 2019 and the results of the TRCA-301E trial in June 2019.
In August 2020, we received a Complete Response Letter, or CRL, from the FDA related to our NDA for veverimer. According to the CRL, the FDA is seeking additional data beyond the TRCA-301/TRCA-301E trial regarding the magnitude and durability of the treatment effect of veverimer on the surrogate marker of serum bicarbonate and expressed concern regarding whether the demonstrated effect size would be reasonably likely to predict clinical benefit. In addition, the CRL questioned the applicability of the treatment effect to the U.S. population and the practice of medicine in the United States. The FDA also expressed concern as to the reliability of the findings given that the findings for the TRCA-301/TRCA-301E trial, were driven by a single, high-enrolling trial site located in Eastern Europe. The CRL did not raise any concerns related to FDA’s completed inspection of the highest enrolling clinical trial site in the TRCA-301/TRCA-301E trial and there was no FDA Form 483 issued. There were no safety, clinical pharmacology/biopharmaceutics, CMC, or non-clinical issues identified in the CRL. The CRL provided multiple options for resolving the identified deficiencies, including submission of the data from at least one

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additional adequate and well-controlled trial demonstrating the efficacy of veverimer for the treatment of metabolic acidosis associated with CKD.
We held an End-of-Review Type A meeting, or Type A meeting, with the FDA's Division of Cardiology and Nephrology, or the Division, in October 2020. The Division agreed, in principle, that an interim analysis of serum bicarbonate data from the VALOR-CKD trial proposed by Tricida could address the Division's concerns regarding the reliability of the TRCA-301/TRCA-301E trial data and the relevance of those trial findings to the U.S. population provided certain conditions were met. Based on other feedback from the FDA during the Type A meeting, we believed the Division would also require evidence of veverimer's effect on CKD progression from a near-term interim analysis of the VALOR-CKD trial for accelerated approval and that the FDA would be unlikely to rely solely on serum bicarbonate data for determination of efficacy. Accordingly, we submitted a Formal Dispute Resolution Request, or FDRR, solely requesting that the Office of New Drugs, or OND, find that the magnitude of serum bicarbonate change seen in the TRCA-301/TRCA-301E trial is reasonably likely to predict clinical benefit in the treatment of metabolic acidosis associated with CKD and that it can therefore serve as the basis for accelerated approval.
In February 2021, the OND issued a decision on our FDRR. While the OND acknowledged that the TRCA-301 and TRCA-301E trials met their serum bicarbonate endpoints with statistical significance, the OND denied the appeal. In its Appeal Denied Letter, or ADL, the OND not only addressed the issue of magnitude of serum bicarbonate change, but cited all of the deficiencies in the CRL in concluding that the data provided in support of the veverimer NDA did not support approval through the Accelerated Approval Program. The OND concluded that the magnitude of the increases in serum bicarbonate levels shown in the TRCA-301/TRCA-301E trial was not of sufficient size or duration to establish that treatment with veverimer would be reasonably likely to provide a discernible reduction in CKD progression. In addition, the OND found that the intended confirmatory trial, VALOR-CKD (also known as TRCA-303), was underpowered to detect a 13% reduction in slowing of CKD progression. This finding was based on information included in the initial NDA submission including the placebo-subtracted LS mean change from baseline in serum bicarbonate observed in the TRCA-301/TRCA-301E trial and the original Predictive MA Model. The OND also raised concerns regarding the robustness of the study results given that the veverimer NDA was supported by a single registrational trial (TRCA-301/TRCA-301E), which must, alone, provide persuasive evidence of benefit. Specifically, the OND noted concerns around adequate blinding, the trial results being strongly influenced by a single site, and the majority of sites for the TRCA-301/TRCA-301E trial being in Eastern Europe, where differences in patient management, including concomitant medications and diet, might affect the treatment response to veverimer and raise a concern of the applicability to a U.S. patient population. The OND also stated that, while trial results in the TRCA-301/TRCA-301E trial showed improvement in two patient-reported measures, the KDQOL Physical Functioning Survey and the Repeated Chair Stand Test, the OND viewed this subjective data from a single trial with skepticism in the absence of data from a second trial with similar results, and noted that both endpoints would require rigorous blinding to support robust conclusions. However, the OND noted that both of these changes, if eventually established by one or more additional trials, would indicate a potentially meaningful benefit of veverimer treatment—especially in CKD patients who have physical functional impairments. Separate from the ADL, we previously received feedback from the Division of Clinical Outcome Assessment, or DCOA, that reliance on these physical function endpoints for approval may require further validation.
Based on the ADL, we believe that we now have greater clarity on the potential path for approval of veverimer through the Accelerated Approval Program. The OND suggested that we meet with the Division to discuss submission of Week 52 serum bicarbonate results from the full randomized trial population of VALOR-CKD and that the trial should include a substantial portion of patients from the United States or from regions with “U.S.-like” patients. If the results of this trial were to demonstrate that veverimer provides a meaningfully larger treatment effect than seen in the TRCA-301/TRCA-301E trial, then this trial, along with the results from the TRCA-301/TRCA-301E trial, could address the concerns raised in the CRL regarding the limitations and the size of the treatment response observed in the TRCA-301/TRCA-301E trial. However, whether the extent of increase in serum bicarbonate in any subsequent submission based on VALOR-CKD would support accelerated approval will remain a review issue, and will, in part, reflect the Division’s assessment of the adequacy (i.e., power) of VALOR-CKD to detect the anticipated treatment effect of CKD progression in a reasonable timeframe.
Although the ADL provides greater clarity on the potential path for approval of veverimer through the Accelerated Approval Program, we believe the timeline to meet the requirements for accelerated approval as suggested in the ADL may not result in the most rapid development path for veverimer. For example, if either of the planned interim analyses in VALOR-CKD for early stopping for efficacy results in positive renal outcomes data, this data could be available before the week 52 serum bicarbonate data from the fully enrolled VALOR-CKD trial

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suggested in the ADL and could serve as the basis for resubmission of the NDA. If the VALOR-CKD trial is stopped early for efficacy based on analysis of the primary endpoint (i.e., DD40) at either of the two planned interim analyses, additional data on the effect of veverimer on (1) CKD progression; (2) physical functioning; and (3) serum bicarbonate will become available. If we are unable to ensure that we have adequate resources to complete the trial in accordance with the protocol, we may explore the possibility of stopping the trial early for administrative reasons, in which case the analysis of the primary endpoint would use all alpha remaining at that time and the data may or may not be sufficient to support a resubmission and/or approval of the NDA. An administrative stop is not certain, and the timing would be independent of the planned interim analyses. In any event, we believe data from VALOR-CKD will be very important in furthering our understanding of the regulatory path for approval of veverimer. As such, we intend to continue the execution of the VALOR-CKD trial with consideration of both the accelerated and traditional approval pathways. Resubmission and approval of the veverimer NDA may require additional clinical data beyond that provided by the VALOR-CKD trial.
Our ongoing VALOR-CKD trial is a randomized double-blind, placebo-controlled time-to-event trial. The primary endpoint event in VALOR-CKD is defined as renal death, end-stage renal disease, or ESRD, or a confirmed ≥ 40% reduction in estimated glomerular filtration rate (eGFR) (DD40). We anticipate randomizing approximately 1,600 subjects in VALOR-CKD and the trial is currently designed to terminate when the independent blinded Clinical Endpoint Adjudication Committee, or CEAC, has positively adjudicated 511 subjects with primary endpoint events, which is anticipated to occur in the first half of 2024. The VALOR-CKD trial also includes interim analyses for early stopping for efficacy after 150 primary endpoint events (anticipated in the second half of 2021, based on the current rate of event accrual) and 250 primary endpoint events (anticipated in mid-2022, based on the current rate of event accrual) have accrued. These interim analyses will be conducted by an independent unblinded Interim Analysis Committee. If the independent unblinded Interim Analysis Committee does not recommend stopping the trial early for efficacy, we will receive no information from these interim analyses. The VALOR-CKD trial also includes, as its first two secondary efficacy endpoints, evaluation of the effect of veverimer versus placebo after one year of treatment on patient-reported and objective measures of physical functioning, using the KDQOL Physical Functioning Survey and the Repeated Chair Stand test, respectively. Although not part of any efficacy endpoints, the VALOR-CKD trial will also provide information regarding the change from baseline in serum bicarbonate in veverimer and placebo-treated subjects.
We initiated enrollment in the VALOR-CKD trial in the fourth quarter of 2018 and have established sites throughout North America, Europe, Latin America and Asia-Pacific. As of May 7, 2021, the VALOR-CKD trial has randomized 1,440 of 1,600 subjects with an average treatment duration of approximately 15 months and has accrued 97 subjects with positively adjudicated primary endpoint events. One event is under review and requires an additional confirmatory value. In November 2020, based on feedback from the FDA, recruitment for VALOR-CKD was closed in all regions except for the United States, Canada and Western Europe; however, to reach our goal of completing enrollment in the trial by the end of 2021, we have reopened recruitment at sites in Latin America and Asia-Pacific. We do not intend to reopen recruitment at sites in Eastern Europe. At the end of recruitment, we anticipate approximately 67% of subjects to be enrolled at Eastern European sites, 10-20% at U.S., Western European and Canadian sites, and the remainder at Latin American and Asia-Pacific region sites. We intend to ensure that no single site in the VALOR-CKD trial provides ≥ 5% of the total number of trial subjects. The FDA’s acceptance of the VALOR-CKD data in support of an NDA resubmission, including its assessment of the magnitude and durability of the veverimer treatment effect across the various geographical regions where the study is conducted and the acceptability of the data from non-U.S. countries or regions which will comprise a substantial proportion of the data from the trial, will ultimately be a review issue.
Together with our investigators, contract research organizations, or CROs, and other contract service providers, we are regularly assessing the potential impact of the COVID-19 pandemic on recruitment and retention of subjects in, and power of, our ongoing VALOR-CKD trial. At this time, safety monitoring activities, adjudication of endpoint events and provision of clinical trial supplies have not been materially affected by COVID-19. The annualized rate of all-cause mortality in VALOR-CKD is higher than we estimated when designing the trial, in part due to the COVID-19 pandemic. We estimated the study would have an annualized study discontinuation rate, which comprises deaths, subjects lost to follow up and those who withdraw their consent to continue to participate and be followed in the study, of 5%; currently the annualized study discontinuation rate is approximately 6%. While we do not believe the ongoing VALOR-CKD trial has been materially affected to date by the COVID-19 pandemic, to the extent current trends continue, there may be negative impacts on the trial in the future, including but not limited to patient recruitment, retention, compliance with the study protocol and powering. We have provided investigators additional guidance per general FDA and European Medicines Agency, or EMA, recommendations on clinical trial conduct during COVID-19 to ensure the ongoing VALOR-CKD trial is effectively conducted with the utmost attention

