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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 June 30, 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/aa83d7bde79cfbc3c58833060ef161b2-tcda-20210630_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 July 30, 2021, the registrant had 50,428,734 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 June 30, 2021 and December 31, 2020
Condensed Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2021 and 2020
Condensed Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020
Condensed Statements of Cash Flows for the six months ended June 30, 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)
June 30,
2021
December 31,
2020
 
Assets
Current assets:
Cash and cash equivalents$22,865 $137,857 
Short-term investments152,901 171,670 
Prepaid expenses and other current assets5,261 4,488 
Total current assets181,027 314,015 
Long-term investments 22,757 
Property and equipment, net934 1,112 
Operating lease right-of-use assets12,987 13,801 
Total assets$194,948 $351,685 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$2,738 $3,508 
Current operating lease liabilities2,608 2,079 
Accrued expenses and other current liabilities19,522 28,671 
Total current liabilities24,868 34,258 
Term Loan, net 76,638 
Convertible Senior Notes, net122,951 118,670 
Non-current operating lease liabilities12,200 13,046 
Other long-term liabilities 202 
Total liabilities160,019 242,814 
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 June 30, 2021 and December 31, 2020.
  
Common stock, $0.001 par value; 400,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 50,428,734 and 50,210,779 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.
50 50 
Additional paid-in capital755,654 742,555 
Accumulated other comprehensive income (loss)(62)64 
Accumulated deficit(720,713)(633,798)
Total stockholders’ equity34,929 108,871 
Total liabilities and stockholders’ equity$194,948 $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
June 30,
Six Months Ended
June 30,
 2021202020212020
Operating expenses:
Research and development$19,781 $28,757 $51,956 $78,138 
General and administrative9,550 28,418 19,445 51,944 
Total operating expenses29,331 57,175 71,401 130,082 
Loss from operations(29,331)(57,175)(71,401)(130,082)
Other income (expense), net(296)2,675 149 3,488 
Interest expense(3,926)(3,756)(9,539)(5,776)
Loss on early extinguishment of Term Loan  (6,124) 
Loss before income taxes(33,553)(58,256)(86,915)(132,370)
Income tax benefit (expense) 86  86 
Net loss(33,553)(58,170)(86,915)(132,284)
Other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale investments, net of tax(21)902 (126)670 
Total comprehensive loss$(33,574)$(57,268)$(87,041)$(131,614)
Net loss per share, basic and diluted$(0.67)$(1.16)$(1.73)$(2.65)
Weighted-average number of shares outstanding, basic and diluted50,294,787 49,960,072 50,271,373 49,900,739 
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 
Issuance of common stock under equity incentive plans156,009 — 333 — — 333 
Stock-based compensation— — 6,609 — — 6,609 
Net unrealized gain (loss) on available-for-sale investments, net of tax— — — (21)— (21)
Net loss— — — — (33,553)(33,553)
Balance at June 30, 202150,428,734 $50 $755,654 $(62)$(720,713)$34,929 
 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 
Equity component of Convertible Senior Notes, net of underwriter discounts and issuance costs— — 79,498 — — 79,498 
Issuance of warrants in connection with Term Loan— — 112 — — 112 
Issuance of common stock under equity incentive plans126,355 — 1,098 — — 1,098 
Stock-based compensation— — 9,079 — — 9,079 
Net unrealized gain (loss) on available-for-sale investments, net of tax— — — 902 — 902 
Net loss— — — — (58,170)(58,170)
Balance at June 30, 202050,039,587 $50 $731,358 $863 $(501,291)$230,980 
See accompanying notes to condensed financial statements (unaudited).

