View Filing Data

Prepaid expenses and other current assets

(22,198,000)

33,384,000

(393,000)

Inventory

(29,142,000)

26,000

10,541,000

(977,000)

(4,193,000)

Other long-term assets

4,917,000

903,000

(991,000)

Accounts payable

1,372,000

13,717,000

4,959,000

Accrued expense

(27,351,000)

55,482,000

21,974,000

Operating lease liabilities

2,531,000

Net cash used in operating activities

(39,739,000)

(66,935,000)

(17,665,000)

Deferred rent

418,000

314,000

(257,441,000)

(97,494,000)

(56,159,000)

Investing activities:

Acquisition of business, net of acquired cash and restricted cash

6,147,000

Purchase of property and equipment

(6,655,000)

(1,606,000)

(1,622,000)

Proceeds from the maturities of available for sale securities

153,110,000

243,269,000

149,998,000

Proceeds from sales of available for sale securities

64,721,000

13,000,000

5,000,000

Purchase of available for sale securities

(224,216,000)

(330,636,000)

Net cash provided by (used in) investing activities

211,176,000

36,594,000

(177,260,000)

Financing activities:

Proceeds from the issuance of common stock, net of issuance costs

25,785,000

95,452,000

114,580,000

Proceeds from the sale of stock under employee stock purchase plan

383,000

482,000

353,000

Proceeds from the exercise of stock options

560,000

647,000

1,312,000

Retirement of treasury stock

(426,000)

Proceeds from the issuance of debt, net

77,668,000

Payments on debt

(15,000,000)

Payments on capital lease obligations

(19,000)

(5,000)

Net cash provided by financing activities

88,970,000

96,562,000

116,240,000

Increase (decrease) in cash, cash equivalents, and restricted cash

42,705,000

35,662,000

(117,179,000)

Cash, cash equivalents, and restricted cash at beginning of the period

107,099,000

71,437,000

188,616,000

Cash, cash equivalents, and restricted cash at end of the period

$ 149,804,000

107,099,000

$ 71,437,000

Non-cash financing activities

Fair value of shares and equity awards issued in acquisition

$ 527,754,000

[1]	Relates to non-cash expense associated with the fair value of the Baupost additional shares (see Note 5).

Nature of Organization and Operations

12 Months Ended

Dec. 31, 2019

Nature of Organization and Operations

1. Nature of Organization and Operations

Akebia Therapeutics, Inc., referred to as Akebia or the Company, was incorporated in the State of Delaware in 2007. Akebia is a biopharmaceutical company focused on the development and commercialization of renal therapeutics for people living with kidney disease. Akebia’s lead investigational product candidate, vadadustat, is an oral therapy in Phase 3 development. The Company believes vadadustat has the potential to set a new standard of care in the treatment of anemia due to CKD, acting via a novel hypoxia inducible factor, or HIF, pathway. HIF is the primary regulator of the production of red blood cells, or RBCs, in the body, as well as other important metabolic functions. The Company’s commercial product, Auryxia is currently approved by the United States Food and Drug Administration, or FDA, and marketed for two indications in the United States, the control of serum phosphorus levels in adult patients with chronic kidney disease, or CKD, on dialysis, or DD-CKD, and the treatment of iron deficiency anemia, or IDA, in adult patients with CKD not on dialysis, or NDD-CKD. Ferric citrate is also approved and marketed in Japan as an oral treatment for the improvement of hyperphosphatemia in patients with DD-CKD and NDD-CKD under the trade name Riona.

On November 11, 2019, the Company, with Keryx Biopharmaceuticals, Inc., or Keryx, as guarantor, entered into a loan agreement, or the Loan Agreement, with Biopharma Credit plc as collateral agent and lender, or the Collateral Agent, and Biopharma Credit Investments V (Master) LP as lender, or collectively with the Collateral Agent, Pharmakon, pursuant to which term loans in an aggregate principal amount of $100.0 million are available to the Company in two tranches, subject to certain terms and conditions, or the Term Loan. The first tranche of $80.0 million, or Tranche A, was drawn on November 25, 2019. The second tranche under the Term Loan allows the Company to borrow an additional $20.0 million until December 31, 2020, subject to the satisfaction of customary conditions. Refer to Note 11 to our consolidated financial statements in Part II, Item 8 – Financial Statements and Supplementary Data for additional details on the Loan Agreement.

On December 12, 2018, the Company completed a merger with Keryx Biopharmaceuticals, Inc., or Keryx, or the Merger. Pursuant to the terms and conditions of the Agreement and Plan of Merger, or the Merger Agreement, each share of Keryx common stock, or Keryx Share, issued and outstanding immediately prior to the effective time of the Merger, or the Effective Time, was cancelled and converted into 0.37433, or the Exchange Multiplier, fully paid and non-assessable shares of Akebia common stock, or Akebia Shares, resulting in the issuance of an aggregate of 59,270,410 Akebia Shares.

Since inception, the Company has devoted most of its resources to research and development, including its preclinical and clinical development activities, raising capital, and providing general and administrative support for these operations. The Company began recording revenue from the U.S. sales of Auryxia and revenue from sublicensing rights to Auryxia in Japan to the Company’s Japanese partners Japan Tobacco, Inc. and its subsidiary Torii Pharmaceutical Co., Ltd., collectively JT and Torii, on December 12, 2018. The Company has not generated a profit to date and may never generate profits from product sales. The Company’s product candidates are subject to long development cycles, and the Company may be unsuccessful in its efforts to develop, obtain marketing approval for or market its product candidates. If the Company does not successfully commercialize any of its products or product candidates, it may be unable to achieve profitability.