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to trial subject and investigator safety while maintaining compliance with applicable clinical trial regulations and principles of Good Clinical Practice, and minimizing risks to the trial’s integrity. We will continue to monitor the potential impact that COVID-19 may have on our ongoing VALOR-CKD trial.
At this time, we believe we have sufficient drug substance and access to sufficient drug product manufacturing capacity to supply the anticipated demand of our ongoing VALOR-CKD trial through conclusion of the trial. Veverimer drug substance manufacturing is conducted for us by Patheon Austria GmbH & Co KG, or Patheon, in their Linz, Austria facility. We are in regular communication with Patheon and PCI Pharma Services, our drug product manufacturer and, to our knowledge, there have not been business disruptions at these sites due to COVID-19 affecting the production of veverimer drug substance and drug product. At this time, we have not experienced any material disruption in the distribution network for veverimer, including the provision of raw materials, the shipping of drug substance and drug product and the provision of clinical trial supplies to trial participants.
We have no products approved for marketing, and we have not generated any revenue from product sales or other arrangements. From our inception in 2013 through March 31, 2021, we have primarily funded our operations through the sale of $152.4 million of convertible preferred stock, net proceeds of $237.7 million from our initial public offering, or IPO, on July 2, 2018, net proceeds of $217.9 million from our underwritten public offering on April 8, 2019 and net proceeds of $193.3 million from the issuance of $200.0 million aggregate principal amount of 3.50% convertible senior notes due 2027, or Convertible Senior Notes, on May 22, 2020 and net borrowing of $72.1 million after fees of $2.9 million under the Loan and Security Agreement, or Term Loan, entered into with Hercules Capital Inc., or Hercules, on February 28, 2018. We have incurred losses in each year since our inception in 2013. Our net losses were $53.4 million and $74.1 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, we had an accumulated deficit of $687.2 million. Substantially all of our operating losses resulted from expenses incurred in connection with advancing veverimer through development activities and general and administrative costs associated with pre-commercialization activities and administrative functions. At this time, COVID-19 has not materially impacted our current financial resources or our outlook.
We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect our expenses will continue in connection with our ongoing activities as we:
conduct clinical studies of veverimer, including the ongoing VALOR-CKD trial;
continue to optimize the manufacturing processes and manufacture drug substance and drug product to support the ongoing VALOR-CKD trial and the commercial launch, if approved;
increase our research and development efforts;
create additional infrastructure to support our product development;
seek regulatory approval for veverimer, including any activities necessary for the resubmission of the NDA for veverimer;
maintain, expand and protect our intellectual property portfolio; and
maintain operational, financial and management information systems to support ongoing operations, including operating as a public company.
We do not expect to generate any revenue from product sales until we successfully complete development and obtain regulatory approval for veverimer. If we obtain regulatory approval for veverimer, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, we will seek to fund our operations through available cash from our prior equity offerings and the Convertible Senior Note issuance, and, as necessary, through additional public or private equity or debt financings or other sources. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and ability to develop veverimer.
Components of Our Results of Operations
Research and Development Expense

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Research and development expense consists primarily of costs associated with the development of veverimer and includes salaries, bonuses, benefits, travel and other related costs, including stock-based compensation expense, for personnel engaged in research and development functions; expenses incurred under agreements with CROs, investigative sites and consultants that conduct our nonclinical and clinical studies; manufacturing processes optimization and the cost of manufacturing drug substance for commercial and clinical use as well as drug product to support the ongoing VALOR-CKD trial; payments to consultants engaged in the development of veverimer, including stock-based compensation, travel and other expenses; costs related to compliance with quality and regulatory requirements; research and development facility-related expenses, which include direct and allocated expenses, and other related costs. Research and development expense is charged to operations as incurred when these expenditures relate to our research and development efforts and have no alternative future uses. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.
All of our research and development expense to date has been incurred in connection with veverimer. We expect our research and development expense to increase for the foreseeable future as we optimize our manufacturing processes and advance veverimer through clinical development, including our ongoing VALOR-CKD trial. The process of conducting clinical studies necessary to obtain regulatory approval is costly and time consuming and the successful development of veverimer is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when, and to what extent, we will generate revenue from commercialization and sale of veverimer, if approved. Therefore, we are unable to estimate with any certainty the costs we will incur in the continued development of veverimer. The degree of success, timelines and cost of development can differ materially from expectations. We may never succeed in achieving regulatory approval for veverimer.
General and Administrative Expense
General and administrative expense consists primarily of salaries, bonuses, benefits, travel, stock-based compensation expense and facility-related expenses for personnel in finance and administrative functions. General and administrative expense also includes professional fees for legal, patent, consulting, accounting and audit services, pre-commercial preparation, medical affairs costs and recruiting services for the potential launch of veverimer and other related costs.
Restructuring Costs
Expenses related to restructuring activities are recorded in operating expenses as part of research and development expense and general and administrative expense as appropriate.
On September 10, 2020, the Compensation Committee of the Board of Directors approved the Tricida, Inc. 2020 Reduction in Force Severance Benefit Plan, or 2020 Restructuring Plan. On September 18, 2020, we implemented a restructuring, or Third Quarter 2020 Restructuring, under the 2020 Restructuring Plan to streamline the organization and preserve capital that included the elimination of approximately 21.5% of our workforce and other cost reductions. We did not incur any restructuring costs related to the Third Quarter 2020 Restructuring during the three months ended March 31, 2021.
On October 25, 2020, our Board of Directors approved and on October 28, 2020, we implemented a restructuring under the 2020 Restructuring Plan, or Fourth Quarter 2020 Restructuring, to reduce operating costs and better align our workforce with the needs of our business following the completion of the Type A meeting with the FDA in October 2020. The Fourth Quarter 2020 Restructuring resulted in the elimination of approximately 60.0% of our workforce and included one-time termination severance payments and other employee-related costs, and exit costs including contract termination costs and accelerated depreciation of capitalized software. Restructuring costs of $0.2 million were recorded in operating expenses in our condensed statements of operations and comprehensive loss for the three months ended March 31, 2021.

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Results of Operations
The following table presents our results of operations for the three months ended March 31, 2021 and 2020.
 Three Months Ended
March 31,
Change
(in thousands)20212020$%
Operating expenses:
Research and development$32,175 $49,381 $(17,206)(35)%
General and administrative9,895 23,526 (13,631)(58)%
Total operating expenses42,070 72,907 (30,837)(42)%
Loss from operations(42,070)(72,907)30,837 (42)%
Other income (expense), net445 813 (368)(45)%
Interest expense(5,613)(2,020)(3,593)178 %
Loss on early extinguishment of Term Loan(6,124)— (6,124)N/M
Net loss$(53,362)$(74,114)$20,752 (28)%
N/M = Not meaningful
Research and Development Expense
The following table presents our research and development expense for the three months ended March 31, 2021 and 2020.
 Three Months Ended
March 31,
Change
(in thousands)20212020$%
Clinical development costs$25,675 $41,140 $(15,465)(38)%
Personnel and related costs3,173 3,932 (759)(19)%
Stock-based compensation expense2,406 3,133 (727)(23)%
Other research and development costs921 1,176 (255)(22)%
Total research and development expense$32,175 $49,381 $(17,206)(35)%
Comparison of the three months ended March 31, 2021 and 2020
Research and development expense was $32.2 million and $49.4 million for the three months ended March 31, 2021 and 2020, respectively. The decrease of $17.2 million was due to decreased activities in connection with our veverimer clinical development program, resulting in a decrease of clinical development costs of $15.5 million related to manufacturing process optimization and drug substance manufacturing costs related to our VALOR-CKD trial; decreased personnel and related costs of $0.8 million related to the reduction in workforce following the Third Quarter 2020 Restructuring and the Fourth Quarter 2020 Restructuring; decreased stock-based compensation expense of $0.7 million related to performance awards granted in August 2019 and our workforce reduction, partially offset by higher costs related to annual awards granted in February 2020 and January 2021; and a decrease in other research and development costs of $0.3 million primarily related to lower travel costs.
General and Administrative Expense
The following table presents our general and administrative expense for the three months ended March 31, 2021 and 2020.