5


TRICIDA, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Six Months Ended
June 30,
 20212020
Operating activities:
Net loss$(86,915)$(132,284)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization253 474 
Non-cash operating lease costs496 390 
Accretion (amortization) of premiums and discounts on investments335 (417)
Accretion of Term Loan and Convertible Senior Notes4,804 2,331 
Loss on early extinguishment of Term Loan6,124  
Stock-based compensation12,651 17,453 
Changes in fair value of compound derivative liability
(202)(650)
Other non-cash items(29)(86)
Changes in operating assets and liabilities:
Prepaid expenses and other assets(752)(5,113)
Accounts payable(769)(113)
Accrued expenses and other liabilities(9,103)(10,623)
Net cash used in operating activities(73,107)(128,638)
Investing activities:
Purchases of investments(96,883)(229,289)
Proceeds from maturities of investments137,949 171,955 
Purchases of property and equipment(76)(600)
Net cash provided by (used in) investing activities40,990 (57,934)
Financing activities:
Proceeds from issuance of common stock under equity incentive plans448 1,670 
Proceeds from Convertible Senior Notes, net 193,285 
Repayment of leasehold improvement loan(38)(28)
Cash paid for early extinguishment of Term Loan(83,285) 
Proceeds from Term Loan, net 14,971 
Net cash provided by (used in) financing activities(82,875)209,898 
Net increase (decrease) in cash and cash equivalents(114,992)23,326 
Cash and cash equivalents at beginning of period137,857 18,574 
Cash and cash equivalents at end of period$22,865 $41,900 
Supplemental disclosures
Cash paid for interest$5,274 $2,536 
Supplemental disclosures of non-cash investing and financing activities
Issuance of warrants related to Term Loan$ $112 
Purchases of property and equipment included in accounts payable and accrued expenses$ $428 
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. 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 June 30, 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, on reasonable terms or within a reasonable time frame, 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 and six months ended June 30, 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 June 30, 2021 and December 31, 2020.
June 30, 2021
Reported as:
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair ValueCash and Cash EquivalentsShort-Term InvestmentsLong-Term Investments
Cash$2,204 $— $— $2,204 $2,204 $— $— 
Level 1:
Money market funds20,661 — — 20,661 20,661 — — 
U.S. Treasury securities6,062 1  6,063  6,063  
Subtotal26,723 1  26,724 20,661 6,063  
Level 2:
U.S. government agency securities 29,170 9  29,179  29,179  
Commercial paper
115,669 21 (1)115,689  115,689  
Corporate debt securities
1,970   1,970  1,970  
Subtotal146,809 30 (1)146,838  146,838  
Total assets measured at fair value
$175,736 $31 $(1)$175,766 $22,865 $152,901 $ 
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 and six months ended June 30, 2021 and 2020. All available-for-sale investments held as of June 30, 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 six months ended June 30, 2021 and 2020. The key valuation assumptions used were the 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.
Six Months Ended June 30,
20212020
(in thousands)Compound Derivative LiabilityCompound Derivative Liability
Fair value at beginning of period$202 $977 
Change in fair value— (650)
Extinguishment of compound derivative liability upon extinguishment of Term Loan(202)— 
Fair value at end of period$ $327 
The estimated fair value of the Convertible Senior Notes was $80.2 million as of June 30, 2021 measured using Level 3 inputs. The key valuation assumptions used consist of the discount rate of 23.7% and volatility of 101.0%.
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 June 30, 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.
The following table presents the carrying amount of the liability and equity components of the Convertible Senior Notes as of June 30, 2021.
(in thousands)June 30,
2021
Liability component:
Principal $200,000 
Unamortized discount - equity component(73,345)
Unamortized underwriter discounts and issuance costs(3,704)
Net carrying amount$122,951 
Equity component, net of underwriter discounts and issuance costs$79,498 

9


The remaining unamortized debt discount will be amortized over approximately 6.0 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 and six months ended June 30, 2021.
(in thousands)Three Months Ended June 30, 2021Six Months Ended June 30, 2021
Contractual interest expense$1,750 $3,500 
Amortization of debt discount2,112 4,159 
Amortization of underwriter discounts and issuance costs64 123 
Total interest expense$3,926 $7,782 
NOTE 5. COMMITMENTS AND CONTINGENCIES
The Company has contractual obligations relating to its Convertible Senior Notes, operating lease, manufacturing and service contracts, and other research and development activities. The following table aggregates the Company’s material expected contractual obligations and commitments as of June 30, 2021.
June 30, 2021
(in thousands)Total
2021(4)
2022 - 20232024 - 2025Thereafter
Convertible Senior Notes(1)
$242,000 $3,500 $14,000 $14,000 $210,500 
Lease obligations(2)
18,601 1,307 5,780 6,131 5,383 
Manufacturing and service contracts(3)
612,226 17,953 92,992 117,948 383,333 
Total contractual obligations and commitments$872,827 $22,760 $112,772 $138,079 $599,216 
(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 six 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 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.