The Company is subject to a number of risks including, but not limited to, risks relating to integration following the Merger, the need to obtain adequate additional funding, including the resources necessary to fund the continued commercialization of Auryxia, the global Phase 3 program for vadadustat in NDD-CKD, called PRO₂TECT, and DD-CKD, called INNO₂VATE, and post-approval studies with respect to Auryxia, risks relating to market acceptance, coverage and reimbursement of Auryxia, risks related to maintaining the Company’s commercial organization and capabilities, risks relating to potential generic entrants, risks of clinical trial failures, the risk of relying on third parties, the risk that the Company never achieves profitability, protection of proprietary technology, compliance with governmental regulations, and dependence on key personnel, and the impact of legal, regulatory and administrative proceedings. Overall, the PRO₂TECT and INNO₂VATE Phase 3 programs have enrolled 7,436 patients. In August 2016, the first patient was dosed in INNO₂VATE. The Company completed enrollment of INNO₂VATE in April 2019. The Company anticipates reporting top-line data for the INNO₂VATE studies in the second quarter of 2020. The first patient was dosed in PRO₂TECT in December 2015. The Company completed enrollment of PRO₂TECT in August 2019. The Company anticipates reporting top-line data for the PRO₂TECT studies in mid-2020.

In December 2015, the Company entered into a collaboration agreement with Mitsubishi Tanabe Pharma Corporation, or MTPC, to develop and commercialize vadadustat in Japan and certain other countries in Asia, collectively, the MTPC Territory, for total payments of up to $245.0 million, comprised of a $20.0 million upfront payment, up to $50.0 million in specified development and regulatory milestones, and up to $175.0 million in specified commercial milestones, as well as tiered double-digit royalty payments up to 20% on sales of vadadustat in the MTPC Territory, subject to a reduction upon launch of a generic product on a country-by-country basis (Note 4).

In December 2016, the Company entered into a collaboration and license agreement with Otsuka Pharmaceutical Co. Ltd., or Otsuka, to develop and commercialize vadadustat in the United States. In December 2016, the Company received $125.0 million upfront payment, and in March 2017, Otsuka reimbursed the Company approximately $33.8 million for global expenses previously incurred by us for its ongoing global development program for vadadustat in DD-CKD and NDD-CKD patients. The agreement also provides for additional funding for the global development program for vadadustat, totaling $266.8 million or more, depending on the actual global development costs incurred. In addition, Akebia is eligible to receive from Otsuka up to $190.0 million in specified development and regulatory milestones and up to $575.0 million in specified commercial milestones. The Company will share with Otsuka the costs of developing and commercializing vadadustat in the United States and the profits from sales of vadadustat in the United States after approval by the FDA and commercial launch (Note 4).

In April 2017, the Company entered into a collaboration and license agreement with Otsuka to develop and commercialize vadadustat in Europe, Russia, China, Canada, Australia, the Middle East and certain other territories. In April 2017, the Company received a $73.0 million upfront payment and $0.2 million for global expenses previously incurred by the Company in implementing the current global Phase 3 development plan for vadadustat in DD-CKD and NDD-CKD patients in excess of a specified threshold during the quarter-ended March 31, 2017. The agreement also provides for additional funding for the global development program for vadadustat, totaling $214.0 million or more, depending on the actual global development costs incurred. In addition, Akebia is eligible to receive from Otsuka up to $132.0 million in specified development and regulatory milestones and up to $525.0 million in specified commercial milestones (Note 4).

From inception through December 31, 2019, the Company has raised approximately $494.6 million of net proceeds from the sale of equity, including $377.4 million from several underwritten public offerings, $67.2 million from at-the-market offerings, or ATM offerings, pursuant to sales agreements with Cantor Fitzgerald & Co. and $50.0 million from the sale of 3,571,429 shares of common stock to Vifor (International) Ltd., or Vifor Pharma. In November 2019, the Company also received net proceeds of $77.3 million from Tranche A of the Loan Agreement with Pharmakon. Subsequent to December 31, 2019 and through February 4, 2020, the Company raised $56.7 million from ATM offerings. At inception of the Company’s collaboration agreements with Otsuka and MTPC, they committed to an aggregate of approximately $573.0 million or more in cost-share funding, of which the Company received approximately $272.0 million at the onset of the collaborations, and the remainder of which the Company generally continues to receive on a quarterly prepaid basis, and via license payments.

Management of the Company completed its going concern assessment in accordance with ASC 205-40. The Company believes that its cash resources will be sufficient to allow the Company to fund its current operating plan through at least the next twelve months from the filing of the Company’s 2019 Annual Report on Form 10-K, as required by ASC 205-40. There can be no assurance, however, that the current operating plan will be achieved in the time frame anticipated by the Company, or that its cash resources will fund the Company’s operating plan for the period anticipated by the Company or that additional funding will be available on terms acceptable to the Company, or at all. The Company will require additional capital for the further commercialization of Auryxia and continued development and potential commercialization of the Company’s existing product candidates and would need to raise additional funds to pursue development activities related to any additional product candidates. If and until the Company can generate a sufficient amount of product revenue, the Company expects to finance future cash needs through public or private equity or debt transactions, payments from its collaborators, royalty transactions, strategic transactions, or a combination of these approaches. However, adequate additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it may be forced to delay, reduce or eliminate its research and development programs or any commercialization efforts.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB).

New Accounting Pronouncements – Recently Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires entities to recognize right-of-use assets and lease liabilities for leases with lease terms of more than 12 months on their balance sheets and provide enhanced disclosures. In 2018, the FASB issued additional ASUs related to Topic 842, or ASC 842, that clarified various aspects of the new lease guidance, including how to record certain transition adjustments, as well as other improvements and practical expedients. The Company adopted this new standard on January 1, 2019 using the modified retrospective approach for all leases existing at, or entered into after, the date of initial application, and has elected to use the following practical expedients that are permitted under the rules of the adoption:

•

The Company elected the package of transition practical expedients, which allows it to retain the lease classification and initial direct costs for any leases that existed prior to the adoption of this new standard.

•

The Company will not reassess whether any contracts completed prior to the adoption are leases.