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 Three Months Ended
March 31,
Change
(in thousands)20212020$%
Personnel and related costs$2,560 $6,246 $(3,686)(59)%
Stock-based compensation expense3,636 5,241 (1,605)(31)%
Other general and administrative costs3,699 12,039 (8,340)(69)%
Total general and administration expense$9,895 $23,526 $(13,631)(58)%
Comparison of the three months ended March 31, 2021 and 2020
General and administrative expense was $9.9 million and $23.5 million for the three months ended March 31, 2021 and 2020, respectively. The decrease of $13.6 million was due to a decrease in pre-commercialization and administrative activities in connection with our veverimer clinical development program, resulting in decreased personnel and related costs of $3.7 million due to the reduction in workforce following the Third Quarter 2020 Restructuring and the Fourth Quarter 2020 Restructuring; decreased stock-based compensation expense of $1.6 million related to our workforce reduction and performance awards granted in August 2019, partially offset by higher costs related to annual awards granted in February 2020 and January 2021; and a decrease in other general and administrative costs of $8.3 million primarily related to reduction in pre-commercialization activities, medical affairs activities, recruiting and training costs.
Liquidity and Capital Resources
Sources of Liquidity
From our inception in 2013 through March 31, 2021, we have primarily funded our operations through the sale of $152.4 million of convertible preferred stock, net proceeds of $237.7 million from our IPO on July 2, 2018, net proceeds of $217.9 million from our underwritten public offering of common stock on April 8, 2019, net proceeds of $193.3 million from the issuance of Convertible Senior Notes on May 22, 2020 and net borrowing of $72.1 million under the Term Loan. As of March 31, 2021, we had cash, cash equivalents and investments of $217.7 million.
Hercules Loan and Security Agreement
On March 12, 2021, we repaid the outstanding principal of $75.0 million and fees in the amount of $8.3 million to Hercules under the Term Loan. We recognized a loss on early debt extinguishment of $6.1 million which represents the remaining unamortized issuance costs.
Convertible Senior Notes
On May 22, 2020, we issued $200.0 million aggregate principal amount of Convertible Senior Notes pursuant to an indenture, dated as of May 22, 2020, or the Indenture, between us and U.S. Bank National Association, as trustee, or the Trustee. The offering and sale of the Convertible Senior Notes were made by us to the initial purchasers in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, or the Securities Act, for resale by the initial purchasers to qualified institutional buyers (as defined in the Securities Act) pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The issuance included the exercise in full by the initial purchasers of their option to purchase an additional $25.0 million aggregate principal amount of Convertible Senior Notes. Net proceeds from the offering were $193.3 million after deducting underwriting discounts and commissions and other offering costs of approximately $6.7 million.
Our Convertible Senior Notes are senior unsecured obligations, and interest is payable semi-annually in arrears at a rate of 3.5% per year on May 15 and November 15 of each year, beginning on November 15, 2020. The Convertible Senior Notes mature on May 15, 2027, unless earlier repurchased, redeemed or converted and are not redeemable prior to May 20, 2024. We may redeem for cash all or any portion of the Convertible Senior Notes, at our option, on or after May 20, 2024 and on or before the 40th scheduled trading day immediately prior to the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Senior Notes to be redeemed, plus

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accrued and unpaid interest to, but excluding, the redemption date. We are not required to and no sinking fund is provided for the Convertible Senior Notes.
The Convertible Senior Notes are convertible into cash, shares of our common stock or a combination of cash and shares of our common stock at our election at an initial conversion rate of 30.0978 shares of our common stock per $1,000 principal amount of the Convertible Senior Notes, which is equivalent to an initial conversion price of approximately $33.23 per share of our common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. It is our current intent to settle conversions through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock. As of March 31, 2021, the “if-converted value” did not exceed the remaining principal amount of the Convertible Senior Notes.
Funding Requirements
We have incurred losses and negative cash flows from operations since our inception in 2013 and anticipate that we will continue to incur net losses for the foreseeable future. As of March 31, 2021, we had an accumulated deficit of $687.2 million. Based on our cash, cash equivalents and investments as of March 31, 2021, we believe we have sufficient capital to continue funding our operations for the twelve-month period following the filing of this Quarterly Report on Form 10-Q. We expect to incur additional losses in the future to conduct research and development and to conduct pre-commercialization activities and recognize that we may need to raise additional capital to fully implement our business plan.
Such future capital requirements are difficult to forecast and will depend on many factors, including:
the progress, outcome and results of our ongoing VALOR-CKD trial;
the costs, timing and success of addressing the deficiencies identified by the FDA in the CRL and issues raised in the ADL related to our NDA for veverimer;
our ability to obtain approval of our NDA for veverimer from the FDA under either traditional approval or the Accelerated Approval Program, if at all;
the findings of the FDA during their routine inspections of our facility and the facilities of our contract manufacturers and clinical trial sites during the NDA review process and our ability to promptly and adequately address any such findings;
the revenue, if any, received from commercial sales of veverimer should we receive regulatory approval;
our ability to maintain and enforce our intellectual property rights and defend any intellectual property-related claims;
the costs, timing and success of the scale-up and optimization of the process of manufacturing veverimer, and our minimum and maximum commitments under the Manufacturing and Commercial Supply Agreement and Amendment No. 1 to the Manufacturing and Commercial Supply Agreement we entered into with Patheon, as the same may be amended from time to time;
the costs, timing and success of future commercialization activities, including product manufacturing, marketing, sales and distribution, for veverimer if we receive regulatory approval and do not partner for commercialization;
the cost of fulfilling our minimum contractual obligations to our suppliers and vendors; and
the extent to which we acquire or in-license other products and technologies.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic partnerships and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. If we raise additional funds through collaborations, strategic partnerships or licensing arrangements with third parties, we may have to

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relinquish valuable rights to veverimer, associated intellectual property, our other technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
However, there can be no assurance that we will be successful in securing additional funding at levels sufficient to fund our operations or on terms acceptable to us. If we are unsuccessful in our efforts to raise additional financing, we could be required to significantly reduce operating expenses and delay, reduce the scope of or eliminate some of our development programs or our future commercialization efforts, out-license intellectual property rights to our investigational drug candidates and sell unsecured assets, cease operations altogether or a combination of the above, any of which may have a material adverse effect on our business, results of operations, financial condition and/or our ability to fund our scheduled obligations on a timely basis or at all.
On July 2, 2018, we completed our IPO and issued and sold an aggregate of 13,455,000 shares of common stock, including the underwriters’ exercise in full of their over-allotment option, a public offering price of $19.00 per share. Net proceeds were approximately $237.7 million, after deducting underwriting discounts and commissions.
On April 8, 2019, we consummated an underwritten public offering and issued 6,440,000 shares of common stock, which included the exercise in full by the underwriters of their option to purchase 840,000 additional shares of common stock at an offering price of $36.00 per share for net proceeds of approximately $217.9 million, after deducting underwriting discounts and commissions of $13.9 million.
On May 22, 2020, we issued $200.0 million aggregate principal amount of Convertible Senior Notes due 2027. The issuance included the exercise in full by the initial purchasers of their option to purchase an additional $25.0 million aggregate principal amount of Convertible Senior Notes. Net proceeds from the offering were $193.3 million after deducting underwriting discounts and commissions and other offering costs of approximately $6.7 million.
Cash Flows
The following table presents a summary of the net cash flow activity for the three months ended March 31, 2021 and 2020.
Three Months Ended
March 31,
(in thousands)20212020
Net cash provided by (used in):
Operating activities$(30,978)$(51,034)
Investing activities16,816 42,462 
Financing activities(83,185)553 
Net increase (decrease) in cash and cash equivalents$(97,347)$(8,019)
Cash Used in Operating Activities
During the three months ended March 31, 2021, cash used in operating activities was $31.0 million, which consisted of a net loss of $53.4 million, adjusted by non-cash charges of $15.2 million and changes in cash used in our operating assets and liabilities of $7.2 million. The non-cash charges consisted primarily of loss on early extinguishment of Term Loan of $6.1 million, stock-based compensation of $6.0 million, accretion of Term Loan and Convertible Senior Notes of $2.6 million, non-cash operating lease costs of $0.2 million, net amortization of premiums and discounts on investments of $0.2 million and depreciation and amortization of $0.1 million, partially offset by changes in fair value of compound derivative liability of $0.2 million. The changes in cash used in our operating assets and liabilities were primarily due to an increase in accrued expenses and other current liabilities of $3.9 million, an increase in accounts payable of $1.8 million and a decrease in prepaid expenses and other assets of $1.5 million.
During the three months ended March 31, 2020, cash used in operating activities was $51.0 million, which consisted of a net loss of $74.1 million, adjusted by changes in cash used in our operating assets and liabilities of $12.9 million and non-cash charges of $10.2 million. The changes in cash used in our operating assets and liabilities were primarily due to an increase in accrued expenses and other current liabilities of $8.9 million and an increase in accounts payable of $4.9 million, partially offset by an increase in prepaid expenses and other assets of $0.8 million and a decrease in operating lease liabilities of $0.1 million. The non-cash charges consisted primarily of stock-based compensation of $8.4 million, changes in fair value of compound derivative liability of $0.8 million,