10


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"). In April 2021, the court appointed Jeffrey Fiore as lead plaintiff and Block & Leviton LLP as lead plaintiffs’ counsel. In June 2021, the lead plaintiff filed an amended complaint which alleges that during the period between June 28, 2018 through February 25, 2021, 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. The amended complaint makes claims against the Company and its CEO. In July 2021, Tricida filed a motion to dismiss the amended complaint. 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”). 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. 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 Goodman Derivative Case.
On May 27, 2021, a third 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, Verica v. Veitinger et al., Case No, 1:21-cv-00759 (the "Verica Derivative Case" and collectively with the Goodman Derivative Case and Ricks Derivative Case, the "Derivative Cases"). As with the Goodman Derivative Case and Ricks Derivative Case, the Verica 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. Additionally, the complaint asserts claims for violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and for unjust enrichment and waste of corporate assets. No damages amount is specified in the Verica Derivative Case.
The Derivative Cases have been consolidated by order of the District of Delaware Court and lead plaintiffs' counsel has been appointed. A consolidated complaint has not yet been filed.
As of June 30, 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 aware of, the Company may become party to various claims and complaints arising in the ordinary course of business.

11


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 June 30, 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, 202062  62 
Non-cash and other adjustments(62) (62)
Balance at June 30, 2021$ $ $ 
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 June 30, 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, 20203,783 1,011  4,794 
Cash payments made(4,013)(685) (4,698)
Non-cash and other adjustments230 (63) 167 
Balance at June 30, 2021$ $263 $ $263 
Restructuring costs of $(0.1) million and $0.1 million were recorded in operating expenses in our condensed statements of operations and comprehensive loss for the three and six months ended June 30, 2021, respectively.

12


NOTE 7. NET LOSS PER SHARE
The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the three and six months ended June 30, 2021 and 2020.
 Three Months Ended
June 30,
Six Months Ended
June 30,
 (In thousands, except share and per share amounts)2021202020212020
Numerator:
Net loss$(33,553)$(58,170)$(86,915)$(132,284)
Denominator:
Weighted-average common shares outstanding50,294,787 49,963,026 50,271,373 49,904,323 
Less: weighted-average shares subject to repurchase (2,954) (3,584)
Weighted-average number of shares used in basic and diluted net loss per share50,294,787 49,960,072 50,271,373 49,900,739 
Net loss per share, basic and diluted$(0.67)$(1.16)$(1.73)$(2.65)
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.
June 30,
20212020
Warrants to purchase common stock31,352 138,268 
Assumed conversion of Convertible Senior Notes6,019,560 6,019,560 
Common stock subject to repurchase 2,520 
Stock options and RSUs issued and outstanding12,075,502 9,557,072 
Total potential common shares excluded from the computation of diluted net loss per share18,126,414 15,717,420 


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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, in patients with metabolic acidosis and CKD. 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, to slow progression of kidney disease by correcting chronic metabolic acidosis in patients with CKD. We estimate that metabolic acidosis affects approximately 3 million patients with CKD in the United States, and we believe that slowing the progression of CKD in patients with metabolic acidosis and CKD represents a significant unmet medical need and market opportunity. In addition, considering that acid retention is thought to occur in patients with CKD prior to clinical diagnosis of metabolic acidosis (serum bicarbonate less than 22 mEq/L), we believe there may be potential to pursue a development pathway for veverimer which, with additional data, could expand the market opportunity beyond metabolic acidosis to include patients with CKD and eubicarbonatemia, also known as latent acidosis, who may also benefit from a therapy that aids in acid removal.
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, Hong Kong, Israel, Japan, Mexico and Russia, and at least 2034 in Australia, China, 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

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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-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.
We believe the timeline to meet the requirements for accelerated approval as suggested in the ADL may not