The Company adopted ASC 842 using the modified retrospective approach, as of January 1, 2019, with no restatements of prior periods or a cumulative effect of the adoption of ASC 842 in retained earnings. On January 1, 2019, the Company recognized additional operating lease liabilities, net of deferred rent, of approximately $37.1 million based on the present value of the remaining minimum lease payments, a corresponding right of use assets of approximately $33.4 million, and $0.9 million to prepaid expenses and other current assets related to leasehold improvement allowances that had yet to be incurred as of the date of adoption, but for which the Company was reasonably certain to incur costs at least equal to the maximum level of leasehold improvement allowance. The adoption of ASC 842 did not have an impact on the Company’s consolidated statement of operations. Prior periods are presented in accordance with ASC 840, Leases.

The Company made an accounting policy election not to recognize leases with an initial term of 12 months or less within its consolidated balance sheets and to recognize those lease payments on a straight-line basis in its consolidated statements of operations. The Company also made the accounting policy election not to separate the non-lease components from the lease components for its building leases and, rather, account for each non-lease component and lease component as a single component.

The Company determines if an arrangement is a lease at inception. An arrangement is determined to contain a lease if the contract conveys the right to control the use of an identified property, plant, or equipment for a period of time in exchange for consideration. If the Company can benefit from the various underlying assets of a lease on their own or together with other resources that are readily available, or if the various underlying assets are neither highly dependent on nor highly interrelated with other underlying assets in the arrangement, they are considered to be a separate lease component. In the event multiple underlying assets are identified, the lease consideration is allocated to the various components based on each of the component’s relative fair value.

Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the leasing arrangement. Operating lease assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when readily determinable and uses an estimate of its incremental borrowing rate when the implicit rate is not readily determinable based upon the available information at the commencement date of lease inception. The incremental borrowing rate is determined using a credit rating scoring model to estimate the Company’s credit rating, adjusted for collateralization. The calculation of the operating lease assets includes any lease payments made and excludes any lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The Company’s operating leases are reflected in prepaid expenses and other current assets, operating lease assets, accrued expenses and operating lease liabilities, net of current portion in its consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies how companies calculate goodwill impairments by eliminating Step 2 of the impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 requires companies to compare the fair value of a reporting unit to its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to the related reporting unit. This ASU is effective for annual periods beginning after December 15, 2019, and is applicable to the Company in fiscal year 2020. Early adoption is allowed, and the Company adopted ASU 2017-04 in the first quarter of fiscal year 2019. The Company conducted its initial goodwill impairment test as of October 1, 2019 and will continue to do so annually hereafter, or more frequently if indicators of impairment are present or changes in circumstances suggest that an impairment may exist.

New Accounting Pronouncements – Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Currently, U.S. GAAP delays recognition of the full amount of credit losses until the loss is probable of occurring. Under this ASU, the income statement will reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses will be based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down of the security. Additionally, credit losses for trade receivables will be also be recorded through an allowance that reflects the Company’s current estimate of credit losses expected to be incurred. This ASU is effective for annual periods beginning after December 15, 2019, and is applicable to the Company in fiscal year 2020. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial position and results of operations. Based on the composition of the Company’s available-for-sale debt securities, trade receivables, and other financial assets, and also taking into account current market conditions and historical credit loss activity, the Company does not expect that the adoption of this standard will have a material impact on the Company’s consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements. This ASU is effective for annual periods beginning after December 15, 2019, and is applicable to the Company in fiscal year 2020. Early adoption is permitted. The Company is currently evaluating the impact the adoption of the standard will have on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods therein, and is applicable to the Company in fiscal year 2021. Early adoption is permitted. The Company does not expect that the adoption of this standard will have a material impact on the Company’s consolidated financial statements and related disclosures.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing novel therapeutics for people with kidney disease.

Derivative Financial Instruments

The Company accounts for warrants and other derivative financial instruments as either equity or liabilities in accordance with ASC Topic 815, Derivatives and Hedging, or ASC 815, based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s consolidated balance sheets and no further adjustments to their valuation are made. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and will be revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. The warrant issued by the Company in connection with the Janssen Pharmaceutica NV Research and License Agreement, the Janssen Agreement, is classified as equity in the Company’s consolidated balance sheet. (See Note 12). The derivative liability recorded in connection with the Company’s Loan Agreement with Pharmakon is classified as a liability in the Company’s consolidated balance sheet. (See Note 11).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: prepaid and accrued research and development expense, operating lease assets and liabilities, derivative liabilities, other non-current liabilities, stock-based compensation expense, product and collaboration revenues including various rebates and reserves related to product sales, inventories, income taxes, intangible assets and goodwill.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents consist of all cash on hand, deposits and funds invested in available for sale securities with original maturities of three months or less at the time of purchase. Cash equivalents are reported at fair value. At December 31, 2019, the Company’s cash is primarily in money market funds. The Company may maintain balances with its banks in excess of federally insured limits.

Restricted cash represents amounts required for security deposits under the Company’s office and lab space lease agreements and, at December 31, 2018, cash balances held as collateral for the Company’s employee credit card program. Restricted cash is included in “prepaid expenses and other current assets” and “other assets” in the consolidated balance sheets.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet that sum to the total of the amounts reported in the consolidated statement of cash flows (in thousands):

	December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2016
Cash and cash equivalents	$	147,449	$	104,644	$	70,156	$	187,335
Prepaid expenses and other current assets		263		—		—		—
Other assets		2,092		2,455		1,281		1,281
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	149,804	$	107,099	$	71,437	$	188,616

Investments

Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. Currently, the Company classifies all securities as available for sale which are included in current assets as they are intended to fund current operations. The Company carries available for sale securities at fair value. The Company conducts periodic reviews to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment and its application to certain investments. When assessing whether a decline in the fair value of a security is other-than-temporary, the Company considers the fair market value of the security, the duration of the security’s decline, and prospects for the underlying business. Based on these considerations, the Company did not identify any other-than-temporary unrealized losses at December 31, 2019. Unrealized losses on available for sale securities that are determined to be temporary, and not related to credit loss, are recorded in accumulated other comprehensive loss, a component of stockholders’ equity. The amortized cost of debt securities in this category reflects amortization of premiums and accretion of discounts to maturity computed under the effective interest method. The Company includes this amortization in the caption “Interest income, net” within the consolidated statements of operations and comprehensive loss. The Company also includes in net investment income, realized gains and losses and declines in value determined to be other than temporary. The Company bases the cost of securities sold upon the specific identification method and includes interest and dividends on securities in interest income.