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accretion of Term Loan of $0.8 million, non-cash operating lease costs of $0.3 million and depreciation and amortization of $0.2 million, partially offset by net amortization of premiums and discounts on investments of $0.3 million.
Cash Provided by Investing Activities
Net cash provided by investing activities was $16.8 million and $42.5 million for the three months ended March 31, 2021 and 2020, respectively. The net cash provided by investing activities during the three months ended March 31, 2021 was due to maturities of investments of $76.8 million, partially offset by purchases of investments of $59.9 million and purchases of property and equipment of $0.1 million. The net cash provided by investing activities during the three months ended March 31, 2020 was due to maturities of investments of $88.9 million, partially offset by purchases of investments of $46.0 million and purchases of property and equipment of $0.4 million.
Cash Provided by (Used in) Financing Activities
Net cash used in financing activities was $83.2 million for the three months ended March 31, 2021 and net cash provided by financing activities was $0.6 million for the three months ended March 31, 2020. The net cash used in financing activities during the three months ended March 31, 2021 was primarily due to cash paid for early extinguishment of Term Loan of $83.3 million, partially offset by proceeds from the issuance of common stock under equity award plans of $0.1 million. The net cash provided by financing activities during the three months ended March 31, 2020 was due to proceeds from the issuance of common stock under equity incentive plans of $0.6 million.
Off-Balance Sheet Arrangements
During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules of the Securities and Exchange Commission.
Contractual Obligations and Commitments
For additional details regarding our contractual obligations, see Note 5. “Commitments and Contingencies” to our condensed financial statements in Part I, Item 1. of this Quarterly Report on Form 10-Q.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ significantly from these estimates under different assumptions or conditions. There have been no material changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our market risk during the three months ended March 31, 2021, compared to the year ended December 31, 2020. For quantitative and qualitative disclosures about market risk, refer to Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures

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The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
The Company’s management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d–15(e) of the Exchange Act, as of March 31, 2021. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2021.
Changes in Internal Control over Financial Reporting
There have been no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitation on the Effectiveness of Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control systems are met.


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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a discussion of legal proceedings, please read the information under the heading “Contingencies” in Part I, Item 1., Note 5. "Commitments and Contingencies", to our condensed financial statements included in this report, which is incorporated into this item by reference.
ITEM 1A. RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained elsewhere in this Quarterly Report on Form 10-Q, including Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part I, Item 1. "Financial Statements," as well as our other filings with the Securities and Exchange Commission, or SEC, before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.
Summary of Risk Factors
Investing in our securities involves a high degree of risk. You should carefully consider all of the risks discussed in Part II, Item 1A. "Risk Factors" of this Quarterly Report on Form 10-Q, not just those discussed under this “Summary of Risk Factors” before making a decision to invest in our securities. The following is a list of some of these risks:
We have a limited operating history, have incurred significant losses in each year since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have only one investigational drug candidate, veverimer (also known as TRC101), which is still in clinical trials and has no commercial sales.
We are dependent on the success of veverimer and, if we are unable to successfully develop, obtain regulatory approval for and commercialize veverimer, or continue to experience significant delays in doing so, our business will be materially harmed. Based on the Complete Response Letter, or CRL, received from the FDA in August 2020, and the Appeal Denied Letter, or ADL, received in February 2021, we believe the criteria and pathway for resubmission and approval of our New Drug Application, or NDA, for veverimer is more clear, but the timing of any such approval is uncertain. The regulatory approval process is highly uncertain, and we may not obtain approval through the Accelerated Approval Program or the traditional approval process, as required for the commercialization of veverimer. We could be required to conduct additional nonclinical and clinical studies and trials beyond those that we currently contemplate, which would increase the expense of obtaining, reduce the likelihood of obtaining and/or delay the timing of obtaining, marketing approval for veverimer.
The design of our ongoing renal outcomes trial, VALOR-CKD (also known as TRCA-303), may be impacted by additional information that becomes available to us or by clinical data generated while the VALOR-CKD trial is ongoing, including data that may affect key assumptions regarding sample size, endpoints, duration or the underlying standard of care, in which case we may be required to modify the design of this trial or conduct additional clinical trials. Additionally, if the trial is stopped early, for example, for efficacy or for administrative reasons, the data may or may not be sufficient to support a resubmission and/or approval of the NDA.
A continued delay in obtaining approval could further delay commercialization of veverimer and adversely impact our ability to generate revenue, our business and our results of operations. The denial of regulatory approval for veverimer could mean that we need to cease operations altogether. Even if we are able to obtain approval of veverimer through the Accelerated Approval Program, if our renal outcomes trial, VALOR-CKD, which would serve as a confirmatory postmarketing trial, does not verify clinical benefit, or if we are subject to and do not comply with rigorous postmarketing requirements, the FDA may seek to withdraw the approval.

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Together with our limited operating history and our requirements for substantial additional financing to achieve our goals, including the completion of our ongoing clinical trial, VALOR-CKD, it is difficult to assess our future viability. We require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our clinical trials, product development, commercialization efforts of veverimer, or further reduce or cease our operations altogether. Our current debt obligations expose us to risks that could adversely affect our business, operating results, overall financial condition and may result in further dilution to our stockholders.
The incidence and prevalence of the target patient population for veverimer are based on estimates and third-party sources. If the market opportunity for veverimer is smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability might be materially and adversely affected.
We do not have commercial capabilities that would be required for a successful commercial launch of veverimer, if approved. Development of such capabilities would require significant financial investment as well as recruitment of key personnel. An inability to develop such commercial capabilities or a delay, could meaningfully impact our business.
Our business operations are heavily dependent on third parties to perform functions critical to our success. We currently rely completely on third-party suppliers to manufacture, package and label our clinical drug supply of veverimer drug substance and drug product, and we intend to rely completely on third parties to manufacture, package and label commercial supply of veverimer drug substance and drug product, if approved. Any interruption or performance failure on the part of our suppliers could delay the development and potential regulatory approval and commercialization of veverimer. In addition, we have relied and continue to rely on third parties, particularly consultants and CROs, to conduct and complete our clinical trials, including our ongoing clinical trial, VALOR-CKD. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may be unable to obtain regulatory approval for or commercialize veverimer, if approved.
An epidemic or pandemic disease outbreak, including the COVID-19 outbreak, could disrupt our business operations, including the conduct and results of our ongoing clinical trial, VALOR-CKD, as well as the business or operations of our third-party manufacturers and testing laboratories, our CROs, clinical data management organizations, medical institutions and clinical investigators, the FDA or other regulatory authorities, or other third parties with whom we conduct business, which could have a material adverse effect on our business, results of operations, financial condition and prospects.
If we fail to attract and keep senior management and other key personnel, we may be unable to successfully develop veverimer, conduct our clinical trials and commercialize veverimer, if approved.
Our stock price may be volatile and fluctuate substantially and you may not be able to resell shares of our common stock at or above the price you paid.
Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements
We have a limited operating history, have incurred significant losses in each year since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have only one investigational drug candidate, veverimer (also known as TRC101), which is still in clinical trials and has no commercial sales. We received a Complete Response Letter, or CRL, from the FDA related to our New Drug Application, or NDA, for veverimer. Further, the Office of New Drugs, or OND, issued an Appeal Denied Letter, or ADL, to our Formal Dispute Resolution Request, or FDRR. Together with our limited operating history, these factors make it difficult to assess our future viability.
We are a pharmaceutical company focused on the development and commercialization of our investigational drug candidate, veverimer (also known as TRC101), a non-absorbed, orally-administered polymer designed to treat metabolic acidosis in patients with chronic kidney disease, or CKD. We have only a limited operating history upon which you can evaluate our business and prospects. Our net losses were $53.4 million and $74.1 million for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, we had an accumulated deficit of $687.2 million. Pharmaceutical product development is a highly speculative undertaking, entails substantial upfront capital expenditures and involves a substantial degree of risk, including the risk that a potential drug

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candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable. We have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical industry. To date, we have focused principally on developing our investigational drug candidate, veverimer. We have no products approved for commercial sale and have not generated any revenue from product sales or other arrangements to date and neither will we for the foreseeable future. We continue to incur significant research and development and other expenses related to our ongoing operations. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue our development of, and seek regulatory approval for, veverimer, prepare for potential commercialization of veverimer and continue to operate as a public company and comply with legal, accounting and other regulatory requirements.
If veverimer is not successfully developed or commercialized, including because we are unable to address the deficiencies identified in the CRL from the FDA related to our NDA or the issues raised in the ADL issued by the OND to our FDRR, because of a lack of capital or otherwise, or if we do not generate enough revenue following marketing approval, we will not achieve profitability and our business may fail. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
Further, the net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.
We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our clinical trials, product development, other operations or commercialization efforts of veverimer, or to cease operations altogether.
We are currently advancing veverimer through clinical development. As of March 31, 2021, we had working capital of $180.5 million and cash, cash equivalents and investments of $217.7 million. We believe that we will continue to expend substantial resources for the foreseeable future as we continue clinical development, seek regulatory approval, and prepare for the commercialization of veverimer and develop any other drug candidates we may choose to pursue in the future. These expenditures will include costs associated with research and development, sales and marketing, conducting nonclinical and clinical studies and trials, obtaining regulatory approvals, and manufacturing and supply. In addition, other unanticipated costs may arise, including in connection with attempting to address the deficiencies identified in the CRL from the FDA related to our NDA or the issues raised in the ADL issued by the OND on our FDRR and resubmission of the NDA. Because the outcome of any clinical trial and the regulatory approval process is highly uncertain, we cannot reasonably estimate the actual expenditures necessary to successfully complete the development, regulatory approval process and commercialization of veverimer.
We believe that our existing cash, cash equivalents and investments of $217.7 million will allow us to fund our operating plan through at least the next 12 months. However, we have based these estimates on assumptions that may prove to be wrong, and we could spend our available capital resources much faster than we currently expect or require more capital to fund our operations than we currently expect. Moreover, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations. Such financing may result in dilution to stockholders, imposition of debt covenants and repayment obligations, or other restrictions that may affect our business. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
The amount and timing of our future funding requirements will depend on many factors, including, but not limited to:
the time and cost necessary to obtain regulatory approvals for veverimer and any future drug candidates that we develop, in-license or acquire;