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result in the most rapid pathway for resubmission of the NDA for veverimer or be achievable with our current resources. For example, there are scenarios where renal outcomes data from the VALOR-CKD trial would be available before the week 52 serum bicarbonate data from the fully enrolled VALOR-CKD trial suggested in the ADL which, based on current enrollment, would not be available until at least early 2023. However, if the trial is stopped early for efficacy at the pre-specified 250-event interim analysis, renal outcomes data would become available in late 2022 based on current event accrual. Renal outcomes data from the VALOR-CKD trial could also become available sooner than 2023 if we are compelled to stop the trial early for administrative reasons due to a lack of adequate resources to complete the trial in accordance with the protocol. While the timing of an administrative stop is not certain and is dependent on many factors, it could occur prior to the planned interim analysis at 250 events.
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. In August 2021, we submitted a VALOR-CKD protocol amendment that eliminated the first interim analysis for early stopping for efficacy after 150 subjects with primary endpoint events have accrued. The VALOR-CKD trial still includes a single interim analysis for early stopping for efficacy after 250 subjects with primary endpoint events have accrued (anticipated in mid-2022, based on the current rate of event accrual). The interim analysis will be conducted by an independent unblinded Interim Analysis Committee. If the independent unblinded Interim Analysis Committee recommends stopping the trial early for efficacy, and we agree with that recommendation, the study would be terminated and data from the trial would be analyzed according to the pre-specified statistical analysis plan. However, if the committee does not recommend stopping the trial early for efficacy, we will receive no information from the interim analysis. 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 August 6, 2021, the VALOR-CKD trial has randomized 1,455 of 1,600 subjects with an average treatment duration of approximately 17 months and has accrued 127 subjects with positively adjudicated primary endpoint events. 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, we have reopened recruitment at sites in Latin America and Asia-Pacific. We do not intend to reopen recruitment at sites in Eastern Europe. Due in part to the change in geographic focus as well as the impact of COVID-19 on patient recruitment and enrollment, we now expect to complete enrollment in the first half of 2022. 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. Due to the time required for enrolled subjects to experience endpoint events, if the VALOR-CKD trial is stopped early at the 250-event interim analysis or stopped early for administrative reasons, the number of endpoint events being contributed from subjects in the United States or regions with “U.S.-like” subjects will likely be smaller as a percentage of total events than if the trial were continued until 511 events. We intend to ensure that no single site in the VALOR-CKD trial provides ≥ 5% of the total number of trial subjects.
If we are unable to ensure that we have adequate resources to complete the VALOR-CKD trial in accordance with the protocol, we may be compelled to stop the trial early for administrative reasons. The timing of a decision on whether to stop VALOR-CKD is uncertain and is dependent on assessment of many factors, including our then-current financial resources, and may occur prior to the planned interim analysis at 250 events. In the event of an administrative stop, the analysis of the primary endpoint would use all alpha remaining at that time and analysis of data from the trial would proceed as pre-specified in the statistical analysis plan. Data obtained from an administrative stop may or may not be sufficient to support a resubmission and/or approval of the NDA.
In any event, we believe data from VALOR-CKD will be very important in furthering our understanding of, and informing decisions regarding, the appropriate regulatory path for resubmission of the NDA for veverimer. For example, if the VALOR-CKD trial is stopped early for efficacy based on analysis of the primary endpoint (i.e., DD40) at the planned interim analysis, additional data on the effect of veverimer on (1) CKD progression; (2) physical

16


functioning; and (3) serum bicarbonate will become available. As such, we intend to continue the execution of the VALOR-CKD trial with consideration of both the accelerated and traditional approval pathways. Regardless of the regulatory pathway, 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. Resubmission and approval of the veverimer NDA could also require additional clinical data beyond that provided by the VALOR-CKD trial.
Together with our investigators, contract research organizations, or CROs, and other contract service providers, we are regularly assessing the 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%. 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 due to the impact of COVID-19. 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 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 June 30, 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 $33.6 million and $58.2 million for the three months ended June 30, 2021 and 2020, respectively, and $86.9 million and $132.3 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, we had an accumulated deficit of $720.7 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;

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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
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.