Accounts Receivable

The Company’s accounts receivable represent amounts due to the Company from product sales (see Note 3) and from its collaboration agreements with MTPC and Otsuka (see Note 4). Reimbursable costs that have not been invoiced as of the balance sheet date are recorded as unbilled accounts receivable. Accounts receivable arising from product sales primarily represent amounts due from wholesale distributors as well as certain specialty pharmacy providers, or collectively, Customers. The Company deducts trade allowances for prompt payment, among other discounts, from its accounts receivable based on its experience that the Company’s Customers will earn these discounts and fees.

The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed as well as historical payment patterns and existing economic factors. The Company believes that credit risks associated with its Customers and collaboration partners are not significant. The Company did not have an allowance for doubtful accounts as of December 31, 2019 and 2018.

Concentrations of Credit Risk and Off-Balance Sheet Risk

Cash, cash equivalents, investments, and accounts receivable are the only financial instruments that potentially subject the Company to concentrations of credit risk. The Company maintains its cash, cash equivalents, and investments with high quality, accredited financial institutions and, accordingly, such funds are subject to minimal credit risk. The Company’s investment policy includes guidelines on the quality of the institutions and financial instruments and defines allowable investments that the Company believes minimizes the exposure to concentration of credit risk. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

Accounts receivable represent amounts due from the Company’s Customers and collaboration partners. As part of its credit management policy, the Company performs ongoing credit evaluations of its Customers and generally does not require collateral from any customer. The Company also monitors economic conditions of its collaboration partners to identify facts or circumstances that may indicate that any of its accounts receivable are at risk of collection.

Gross revenues and accounts receivable from each of the Company’s Customers or collaboration partners who individually accounted for 10% or more of total gross revenues and/or 10% or more of total gross accounts receivable consisted of the following:

	Percent of Total Gross Revenues
	Years Ended December 31,
	2019			2018			2017
Otsuka Pharmaceutical Co. Ltd.		45	%		90	%		76	%
Fresenius Medical Care Rx		21	%		—			—
AmerisourceBergen Drug Corporation		10	%		—			—

	Percent of Gross Accounts Receivable
	As of December 31,
	2019			2018
Otsuka Pharmaceutical Co. Ltd. ⁽¹⁾		35	%		—
AmerisourceBergen Drug Corporation		16	%		11	%
Cardinal Health, Inc.		15	%		13	%
Fresenius Medical Care Rx ⁽²⁾		15	%		42	%
McKesson Corporation		11	%		22	%

⁽¹⁾

Accounts receivable from Otsuka Pharmaceutical Co. Ltd. did not represent greater than 10% of gross accounts receivable at December 31, 2018 due to timing of payments and costs incurred. As such, the Company did not have an accounts receivable balance for Otsuka as of December 31, 2018.

⁽²⁾

The change in accounts receivable for Fresenius Medical Care Rx as of December 31, 2018 to December 31, 2019 was due to timing of payments received. Fresenius was the Company’s largest commercial customer in 2019 by total gross revenue, as seen in the Percent of Total Gross Revenues table above.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation. Assets under capital lease are included in property and equipment. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines and technological obsolescence. Recorded values of asset groups of equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale).

The following is the summary of property and equipment and related accumulated depreciation as of December 31, 2019 and 2018.

	Useful Life	December 31, 2019			December 31, 2018
		(in thousands)
Computer equipment and software	3	$	1,010		$	1,593
Furniture and fixtures	5-7		2,086			1,170
Equipment	7		2,451			1,780
Leasehold improvements	Shorter of the useful life or remaining lease term (10 years)		8,497			5,324
Office equipment under capital lease	3		—			114
			14,044			9,981
Less accumulated depreciation			(3,664	)		(1,958	)
Net property and equipment		$	10,380		$	8,023

Depreciation expense was approximately $2.2 million, $0.9 million and $0.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. For the year ended December 31, 2019, approximately $2.1 million of certain leasehold improvements were written off in connection with the sublease of the Boston office.

Inventory

The Company values its inventories at the lower-of-cost or net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company classifies its inventory costs as long-term, in other assets in its consolidated balance sheets, when it expects to utilize the inventory beyond their normal operating cycle.

Prior to the regulatory approval of its product candidates, the Company incurs expenses for the manufacture of material that could potentially be available to support the commercial launch of its products. Until the first reporting period when regulatory approval has been received or is otherwise considered probable and the future economic benefit is expected to be realized, the Company records all such costs as research and development expense. Inventory used in clinical trials is also expensed as research and development expense, when selected for such use. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in a clinical manufacturing campaign.

The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of cost of product sales in the consolidated statements of operations and comprehensive loss. The determination of whether inventory costs will be realizable requires the use of estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required. Additionally, the Company’s product is subject to strict quality control and monitoring that it performs throughout the manufacturing process. In the event that certain batches or units of product no longer meet quality specifications, the Company will record a charge to cost of product sales to write-down any unmarketable inventory to its estimated net realizable value. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value.

Debt

The Company performs an assessment of all embedded features of a debt instrument to determine if (1) such features should be bifurcated and separately accounted for, and (2) if bifurcation requirements are met, whether such features should be classified and accounted for as equity or liability instruments. If the embedded feature meets the requirements to be bifurcated and accounted for as a liability, the fair value of the embedded feature is measured initially, included as a liability on the consolidated balance sheet, and re-measured to fair value at each reporting period. Any changes in fair value are recorded in the consolidated statement of operations. The Company monitors, on an ongoing basis, whether events or circumstances could give rise to a change in the classification of embedded features.