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our ability to obtain approval for veverimer through the Accelerated Approval Program or traditional approval process;
the costs associated with addressing the deficiencies identified in the CRL from the FDA related to our NDA or the issues raised in the ADL issued by the OND on our FDRR and resubmission of our NDA, and any increased costs associated with raising capital in light of such deficiencies or resulting delays;
the progress, timing, scope and costs of conducting our nonclinical and clinical studies and trials, including our ongoing VALOR-CKD trial, in a timely manner, or potential future nonclinical and/or clinical studies and trials we may be required to conduct;
the costs associated with conducting additional clinical trials for veverimer, if any, that the FDA and/or foreign regulatory agencies may require us to conduct prior to approval to market veverimer;
the costs of postmarketing studies or clinical trials for veverimer that could be required by regulatory agencies or that we might otherwise choose to conduct;
the costs of obtaining commercial supplies of veverimer;
our ability to successfully commercialize veverimer;
the manufacturing, selling and marketing costs associated with veverimer, including the cost and timing of establishing our sales and marketing and medical affairs capabilities;
the cost of fulfilling our minimum contractual obligations to our suppliers and vendors;
the timing and costs related to the optimization and scale-up of our manufacturing processes for veverimer and commercial supply of veverimer;
the amount and timing of sales, royalties and other revenue from veverimer, if approved, including the sales price and the availability of adequate third-party reimbursement;
the costs of operating as a public company;
the costs associated with any product recall that could occur;
the emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing products or treatments;
the cash requirements of any future acquisitions or discovery of future drug candidates, if any;
the costs of hiring and retaining personnel;
the time and cost necessary to respond to technological and market developments;
the potential impact of pandemics, including COVID-19, on the health care system, financial markets and economy generally and on our business in particular, including the potential impact on enrollment and retention of patients in the VALOR-CKD trial, subject compliance with the study protocol, or the power of our VALOR-CKD trial;
the costs of preparing, filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, including litigation costs and the outcome of such litigation; and
the costs of defending against claims brought against the Company, its management and/or its Board of Directors, including litigation costs associated with shareholder, class action and derivative suits.
We cannot assure you that anticipated additional financing will be available to us on favorable terms, or at all. Any future debt financing into which we enter may impose upon us covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, redeem our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Although we have been successful in obtaining financing through the issuance of our equity securities and debt financing, we cannot assure you that we will be able to do so in the future. If we are unable to raise additional capital to fund our clinical development of

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veverimer, and commercialization, if approved, and other business activities, we could be forced to significantly delay, scale back or abandon one or more clinical development programs or commercialization efforts and curtail or cease our operations. In addition, our ability to achieve profitability or to respond to competitive pressures would be significantly limited.
Risks Related to Our Business
We are dependent on the success of veverimer, our only investigational drug candidate. If we are unable to successfully develop, obtain regulatory approval for and commercialize veverimer, or continue to experience significant delays in doing so, our business will be materially harmed.
To date, we have invested all of our efforts and financial resources in the research and development and potential commercial launch of veverimer, which is our only investigational drug candidate. Our business and future success depends on our ability to successfully develop, obtain regulatory approval for, and commercialize veverimer. We are currently conducting a renal outcomes clinical trial, VALOR-CKD (also known as TRCA-303), to determine if veverimer slows CKD progression in patients with metabolic acidosis associated with CKD. Our VALOR-CKD trial is a randomized, double-blind, placebo-controlled, time-to-event trial. In May 2018, we completed our multicenter, randomized, double-blind, placebo-controlled Phase 3 clinical trial for veverimer, known as TRCA-301. The TRCA-301 trial enrolled 217 subjects with metabolic acidosis and CKD. Eligible subjects who completed the 12-week treatment period in our Phase 3 trial were invited to continue in our 40-week extension trial, TRCA-301E, and we completed the TRCA-301E trial in March 2019. While these trials met their primary and secondary endpoints, the FDA has indicated that these trials alone are not sufficient to support approval of veverimer. Further, we cannot assure your that any foreign regulatory agency will approve veverimer for marketing.
We submitted our New Drug Application, or NDA, for veverimer through the Accelerated Approval Program in August 2019, and in August 2020, we received a Complete Response Letter, or CRL, from the FDA related to our NDA for veverimer. According to the CRL, the FDA is seeking additional data beyond the TRCA-301/TRCA-301E trial regarding the magnitude and durability of the treatment effect of veverimer on the surrogate marker of serum bicarbonate and expressed concern regarding whether the demonstrated effect size would be reasonably likely to predict clinical benefit. In addition, the CRL questioned the applicability of the treatment effect to the U.S. population and the practice of medicine in the United States. The FDA also expressed concern as to the reliability of the findings given that the findings for the TRCA-301/TRCA-301E trial were driven by a single, high-enrolling trial site located in Eastern Europe. The CRL did not raise any concerns related to FDA’s completed inspection of the highest enrolling clinical trial site in the TRCA-301/TRCA-301E trial and there was no FDA Form 483 issued. There were no safety, clinical pharmacology/biopharmaceutics, CMC, or non-clinical issues identified in the CRL. The CRL provided multiple options for resolving the identified deficiencies, including submission of the data from at least one additional adequate and well-controlled trial demonstrating the efficacy of veverimer for the treatment of metabolic acidosis associated with CKD.
We held an End-of-Review Type A meeting, or Type A meeting, with the FDA's Division of Cardiology and Nephrology, or the Division, in October 2020. The Division agreed, in principle, that an interim analysis of serum bicarbonate data from the VALOR-CKD trial proposed by Tricida could address the Division's concerns regarding the reliability of the TRCA-301/TRCA-301E trial data and the relevance of those trial findings to the U.S. population provided certain conditions were met. Based on other feedback from the FDA during the Type A meeting, we believed the Division would also require evidence of veverimer's effect on CKD progression from a near-term interim analysis of the VALOR-CKD trial for accelerated approval and that the FDA would be unlikely to rely solely on serum bicarbonate data for determination of efficacy. Accordingly, we submitted a Formal Dispute Resolution Request, or FDRR, solely requesting that the Office of New Drugs, or OND, find that the magnitude of serum bicarbonate change seen in the TRCA-301/TRCA-301E trial is reasonably likely to predict clinical benefit in the treatment of metabolic acidosis associated with CKD and that it can therefore serve as the basis for accelerated approval.
In February 2021, the OND issued a decision on our FDRR. While the OND acknowledged that the TRCA-301 and TRCA-301E trials met their serum bicarbonate endpoints with statistical significance, the OND denied the appeal. In its Appeal Denied Letter, or ADL, the OND not only addressed the issue of magnitude of serum bicarbonate change, but cited all of the deficiencies in the CRL in concluding that the data provided in support of the veverimer NDA did not support approval through the Accelerated Approval Program. The OND concluded that the magnitude of the increases in serum bicarbonate levels shown in the TRCA-301/TRCA-301E trial was not of sufficient size or duration to establish that treatment with veverimer would be reasonably likely to provide a discernible reduction in CKD progression. In addition, the OND found that the intended confirmatory trial, VALOR-