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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. 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 $(0.1) million and $0.1 million were recorded in operating expenses in our condensed statements of operations and comprehensive loss for the three and six months ended June 30, 2021, respectively.
Results of Operations
The following table presents our results of operations for the three and six months ended June 30, 2021 and 2020.
 Three Months Ended
June 30,
ChangeSix Months Ended
June 30,
Change
(in thousands)20212020$%20212020$%
Operating expenses:
Research and development$19,781 $28,757 $(8,976)(31)%$51,956 $78,138 $(26,182)(34)%
General and administrative9,550 28,418 (18,868)(66)%19,445 51,944 (32,499)(63)%
Total operating expenses29,331 57,175 (27,844)(49)%71,401 130,082 (58,681)(45)%
Loss from operations(29,331)(57,175)27,844 (49)%(71,401)(130,082)58,681 (45)%
Other income (expense), net(296)2,675 (2,971)(111)%149 3,488 (3,339)(96)%
Interest expense(3,926)(3,756)(170)%(9,539)(5,776)(3,763)65 %
Loss on early extinguishment of Term Loan— — — N/M(6,124)— (6,124)N/M
Loss before income taxes(33,553)(58,256)24,703 (42)%(86,915)(132,370)45,455 (34)%
Income tax benefit (expense)— 86 (86)(100)%— 86 (86)(100)%
Net loss$(33,553)$(58,170)$24,617 (42)%$(86,915)$(132,284)$45,369 (34)%
N/M = Not meaningful
Research and Development Expense
The following table presents our research and development expense for the three months ended June 30, 2021 and 2020.
 Three Months Ended
June 30,
Change
(in thousands)20212020$%
Clinical development costs$13,120 $20,917 $(7,797)(37)%
Personnel and related costs3,107 3,949 (842)(21)%
Stock-based compensation expense2,723 3,191 (468)(15)%
Other research and development costs831 700 131 19 %
Total research and development expense$19,781 $28,757 $(8,976)(31)%
Comparison of the three months ended June 30, 2021 and 2020

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Research and development expense was $19.8 million and $28.8 million for the three months ended June 30, 2021 and 2020, respectively. The decrease of $9.0 million was due to decreased activities in connection with our veverimer clinical development program, resulting in a decrease of clinical development costs of $7.8 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 $0.5 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; partially offset by an increase in other research and development costs of $0.1 million.
The following table presents our research and development expense for the six months ended June 30, 2021 and 2020.
 Six Months Ended
June 30,
Change
(in thousands)20212020$%
Clinical development costs$38,795 $62,057 $(23,262)(37)%
Personnel and related costs6,280 7,881 (1,601)(20)%
Stock-based compensation expense5,129 6,324 (1,195)(19)%
Other research and development costs1,752 1,876 (124)(7)%
Total research and development expense$51,956 $78,138 $(26,182)(34)%
Comparison of the six months ended June 30, 2021 and 2020
Research and development expense was $52.0 million and $78.1 million for the six months ended June 30, 2021 and 2020, respectively. The decrease of $26.2 million was due to decreased activities in connection with our veverimer clinical development program, resulting in a decrease of clinical development costs of $23.3 million related to manufacturing process optimization and drug substance manufacturing costs related to our VALOR-CKD trial; decreased personnel and related costs of $1.6 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 $1.2 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 $0.1 million primarily related to lower travel costs.
General and Administrative Expense
The following table presents our general and administrative expense for the three months ended June 30, 2021 and 2020.
 Three Months Ended
June 30,
Change
(in thousands)20212020$%
Personnel and related costs$2,282 $8,428 $(6,146)(73)%
Stock-based compensation expense3,886 5,888 (2,002)(34)%
Other general and administrative costs3,382 14,102 (10,720)(76)%
Total general and administration expense$9,550 $28,418 $(18,868)(66)%
Comparison of the three months ended June 30, 2021 and 2020
General and administrative expense was $9.6 million and $28.4 million for the three months ended June 30, 2021 and 2020, respectively. The decrease of $18.9 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 $6.1 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 $2.0 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 $10.7 million primarily related to reduction in pre-commercialization activities, medical affairs activities, legal, recruiting and training costs.

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The following table presents our general and administrative expense for the six months ended June 30, 2021 and 2020.