Revenue Recognition

The Company generates revenues primarily from sales of Auryxia, see Note 3, and from its collaborations with MTPC and Otsuka, see Note 4. The Company recognizes revenue in accordance with ASC 606, which applies to all contracts with customers, except for contracts that are within the scope of other standards. Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps:

(i)

identify the contract(s) with a customer;

(ii)

identify the performance obligations in the contract;

(iii)

determine the transaction price;

(iv)

allocate the transaction price to the performance obligations in the contract; and

(v)

recognize revenue when (or as) the entity satisfies a performance obligation.

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company does not include a financing component to its estimated transaction price at contract inception unless it estimates that certain performance obligations will not be satisfied within one year. Additionally, the Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.

Product Revenue, Net

The Company sells Auryxia in the United States, or U.S., primarily to wholesale distributors as well as certain specialty pharmacy providers, collectively, Customers. These Customers resell the Company’s product to health care providers and patients. In addition to distribution agreements with Customers, the Company enters into arrangements with health care providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s product.

The Company recognizes revenue on product sales when the Customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the Customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that it would have recognized is one year or less.

Reserves for Variable Consideration

Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, chargebacks, rebates, co-pay assistance and other allowances that are offered within contracts between the Company and its Customers, health care providers, payors and other indirect customers relating to the Company’s sales of its products. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount will be credited to the Customer) or as a current liability (if the amount is payable to a Customer or a party other than a Customer). When appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted in accordance with the expected value method in ASC 606 for relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts.

The amount of variable consideration that is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.

Trade Discounts and Allowances: The Company generally provides Customers with discounts that include incentive fees that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, the Company compensates (through trade discounts and allowances) its Customers for sales order management, data, and distribution services. However, the Company has determined such services received to date are not distinct from the Company’s sale of products to the Customer and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations and comprehensive loss through December 31, 2019. The Company records a corresponding reduction of accounts receivable (if the trade discount and/or allowance will be credited to the Customer) or an increase in accrued expense (if the trade discount and/or allowance is payable to a Customer) on the consolidated balance sheets.

Product Returns: Consistent with industry practice, the Company generally offers Customers a limited right of return which allows for the product to be returned when the product expiry is within an allowable window. This right of return lapses once the product is provided to a patient. The Company estimates the amount of its product sales that may be returned by its Customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return reserve using available industry data and its own historical sales information, including its visibility into the inventory remaining in the distribution channel.

Provider Chargebacks and Discounts: Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider by Customers, and the Company generally issues credits for such amounts within a few weeks of the Customer’s resale of the product. Reserves for chargebacks consist of credits that the Company expects to issue for units that remain in the distribution channel at each reporting period end that the Company expects will be sold to qualified healthcare providers, and chargebacks that Customers have claimed but for which the Company has not yet issued a credit.

Commercial and Medicare Part D Rebates: The Company contracts with various commercial payor organizations, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates the rebates for commercial and Medicare Part D payors based upon (i) its contracts with the payors and (ii) information obtained from its Customers and other third parties regarding the payor mix for Auryxia. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability.

Other Government Rebates: The Company is subject to discount obligations under state Medicaid programs and other government programs. The Company estimates its Medicaid and other government programs rebates based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses and other current liabilities on the consolidated balance sheets. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel at the end of each reporting period.

Other Incentives: Other incentives that the Company offers include voluntary patient assistance programs such as the Company’s co-pay assistance program, which are intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on actual claims processed during a given period, as well as historical utilization data to estimate the amount the Company expects to receive associated with product that has been recognized as revenue, but remains in in the distribution channel at the end of each reporting period.

Collaboration Revenues

The Company enters into out-license and collaboration agreements which are within the scope of ASC 606, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; development, regulatory, and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products. Each of these payments may result in license, collaboration and other revenue, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company implements the five-step model noted above. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine whether the individual promises should be accounted for as separate performance obligations or as a combined performance obligation, and to determine the stand-alone selling price for each performance obligation identified in the contract. A deliverable represents a separate performance obligation if both of the following criteria are met: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and (ii) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates, and probabilities of technical and regulatory success. With regard to the MTPC and Otsuka collaboration agreements, the Company recognizes revenue related to amounts allocated to the identified performance obligation on a proportional performance basis as the underlying services are performed.

Licenses of Intellectual Property

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an out-license and collaboration arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

Milestone Payments

At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to assess the milestone as probable of being achieved. There is considerable judgment involved in determining whether a milestone is probable of being reached at each specific reporting period. Milestone payments that are not within the control of the Company or the customer, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenues as, or when, the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenue in the period of adjustment.

Manufacturing Supply Services

Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the licensee exercises these options, any additional payments are recorded in license, collaboration and other revenues when the licensee obtains control of the goods, which is upon delivery.

Royalties

The Company will recognize sales-based royalties, including milestone payments based on the level of sales, at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company receives royalty payments from JT and Torii, based on net sales of Riona in Japan.

Collaborative Arrangements

The Company records the elements of its collaboration agreements that represent joint operating activities in accordance with ASC Topic 808, Collaborative Arrangements (ASC 808). Accordingly, the elements of the collaboration agreements that represent activities in which both parties are active participants and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the activities are recorded as collaborative arrangements. The Company considers the guidance in ASC 606-10-15, Revenue from Contracts with Customers – Scope and Scope Exceptions, in determining the appropriate treatment for the transactions between the Company and its collaborative partner and the transactions between the Company and third parties. Generally, the classification of transactions under the collaborative arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. Therefore, the Company recognizes its allocation of the shared costs incurred with respect to the jointly conducted medical affairs and commercialization and non-promotional activities under the U.S. collaboration with Otsuka as a component of the related expense in the period incurred. During the years ended December 31, 2019 and 2018, the Company incurred approximately $1.8 million and $1.2 million, respectively, of costs related to the cost-sharing provisions of the Otsuka U.S. Agreement, as defined below in Note 4, of which approximately $0.7 million and $0.5 million are reimbursable by Otsuka and recorded as a reduction to research and development expense during the years ended December 31, 2019 and 2018, respectively. During the years ended December 31, 2019 and 2018, Otsuka incurred approximately $1.9 million and $1.1 million, respectively, of costs related to the cost-sharing provisions of the Otsuka U.S. Agreement, of which approximately $1.0 million and $0.5 million are reimbursable by the Company and recorded as an increase to research and development expense during the years ended December 31, 2019 and 2018, respectively. To the extent product revenue is generated from the collaboration, the Company recognizes its share of the net sales on a gross basis if it is deemed to be the principal in the transactions with customers, or on a net basis if it is instead deemed to be the agent in the transactions with customers, consistent with the guidance in ASC 606.