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CKD (also known as TRCA-303), was underpowered to detect a 13% reduction in slowing of CKD progression. This finding was based on information included in the initial NDA submission, including the placebo-subtracted LS mean change from baseline in serum bicarbonate observed in the TRCA-301/TRCA-301E trial and the original Predictive MA Model. The OND also raised concerns regarding the robustness of the study results given that the veverimer NDA was supported by a single registrational trial (TRCA-301/TRCA-301E), which must, alone, provide persuasive evidence of benefit. Specifically, the OND noted concerns around adequate blinding, the trial results being strongly influenced by a single site, and the majority of sites for the TRCA-301/TRCA-301E trial being in Eastern Europe, where differences in patient management, including concomitant medications and diet, might affect the treatment response to veverimer and raise a concern of the applicability to a U.S. patient population. The OND also stated that, while trial results in the TRCA-301/TRCA-301E trial showed improvement in two patient-reported measures, the KDQOL Physical Functioning Survey and the Repeated Chair Stand Test, the OND viewed this subjective data from a single trial with skepticism in the absence of data from a second trial with similar results and noted that both endpoints would require rigorous blinding to support robust conclusions. However, the OND noted that both of these changes, if eventually established by one or more additional trials, would indicate a potentially meaningful benefit of veverimer treatment—especially in CKD patients who have physical functional impairments. Separate from the ADL, we previously received feedback from the Division of Clinical Outcome Assessment, or DCOA, that reliance on these physical function endpoints for approval may require further validation.
Based on the ADL, we believe that we now have greater clarity on the potential path for approval of veverimer through the Accelerated Approval Program. The OND suggested that we meet with the Division to discuss submission of Week 52 serum bicarbonate results from the full randomized trial population of VALOR-CKD and that the trial should include a substantial portion of patients from the United States or from regions with “U.S.-like” patients. If the results of this trial were to demonstrate that veverimer provides a meaningfully larger treatment effect than seen in the TRCA-301/TRCA-301E trial, then this trial, along with the results from the TRCA-301/TRCA-301E trial, could address the concerns raised in the CRL regarding the limitations and the size of the treatment response observed in the TRCA-301/TRCA-301E trial. However, whether the extent of increase in serum bicarbonate in any subsequent submission based on VALOR-CKD would support accelerated approval will remain a review issue, and will, in part, reflect the Division’s assessment of the adequacy (i.e., power) of VALOR-CKD to detect the anticipated treatment effect of CKD progression in a reasonable timeframe.
Although the ADL provides greater clarity on the potential path for approval of veverimer through the Accelerated Approval Program, we believe the timeline to meet the requirements for accelerated approval as suggested in the ADL may not result in the most rapid development path for veverimer. For example, if either of the planned interim analyses in VALOR-CKD for early stopping for efficacy results in positive renal outcomes data, this data could be available before the week 52 serum bicarbonate data from the fully enrolled VALOR-CKD trial suggested in the ADL and could serve as the basis for resubmission of the NDA. If the VALOR-CKD trial is stopped early for efficacy based on analysis of the primary endpoint (i.e., DD40) at either of the two planned interim analyses, additional data on the effect of veverimer on (1) CKD progression; (2) physical functioning; and (3) serum bicarbonate will become available. If we are unable to ensure that we have adequate resources to complete the trial in accordance with the protocol, we may explore the possibility of stopping the trial early for administrative reasons, in which case the analysis of the primary endpoint would use all alpha remaining at that time and the data may or may not be sufficient to support a resubmission and/or approval of the NDA. An administrative stop is not certain, and the timing would be independent of the planned interim analyses. In any event, we believe data from VALOR-CKD will be very important in furthering our understanding of the regulatory path for approval of veverimer. As such, we intend to continue the execution of the VALOR-CKD trial with consideration of both the accelerated and traditional approval pathways. Resubmission and approval of the veverimer NDA may require additional clinical data beyond that provided by the VALOR-CKD trial, including an additional trial or trials to confirm magnitude, durability of effect or applicability to the U.S. population.
Even if we obtain regulatory approval for veverimer, we will need to develop a commercial organization, or collaborate with a third party for the commercialization of veverimer, establish commercially viable pricing and obtain approval for coverage and adequate reimbursement from third parties, including government payers. If we are unable to successfully commercialize veverimer, we may not be able to generate sufficient revenue to continue our business.
Our near-term prospects, including our ability to finance our operations and generate revenue, will depend heavily on the successful development, regulatory approval and commercialization of veverimer in the United States. Though we plan to engage in marketing approval discussions with foreign regulatory agencies in the future, we have not yet begun marketing approval discussions with any regulatory agency other than the FDA, and we are

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not currently seeking regulatory approval for veverimer outside the United States. The clinical and commercial success of veverimer will depend on a number of factors, including the following:
our ability to demonstrate veverimer’s safety and efficacy to the satisfaction of the FDA and/or foreign regulatory agencies;
the timely reporting of our ongoing VALOR-CKD trial;
our ability to conduct a successful VALOR-CKD trial and the ability of the results of this trial to demonstrate slowing of CKD progression by veverimer compared to placebo if we seek traditional approval of veverimer or confirm the clinical benefit of increasing serum bicarbonate if we obtain accelerated approval of veverimer;
the enrollment and continued participation in our VALOR-CKD trial by a sufficient number of subjects to demonstrate applicability to the U.S. population;
the enrollment and continued participation in our VALOR-CKD trial by a sufficient number of subjects over a sufficient number of clinical sites to avoid the potential for trial results to be driven by a single high-enrolling site;
the VALOR-CKD trial demonstrating statistically significant primary endpoint results so that hierarchical testing of the secondary efficacy endpoints, such as physical functioning endpoints, may be performed per the statistical analysis plan;
whether we are required by the FDA and/or foreign regulatory agencies to conduct additional clinical trials prior to or after approval to market veverimer, in addition to our VALOR-CKD trial;
the prevalence and severity of adverse side effects of veverimer in our ongoing and future clinical trials and commercial use, if approved;
the timely receipt of necessary regulatory and marketing approvals from the FDA and/or foreign regulatory agencies for veverimer;
our ability to obtain U.S. marketing approval for veverimer through the Accelerated Approval Program or traditional approval process, including our ability to address any deficiencies identified by the FDA in the CRL or issues identified in the ADL issued by the OND on our FDRR;
our ability to successfully commercialize veverimer, if approved for marketing and sale by the FDA and/or foreign regulatory agencies;
our ability to manufacture clinical trial and commercial quantities of veverimer drug substance and drug product and to develop and maintain commercially viable and validated manufacturing processes that are compliant with current good manufacturing practices, or cGMP, at a scale sufficient to meet anticipated demand and over time enable us to reduce our cost of manufacturing;
achieving and maintaining compliance with all regulatory requirements applicable to veverimer;
our success in educating physicians and patients about the potential benefits, risks, administration and use of veverimer;
acceptance of veverimer as safe and effective by patients and the medical community;
the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments;
our ability to obtain and sustain an adequate level of reimbursement for veverimer by third-party payers;
the effectiveness of our own or any future strategic collaborators’ marketing, sales and distribution strategy and operations;
our ability to continue to obtain protection for and to enforce our intellectual property rights in and to veverimer;

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the impact of pandemics, such as COVID-19, on our business in particular, including the potential impact on our VALOR-CKD trial; and
our ability to avoid and defend against third-party patent interference or patent infringement claims or similar proceedings with respect to our patent rights and patent infringement claims.
Many of these factors are beyond our control. Accordingly, we cannot assure you that we will ever be able to generate revenue through the sale of veverimer. If we are not successful in gaining approval of or in commercializing veverimer, or are significantly delayed in doing so, our business will be materially harmed.
If we are unable to obtain approval of veverimer through the Accelerated Approval Program in the United States, and/or are required to conduct additional nonclinical and clinical studies and trials beyond those that we have completed or currently contemplate, that could increase the expense of obtaining, reduce the likelihood of obtaining and/or delay the timing of obtaining, necessary marketing approval. Even if we receive approval from the FDA through the Accelerated Approval Program, if the ongoing VALOR-CKD trial, which would serve as a confirmatory postmarketing trial, or any additional confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous postmarketing requirements, the FDA may seek to withdraw the approval.
As described in the “Government Regulation” section, the Accelerated Approval Program is one of several approaches used by the FDA to make prescription drugs more rapidly available for the treatment of serious or life-threatening diseases. The FDA may grant accelerated approval to a product for a serious or life-threatening condition that provides a meaningful advantage over available therapies upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, which, is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. Approval through the Accelerated Approval Program is subject, however, to the requirement that the applicant conduct at least one additional confirmatory postmarketing clinical trial to verify and describe the drug’s clinical benefit, where there is uncertainty as to the relationship of the surrogate endpoint to the clinical benefit, or of the observed clinical endpoint to ultimate outcome. Typically, clinical benefit is verified when a postmarketing clinical trial shows that the drug provides a clinically meaningful positive therapeutic effect, that is, an effect on how a patient feels, functions, or survives. If such confirmatory postmarketing trial fails to confirm the drug’s clinical profile or risks and benefits, the FDA may withdraw its approval of the drug.
The FDA has broad discretion with regard to approval through the Accelerated Approval Program, and even if we believe that the Accelerated Approval Program is appropriate for veverimer, we cannot assure you that the FDA will ultimately agree. Furthermore, even if we do obtain approval through the Accelerated Approval Program, we may not experience a faster development process, review or approval compared to the traditional approval process.
Our NDA for veverimer was reviewed by the FDA through the Accelerated Approval Program based on the results of our Phase 1/2 trial, TRCA-101, our Phase 3 clinical trial, TRCA-301, and our 40-week extension trial, TRCA-301E. Thus far, we have been unable to obtain approval of veverimer through the Accelerated Approval Program. In August 2020, we received a CRL from the FDA related to our NDA for veverimer. According to the CRL, the FDA is seeking additional data beyond the TRCA-301/TRCA-301E trial regarding the magnitude and durability of the treatment effect of veverimer on the surrogate marker of serum bicarbonate and expressed concern regarding whether the demonstrated effect size would be reasonably likely to predict clinical benefit. In addition, the CRL questioned the applicability of the treatment effect to the U.S. population and the practice of medicine in the United States. The FDA also expressed concern as to the reliability of the findings given that the findings for the TRCA-301/TRCA-301E trial were driven by a single, high-enrolling trial site located in Eastern Europe. The CRL did not raise any concerns related to FDA’s completed inspection of the highest enrolling clinical trial site in the TRCA-301/TRCA-301E trial and there was no FDA Form 483 issued. There were no safety, clinical pharmacology/biopharmaceutics, CMC, or non-clinical issues identified in the CRL. The CRL provided multiple options for resolving the identified deficiencies, including submission of the data from at least one additional adequate and well-controlled trial demonstrating the efficacy of veverimer for the treatment of metabolic acidosis associated with CKD.
We held an End-of-Review Type A meeting, or Type A meeting, with the FDA's Division of Cardiology and Nephrology, or the Division, in October 2020. The Division agreed, in principle, that an interim analysis of serum bicarbonate data from the VALOR-CKD trial proposed by Tricida could address the Division's concerns regarding the reliability of the TRCA-301/TRCA-301E trial data and the relevance of those trial findings to the U.S. population provided certain conditions were met. Based on other feedback from the FDA during the Type A meeting, we believed the Division would also require evidence of veverimer's effect on CKD progression from a near-term