Business Combinations

The Company accounts for the acquisition of a business in accordance with ASC Topic 805, Business Combinations, or ASC 805. Amounts paid for each acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. The Company determines the fair value of acquired intangible assets based on detailed valuations that use certain information and assumptions provided by management, which is considered management’s best estimate of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired to goodwill.

Under ASC 805, transaction costs are not included as a component of consideration transferred and are expensed as incurred. Additionally, in accordance with ASC 805, a transaction entered into by or on behalf of the acquirer or primarily for the benefit of the acquirer or the combined entity, rather than primarily for the benefit of the acquiree (before the combination), is treated as separate transaction.

Intangible Assets

The Company maintains a definite-lived intangible asset related to developed product rights for Auryxia, which was acquired on December 12, 2018 as part of the Merger.

Intangible assets are initially recorded at fair value and stated net of accumulated amortization and impairments. The Company amortizes its intangible assets that have finite lives using either the straight-line method, or if reliably determinable, based on the pattern in which the economic benefit of the asset is expected to be utilized. Amortization for the Company’s intangible asset is recorded over its estimated useful life of nine years.

The Company reviews intangible assets subject to amortization to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. If an impairment indicator exists, the Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows of the intangible asset and asset group to its carrying value on the consolidated balance sheet. If the carrying value of the intangible asset exceeds the undiscounted cash flows used in the recoverability test, the Company will write the carrying value down to the fair value in the period identified. The Company calculates the fair value of intangible assets as the present value of estimated future cash flows expected to be generated from the intangible asset using a risk-adjusted discount rate. In determining estimated future cash flows associated with its intangible assets, the Company uses market participant assumptions pursuant to ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820).

Goodwill

The Company allocates any excess purchase price over the fair value of the net tangible and intangible assets acquired in a business combination to goodwill. Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist.

The Company compares the fair value of its reporting unit to its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of its reporting unit, the Company would record an impairment loss equal to the difference. As described above, the Company operates in one operating segment which the Company considers to be the only reporting unit.

Fair Value of Financial Instruments

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC 820 establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available.

Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments, and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below:

•

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•

Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active, or for which all significant inputs are observable, either directly or indirectly.

•

Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Items measured at fair value on a recurring basis include available for sale securities and derivative liabilities (see Note 7). The carrying amounts of prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to their short-term maturities.

Items measured at fair value on a nonrecurring basis include property and equipment, intangible assets and goodwill. The Company remeasures the fair value of these assets upon the occurrence of certain events. There were no remeasurements to property and equipment for the year ended December 31, 2019, other than the write-off of certain leasehold improvements in connection with the sublease of the Boston office. There were no impairments to assets measured using Level 3 inputs during the years ended December 31, 2019 or 2018, respectively.

The Company’s other financial instruments mainly consists of debt (see Note 11). The carrying amount for the Company’s Loan Agreement with Pharmakon approximates fair value because the interest rate is variable and reflects current market rates.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses are comprised of costs incurred in providing research and development activities, including salaries and benefits, facilities costs, overhead costs, contract research and development services, and other outside costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

External research and development expenses associated with the Company’s programs include clinical trial site costs, research compounds and clinical manufacturing costs, costs incurred for consultants and other outside services, such as data management and statistical analysis support, and materials and supplies used in support of the clinical and preclinical programs. Internal costs of the Company’s clinical program include salaries, benefits, stock-based compensation, and an allocation of the Company’s facility costs. When third-party service providers’ billing terms do not coincide with the Company’s period-end, the Company is required to make estimates of its obligations to those third parties, including clinical trial and pharmaceutical development costs, contractual services costs and costs for supply of its drug candidates, incurred in a given accounting period and record accruals at the end of the period. The Company bases its estimates on its knowledge of the research and development programs, services performed for the period, past history for related activities and the expected duration of the third-party service contract, where applicable.

Advertising Expenses

The costs of advertising are expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2019 and 2018, advertising expenses totaled $6.0 million and $0.5 million, respectively. Advertising expenses relate to advertising for Auryxia. The Company incurred advertising expenses throughout the entire fiscal year 2019 compared to the period from December 12, 2018 through December 31, 2018 in fiscal year 2018. The Company did not incur any advertising expenses for the year ended December 31, 2017.

Income Taxes

Income taxes are recorded in accordance with FASB Topic 740, Income Taxes, or ASC 740, which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. All deferred taxes as of December 31, 2019 and 2018 are classified as noncurrent within the income tax provision (see Note 14).

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2019 and 2018, the Company does not have any significant uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

Stock-Based Compensation

The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation, or ASC 718. ASC 718 requires all stock-based payments to employees and non-employees, including grants of stock options, restricted stock, restricted stock units, or RSUs, and modifications to existing stock awards, to be recognized in the statements of operations and comprehensive loss based on their fair values. The Company’s stock-based awards are comprised of stock options and RSUs. The Company estimates the fair value of options granted using the Black-Scholes option pricing model. The Company uses a blend of its stock price and the quoted market price of comparable public companies to determine the fair value of restricted stock awards and common stock awards.

The Black-Scholes option pricing model requires the input of certain subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate and (d) expected dividends. Due to the lack of company-specific historical and implied volatility data for trading the Company’s stock in the public market, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. During 2017, the Company began to estimate its volatility by using a blend of its stock price history for the length of time it has market data for its stock and the historical volatility of similar public companies for the expected term of each grant. The Company is a commercial-stage biopharmaceutical company and the representative group of companies has certain similar characteristics to the Company. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population. For options granted to non-employees, the Company utilizes the contractual term of the arrangement as the basis for the expected term assumption. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock, which is similar to the Company’s peer group.

The Company’s stock-based awards are subject to either service- or performance-based vesting conditions. Compensation expense related to awards to employees and non-employees with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term, and is adjusted for pre-vesting forfeitures in the period in which the forfeitures occur. Compensation expense related to awards to employees and non-employees with performance-based vesting conditions is recognized based on the grant date fair value over the requisite service period using the accelerated attribution method to the extent achievement of the performance condition is probable.

For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense if, and to the extent that, the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable, it recognizes expense from the date it reaches this conclusion through the estimated vesting date.

Net Loss per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting weighted-average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, preferred stock, stock options, warrants, restricted stock and RSUs are considered to be common stock equivalents, but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share were the same for all periods presented. Diluted net income per share is calculated by dividing the net income by the weighted-average common shares outstanding for the period, including any dilutive effect from outstanding options, warrants, restricted stock and RSUs using the treasury stock method.

Product Revenue, Net

12 Months Ended

Dec. 31, 2019

Revenue From Contract With Customer [Abstract]

Product Revenue, Net

3. Product Revenue, Net

To date, the Company’s only source of product revenue has been from the U.S. sales of Auryxia, which it began recording on December 12, 2018 following the consummation of the Merger. Total net product revenue was $111.1 million for the year ended December 31, 2019 and $6.8 million for the period from December 12, 2018 to December 31, 2018. The following table summarizes activity in each of the product revenue allowance and reserve categories for the period from December 12, 2018 to December 31, 2018 and for the year ended December 31, 2019 (in thousands):

	Chargebacks and Discounts			Rebates, Fees and other Deductions			Returns			Total
Balance at December 12, 2018	$	466		$	21,247		$	418		$	22,131
Provisions related to sales		415			3,869			(58	)		4,226
Credits/payments made relating to sales		(365	)		(2,255	)		—			(2,620	)
Balance at December 31, 2018		516			22,861			360			23,737
Current provisions related to sales in current year		7,822			110,866			2,008			120,696
Adjustments related to prior year sales		—			1,149			—			1,149
Credits/payments made		(7,600	)		(104,324	)		(2,115	)		(114,039	)
Balance at December 31, 2019	$	738		$	30,552		$	253		$	31,543

Chargebacks, discounts and returns are recorded as a direct reduction of revenue on the consolidated statement of operations with a corresponding reduction to accounts receivable on the consolidated balance sheets. Rebates, distribution-related fees, and other sales-related deductions are recorded as a reduction in revenue on the consolidated statement of operations with a corresponding increase to accrued liabilities or accounts payable on the consolidated balance sheets.

Accounts receivable, net related to product sales was approximately $23.0 million and $15.1 million as of December 31, 2019 and 2018, respectively.

License, Collaboration and Other Significant Agreements

12 Months Ended

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

License, Collaboration and Other Significant Agreements

4. License, Collaboration and Other Significant Agreements

During the years ended December 31, 2019, 2018 and 2017, the Company recognized the following revenues from its license, collaboration and other significant agreements and had the following deferred revenue balances as of December 31, 2019:

	For the Year Ended December 31,
	2019		2018		2017
License, Collaboration and Other Revenue:	(in thousands)
MTPC Agreement	$	10,000	$	9,281	$	42,918
Otsuka U.S. Agreement		131,314		103,870		85,971
Otsuka International Agreement		75,614		87,320		52,307
Total Proportional Performance Revenue	$	216,928	$	200,471	$	181,196
JT and Torii		5,882		112		—
MTPC Other Revenue		1,072		335		31
Total License, Collaboration and Other Revenue	$	223,882	$	200,918	$	181,227

	December 31, 2019
	Short-Term		Long-Term		Total
Deferred Revenue:	(in thousands)
Otsuka U.S. Agreement	$	23,530	$	20,641	$	44,171
Otsuka International Agreement		16,300		7,800		24,100
Vifor Agreement		—		4,679		4,679
Total	$	39,830	$	33,120	$	72,950

The following table presents changes in the Company’s contract assets and liabilities during the years ended December 31, 2019 and 2018 (in thousands):

	Balance at Beginning of Period		Additions		Deductions			Balance at End of Period
Twelve Months Ended December 31, 2019
Contract assets:
Other current assets	$	—	$	10,000	$	(10,000	)	$	—
Accounts receivable⁽¹⁾	$	1,587	$	172,614	$	(158,379	)	$	15,822
Contract liabilities:
Deferred revenue	$	112,689	$	167,189	$	(206,928	)	$	72,950
Accounts payable	$	13,492	$	—	$	(13,492	)	$	—

Twelve Months Ended December 31, 2018
Contract assets:
Other current assets	$	—	$	531	$	(531	)	$	—
Accounts receivable⁽¹⁾	$	34,186	$	146,267	$	(178,866	)	$	1,587
Contract liabilities:
Deferred revenue	$	179,624	$	133,537	$	(200,472	)	$	112,689
Accounts payable	$	—	$	17,919	$	(4,427	)	$	13,492

⁽¹⁾

Excludes accounts receivable from other services related to clinical and regulatory activities performed by the Company on behalf of MTPC that are not included in the performance obligations identified under the MTPC Agreement as of December 31, 2019 and 2018. Also excludes accounts receivable related to amounts due to the Company from product sales which are included in the accompanying consolidated balance sheets as of December 31, 2019 and 2018.

During the years ended December 31, 2019, 2018 and 2017, the Company recognized the following revenues as a result of changes in the contract asset and contract liability balances in the respective periods (in thousands):

	For the Year Ended December 31,
Revenue Recognized in the Period from:	2019		2018		2017
Amounts included in deferred revenue at the beginning of the period	$	80,634	$	137,726	$	124,454
Performance obligations satisfied in previous periods	$	45,592	$	6,659	$	275

Mitsubishi Tanabe Pharma Corporation Collaboration Agreement

Summary of Agreement

On December 11, 2015, the Company and MTPC entered into a collaboration agreement, or the MTPC Agreement, providing MTPC with exclusive development and commercialization rights to vadadustat in Japan and certain other Asian countries, collectively, the MTPC Territory. In addition, the Company will supply vadadustat for both clinical and commercial use in the MTPC Territory, subject to MTPC’s option to manufacture commercial drug product in the MTPC Territory.