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interim analysis of the VALOR-CKD trial for accelerated approval and that the FDA would be unlikely to rely solely on serum bicarbonate data for determination of efficacy. Accordingly, we submitted a Formal Dispute Resolution Request, or FDRR, solely requesting that the Office of New Drugs, or OND, find that the magnitude of serum bicarbonate change seen in the TRCA-301/TRCA-301E trial is reasonably likely to predict clinical benefit in the treatment of metabolic acidosis associated with CKD and that it can therefore serve as the basis for accelerated approval.
In February 2021, the OND issued a decision on our FDRR. While the OND acknowledged that the TRCA-301 and TRCA-301E trials met their serum bicarbonate endpoints with statistical significance, the OND denied the appeal. In its Appeal Denied Letter, or ADL, the OND not only addressed the issue of magnitude of serum bicarbonate change, but cited all of the deficiencies in the CRL in concluding that the data provided in support of the veverimer NDA did not support approval through the Accelerated Approval Program. The OND concluded that the magnitude of the increases in serum bicarbonate levels shown in the TRCA-301/TRCA-301E trial was not of sufficient size or duration to establish that treatment with veverimer would be reasonably likely to provide a discernible reduction in CKD progression. In addition, the OND found that the intended confirmatory trial, VALOR-CKD (also known as TRCA-303), was underpowered to detect a 13% reduction in slowing of CKD progression. This finding was based on information included in the initial NDA submission, including the placebo-subtracted LS mean change from baseline in serum bicarbonate observed in the TRCA-301/TRCA-301E trial and the original Predictive MA Model. The OND also raised concerns regarding the robustness of the study results given that the veverimer NDA was supported by a single registrational trial (TRCA-301/TRCA-301E), which must, alone, provide persuasive evidence of benefit. Specifically, the OND noted concerns around adequate blinding, the trial results being strongly influenced by a single site, and the majority of sites for the TRCA-301/TRCA-301E trial being in Eastern Europe, where differences in patient management, including concomitant medications and diet, might affect the treatment response to veverimer and raise a concern of the applicability to a U.S. patient population. The OND also stated that, while trial results in the TRCA-301/TRCA-301E trial showed improvement in two patient-reported measures, the KDQOL Physical Functioning Survey and the Repeated Chair Stand Test, the OND viewed this subjective data from a single trial with skepticism in the absence of data from a second trial with similar results, and noted that both endpoints would require rigorous blinding to support robust conclusions. However, the OND noted that both of these changes, if eventually established by one or more additional trials, would indicate a potentially meaningful benefit of veverimer treatment—especially in CKD patients who have physical functional impairments. Separate from the ADL, we previously received feedback from the Division of Clinical Outcome Assessment, or DCOA, that reliance on these physical function endpoints for approval may require further validation.
Based on the ADL, we believe that we now have greater clarity on the potential path for approval of veverimer through the Accelerated Approval Program. The OND suggested that we meet with the Division to discuss submission of Week 52 serum bicarbonate results from the full randomized trial population of VALOR-CKD and that the trial should include a substantial portion of patients from the United States or from regions with “U.S.-like” patients. If the results of this trial were to demonstrate that veverimer provides a meaningfully larger treatment effect than seen in the TRCA-301/TRCA-301E trial, then this trial, along with the results from the TRCA-301/TRCA-301E trial, could address the concerns raised in the CRL regarding the limitations and the size of the treatment response observed in the TRCA-301/TRCA-301E trial. However, whether the extent of increase in serum bicarbonate in any subsequent submission based on VALOR-CKD would support accelerated approval will remain a review issue, and will, in part, reflect the Division’s assessment of the adequacy (i.e., power) of VALOR-CKD to detect the anticipated treatment effect of CKD progression in a reasonable timeframe.
Although the ADL provides greater clarity on the potential path for approval of veverimer through the Accelerated Approval Program, we believe the timeline to meet the requirements for accelerated approval as suggested in the ADL may not result in the most rapid development path for veverimer. For example, if either of the planned interim analyses in VALOR-CKD for early stopping for efficacy results in positive renal outcomes data, this data could be available before the week 52 serum bicarbonate data from the fully enrolled VALOR-CKD trial suggested in the ADL and could serve as the basis for resubmission of the NDA. If the VALOR-CKD trial is stopped early for efficacy based on analysis of the primary endpoint (i.e., DD40) at either of the two planned interim analyses, additional data on the effect of veverimer on (1) CKD progression; (2) physical functioning; and (3) serum bicarbonate will become available. If we are unable to ensure that we have adequate resources to complete the trial in accordance with the protocol, we may explore the possibility of stopping the trial early for administrative reasons, in which case the analysis of the primary endpoint would use all alpha remaining at that time and the data may or may not be sufficient to support a resubmission and/or approval of the NDA. An administrative stop is not certain, and the timing would be independent of the planned interim analyses. In any event, we believe data from VALOR-CKD will be very important in furthering our understanding of the regulatory path for approval of veverimer. As such,

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we intend to continue the execution of the VALOR-CKD trial with consideration of both the accelerated and traditional approval pathways. Resubmission and approval of the veverimer NDA may require additional clinical data beyond that provided by the VALOR-CKD trial, including an additional trial or trials to confirm magnitude, durability of effect or applicability to the U.S. population.
Because we may continue to develop our investigational drug candidate for the treatment of a disease or condition on the basis of an unvalidated surrogate endpoint, there are increased risks that the FDA may have difficulty analyzing and interpreting the results of our clinical program. In addition, the FDA may find that the demonstrated effect on a surrogate endpoint is not reasonably likely to predict clinical benefit. As a result, they may delay or refuse to approve veverimer. Thus far, the FDA has not been satisfied that the demonstrated magnitude and durability of effect of veverimer on the surrogate endpoint has been sufficient to support approval.
If we are able to obtain accelerated approval for veverimer, we will be subject to rigorous postmarketing requirements, including the completion of our ongoing VALOR-CKD trial, which we believe would serve as a confirmatory postmarketing trial, or such other confirmatory trials as the FDA may require, to verify the clinical benefit of the product, and submission to the FDA of all promotional materials prior to their dissemination. The FDA could seek to withdraw the approval for multiple reasons, including if we fail to conduct any required postmarketing trial with due diligence, our confirmatory postmarketing trial does not confirm the predicted clinical benefit, other evidence shows that the product is not safe or effective under the conditions of use, or we disseminate promotional materials that are found by the FDA to be false and misleading.
There can be no assurance that data from VALOR-CKD can be obtained on a timely basis or that they will be sufficient to support approval of veverimer. Any further delay in obtaining, or inability to obtain, approval would delay or prevent commercialization of veverimer and would materially adversely affect our business, financial condition, results of operations, cash flows and prospects. The denial of regulatory approval for veverimer could mean that we need to cease operations altogether.
We may be unable to obtain regulatory approval for veverimer under the traditional FDA approval process.
We may decide to pursue traditional approval of veverimer for the slowing of kidney disease progression or improving physical functioning in patients with metabolic acidosis associated with CKD rather than accelerated approval. To obtain traditional approval to market a drug product, we must provide the FDA with clinical data that adequately demonstrate the safety and efficacy of veverimer for the intended indication sought in the NDA.
The FDA generally requires at least two adequate and well-controlled studies to support approval of an NDA. A single Phase 3 clinical trial may be sufficient in rare instances, including (1) where the clinical trial is a large multicenter clinical trial demonstrating internal consistency and a statistically persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second clinical trial would be practically or ethically impossible or (2) when in conjunction with other confirmatory evidence. If the VALOR-CKD trial is successful, and we decide to pursue traditional approval, it would be based on our belief that our VALOR-CKD trial, supported by the TRCA-301/TRCA-301E trial, will provide sufficient evidence for FDA to approve veverimer for the slowing of kidney disease progression and potentially improving physical functioning in patients with metabolic acidosis associated with CKD. However, it is possible that the FDA will disagree. The FDA has broad discretion in determining whether to approve a drug, and the FDA could find a resubmitted NDA seeking traditional approval of veverimer on the basis of VALOR-CKD to be insufficient for a number of reasons, including the following reasons:
concerns regarding the robustness of the VALOR-CKD trial results;
concerns that the VALOR-CKD results are not generalizable to patients in the United States, including if the outcome events are driven by events in Eastern European subjects, treatment effects are dissimilar in U.S. and non-U.S. patients, or there is an insufficient number of events in U.S. or “U.S.-like” subjects;
concerns that the tools used to assess our patient-reported measures, the KDQOL Physical Functioning Survey and the Repeated Chair Stand Test, are not sufficiently validated for purposes of regulatory approval; and
concerns that potential blinding issues could affect our trial results, including patient-reported measures, which are subjective.

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If the FDA were to find that the results of our VALOR-CKD trial as supported by results from the TRCA-301/TRCA-301E trial are inadequate for approval of veverimer, the FDA would not approve our NDA.
A continued delay in obtaining regulatory approval could further delay commercialization of veverimer and adversely impact our ability to generate revenue, our business and our results of operations and the denial of such approval for veverimer could mean that we need to cease operations.
If we are not successful in obtaining approval to commercialize veverimer, or are significantly delayed in doing so, our business will be materially harmed, and we may need to curtail or cease operations. We are not permitted to market veverimer in the United States until we receive approval to market veverimer from the FDA. Similarly, we are not permitted to market veverimer in other countries until we receive approval to market veverimer from comparable foreign regulatory agencies.
We currently have no drug products approved for sale, and we may never obtain regulatory approval to market veverimer, either through the FDA’s Accelerated Approval Program or the traditional approval process. If we are unable to address the deficiencies identified in the CRL and the concerns identified in the ADL to the satisfaction of the FDA, we will not obtain regulatory approval of veverimer.
The FDA or any foreign regulatory agency can further delay, limit or deny approval to market veverimer for many reasons, including:
our inability to demonstrate to the satisfaction of the FDA or the applicable foreign regulatory agency that veverimer is safe and effective for the requested indication;
our inability to gain agreement from the FDA that veverimer is appropriate for approval through FDA’s Accelerated Approval Program or through traditional approval;
our inability to gain agreement from applicable foreign regulatory authorities that veverimer is appropriate for approval under applicable regulatory pathways;
the FDA’s or the applicable foreign regulatory agency’s disagreement with the interpretation of data from nonclinical and clinical studies and trials;
our ability to demonstrate that the results are applicable to the U.S. population or practice of medicine;
our inability to demonstrate that the clinical and other benefits of veverimer outweigh any safety or other perceived risks;
our ability to enroll an adequate number of subjects in a timely manner in our ongoing VALOR-CKD trial;
the FDA’s or the applicable foreign regulatory agency’s requirement for additional nonclinical or clinical studies or trials;
the FDA’s or the applicable foreign regulatory agency’s having differing requirements for the trial protocols used in our clinical trials;
the FDA’s or the applicable foreign regulatory agency’s non-approval of the formulation, labeling and/or the specifications of veverimer;
the FDA may require, as a condition of approval, modifications to existing, or additional, nonclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;
the FDA’s or the applicable foreign regulatory agency’s failure to accept the manufacturing processes or third-party manufacturers with which we contract;
the impact that pandemics, such as COVID-19, may have on the FDA's ability to review our NDA;
the impact that pandemics, such as COVID-19, may have on our ability to enroll and retain an adequate number of subjects in the VALOR-CKD trial, subject compliance with the study protocol, or the power of our ongoing VALOR-CKD trial; or

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the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.
Of the large number of drugs in development, only a small percentage successfully complete the FDA or other regulatory approval processes and are commercialized.
Even if we eventually complete clinical testing and receive approval of our NDA or foreign marketing authorization for veverimer, the FDA or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, which may be required after approval. The FDA or the applicable foreign regulatory agency may only approve veverimer subject to certain other conditions being met either before or after approval. The FDA or the applicable foreign regulatory agency may also approve veverimer for a more limited indication and/or a narrower patient population than we originally request, and the FDA or applicable foreign regulatory agency may not approve the labeling that we believe is necessary or desirable for the successful commercialization of veverimer. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of veverimer and would materially adversely impact our business and prospects.
Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and failure can occur at any stage of clinical development.
Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. The results of nonclinical and clinical studies and trials of our investigational drug candidate may not be predictive of the results of later-stage clinical trials. For example, the positive results generated to date in our Phase 1/2 trial, TRCA-101, our Phase 3 trial, TRCA-301, and our 40-week extension trial, TRCA-301E, for veverimer do not ensure that our ongoing VALOR-CKD trial, or other future clinical trials will demonstrate similar results. Drug candidates in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through nonclinical and clinical studies and trials. Several companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies and trials, and we cannot be certain that we will not face similar setbacks. Based upon negative or inconclusive results, we or any potential future collaborator may decide, or regulators may require us, to conduct additional nonclinical and clinical studies and trials. In addition, data obtained from trials and studies are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent regulatory approval. Additionally, clinical trials must be conducted in a manner that ensures the trial design and operations are carried out in a way that preserves double-blind, placebo-controlled status and maintains clinical trial data integrity. Furthermore, we rely on contract research organizations, or CROs, and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we have agreements governing their committed activities, we have limited influence over their actual performance. Even though we completed our registrational trial, TRCA-301/TRCA-301E, and even if any future clinical trials are completed, the results may not be sufficient to obtain regulatory approval, regardless of whether it is through the Accelerated Approval Program or the traditional approval process, for veverimer in the time frame we anticipate, or at all. Additional clinical trial results may inform our understanding of the safety and efficacy of veverimer and could impact the design and conduct of ongoing and future clinical trials.
A number of companies in the pharmaceutical industry have suffered significant setbacks in clinical trials even after promising results in earlier nonclinical or clinical studies and trials. These setbacks have been caused by, among other things, nonclinical findings made while clinical trials were underway and safety or efficacy observations made in clinical trials, including previously unreported adverse events. Success in nonclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and the results of clinical trials by other parties may not be indicative of the results in trials we may conduct. In addition, results from compassionate use or investigator-initiated research programs, if implemented, may not be confirmed in Company-sponsored trials and/or may negatively impact the prospects for marketing approval for veverimer.
Subject enrollment and retention are significant factors in the conduct of clinical trials and they are affected by many factors, including the size and nature of the patient population, the proximity of subjects to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and subjects’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating. The occurrence of pandemics, such as COVID-19, may negatively impact the ability to enroll, maintain and collect safety and efficacy data on subjects in a clinical trial.

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We could also encounter delays if a clinical trial is suspended or terminated by us, by the ethics committees or IRBs of the institutions in which such trials are being conducted, by an independent Data Monitoring Committee, or DMC, for such trial or by the FDA or other regulatory agencies. Such parties may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory agencies resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Further, conducting clinical trials in foreign countries presents additional risks that may delay completion of our clinical trials. These risks include the failure of physicians or enrolled subjects in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries. In addition, the FDA may determine that clinical trial results obtained in foreign subjects do not represent the safety and efficacy of a product when administered in U.S. patients and are thus not supportive of our NDA approval in the United States. Foreign authorities may have similar reservations in accepting data from clinical trials conducted outside of their territory for future marketing approvals outside of the U.S. The CRL issued by FDA questions the applicability of the TRCA-301/TRCA-301E trial findings to the U.S. population and practice of medicine, and based on feedback received from the FDA, although we have elected to focus future enrollment activities in our ongoing VALOR-CKD trial in the United States, Canada and Western Europe, to meet our goal of completing enrollment in 2021, we are also enrolling subjects in other non-Eastern European regions (i.e., Latin America and Asia-Pacific). When the VALOR-CKD trial is fully recruited, we anticipate that approximately 67% of subjects will have been enrolled at Eastern European sites, approximately 10-20% of subjects will have been enrolled at sites in the U.S., Western Europe and Canada, and the remainder at Latin American and Asia-Pacific region sites. However, our ongoing VALOR-CKD trial may have a large dropout rate of participants, or a low event rate, which could add time, expense and risk to the completion of the trial and could affect the results of the trial. In addition, the VALOR-CKD trial could be stopped early, for example, for efficacy or for administrative reasons, which creates additional risks related to study termination and could also affect the results of the trial. Moreover, the number of events being contributed from subjects in the United States or regions with “U.S.-like” subjects will, in part, be dependent on whether the VALOR-CKD study is stopped early and the proportion of such events would likely be smaller as a percentage of total events than if the trial were continued until 511 events are accrued. We cannot assure you that the FDA will accept the VALOR-CKD data in support of an NDA resubmission or approval and the acceptability of the data will ultimately be a review issue.
In August 2020, we received a CRL from the FDA for our NDA for veverimer. We held an End-of-Review meeting as a Type A meeting with the FDA’s Division of Cardiology and Nephrology in October 2020. Thereafter, we submitted an FDRR requesting that the OND find that the magnitude of serum bicarbonate change seen in the TRCA-301/TRCA-301E trial is reasonably likely to predict clinical benefit in the treatment of metabolic acidosis associated with CKD and that it can therefore serve as the basis for accelerated approval.
In February 2021, the OND issued a decision on our FDRR. While it acknowledged that the TRCA-301 and TRCA-301E trials met their serum bicarbonate endpoints with statistical significance, the OND issued an ADL and denied the appeal. We are still considering our options regarding how to proceed. We cannot assure you that we will be able to address the deficiencies identified in the CRL and the ADL to the satisfaction of the FDA.
In addition, we do not know whether future clinical trials, if any, will begin on time, need to be redesigned, enroll an adequate number of subjects on time or be completed on schedule, if at all. Clinical trials can be delayed, terminated early or aborted for a variety of reasons, including delay or failure to:
obtain regulatory approval to commence a trial, if applicable;
reach agreement on acceptable terms with prospective consultants, CROs, other third-party contract service providers and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs, other third-party contract service providers and trial sites;
successfully execute contractual obligations by our consultants, CROs, other third-party contract service providers and clinical trial sites;
obtain ethics committee or institutional review board, or IRB, approval at each site;

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recruit suitable trial subjects across an adequate number of suitable clinical trial sites and have such subjects remain on study drug, complete the clinical trial or return for post-treatment follow-up;