The Company and MTPC agreed that, instead of including Japanese patients in the Company’s global Phase 3 program for vadadustat, MTPC would be the sponsor of a Phase 3 program for vadadustat in Japan. MTPC reported top-line data for the two Phase 3 pivotal trials and data from the two supportive Phase 3 studies in March 2019 and 52-week data for the two Phase 3 pivotal trials in November 2019. MTPC is responsible for the costs of the Phase 3 program in Japan and other studies required in Japan, and will make no funding payments for the global Phase 3 program. In July 2019, MTPC submitted a Japanese New Drug Application, or JNDA, to the Ministry of Health, Labor and Welfare in Japan for manufacturing and marketing approval of vadadustat, as a treatment for anemia due to CKD, which triggered a $10.0 million regulatory milestone payment to the Company.

MTPC has sole responsibility for the commercialization of vadadustat in the MTPC Territory as well as for Medical Affairs (as defined in the MTPC Agreement) in the MTPC Territory. Akebia is responsible for manufacturing and supplying vadadustat for clinical use in the MTPC Territory.

The Company and MTPC have established a joint steering committee pursuant to the MTPC Agreement to oversee development and commercialization of vadadustat in the MTPC Territory, including approval of any development or commercialization plans. Unless earlier terminated, the MTPC Agreement will continue in effect on a country-by-country basis until the later of the following: expiration of the last-to-expire patent covering vadadustat in such country in the MTPC Territory; expiration of marketing or regulatory exclusivity in such country in the MTPC Territory; or ten years after the first commercial sale of vadadustat in such country in the MTPC Territory. MTPC may terminate the MTPC Agreement upon twelve months’ notice at any time after the second anniversary of the effective date of the MTPC Agreement. Either party may terminate the MTPC Agreement upon the material breach of the other party that is not cured within a specified time period or upon the insolvency of the other party.

MTPC is required to make certain milestone payments to the Company aggregating up to approximately $225.0 million upon the achievement of specified development, regulatory and commercial events. More specifically, the Company received $10.0 million in development milestone payments and is eligible to receive up to $40.0 million in regulatory milestone payments, of which the Company received $10.0 million in relation to the JNDA filing in the third quarter of 2019 and is eligible to receive an additional $15.0 million upon regulatory approval of vadadustat in Japan, and up to $175.0 million in commercial milestone payments associated with aggregate sales of all products. In consideration for the exclusive license and other rights contained in the MTPC Agreement, MTPC also made a $20.0 million upfront payment as well as a payment of $20.5 million for Phase 2 studies in Japanese patients completed by the Company and reimbursed by MTPC. Additionally, if vadadustat is commercialized, the Company would be entitled to receive tiered double-digit royalty payments of up to 20% on sales of vadadustat in the MTPC Territory. Royalty payments are subject to certain reductions, including upon the introduction of competitive products in certain instances. Royalties are due on a country-by-country basis from the date of first commercial sale of a licensed product in a country until the last to occur of: (i) the expiration of the last to expire valid claim within the intellectual property covering the licensed product, (ii) the expiration of marketing or regulatory exclusivity in such country, or (iii) the tenth anniversary of the first commercial sale of such licensed product in such country. Due to the uncertainty of pharmaceutical development and the high historical failure rates associated with drug development, although the Company has received $10.0 million in development milestones and a $10.0 million regulatory milestone, for which payment was received in the third quarter of 2019, no additional milestone or royalty payments may ever be received from MTPC.

In September 2017, the Company provided MTPC with an option to use data from the Company’s global Phase 3 vadadustat program to obtain regulatory approval for vadadustat in Japan. If exercised, MTPC would make payments to the Company of up to $25.0 million, which is in addition to the milestone payments described above.

Revenue Recognition

The Company evaluated the elements of the MTPC Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, MTPC, is a customer. The Company’s arrangement with MTPC contains the following material promises under the contract at inception: (i) license under certain of the Company’s intellectual property to develop and commercialize vadadustat (the License Deliverable) in the MTPC Territory, (ii) clinical supply of vadadustat (the Clinical Supply Deliverable), (iii) knowledge transfer, (iv) Phase 2 dosing study research services (the Research Deliverable), and (v) rights to future know-how.

The Company has identified two performance obligations in connection with its material promises under the MTPC Agreement as follows: (i) License, Research and Clinical Supply Performance Obligation and (ii) Rights to Future Know-How Performance Obligation. Factors considered in making the assessment of which material promises will be accounted for as separate performance obligations included, among other things, the capabilities of the collaboration partner, whether any other vendor sells the item separately, whether the good or service is highly interdependent or highly interrelated to the other elements in the arrangement, and whether there are other vendors that can provide the items. Additionally, the MTPC Agreement does not include a general right of return.

The Company allocates the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price. The Company developed a best estimate of the standalone selling price for the Rights to Future Know-How Performance Obligation primarily based on the likelihood that additional intellectual property covered by the license conveyed will be developed during the term of the arrangement. The Company did not develop a best estimate of standalone selling price for the License, Research and Clinical Supply Performance Obligation because the estimate of standalone selling price associated with the Rights to Future Know-How Performance Obligation was determined to be immaterial. The Company has concluded that a change in the key assumptions used to determine the best estimate of standalone selling price for each performance obligation would not have a significant impact on the allocation of arrangement consideration. The deliverables associated with the License, Research and Clinical Supply Performance Obligation were satisfied as of June 30, 2018.

The transaction price at inception was comprised of: (i) the up-front payment, (ii) the estimated cost for the Phase 2 studies, (iii) a non-substantive milestone associated with the first patient enrolled in the NDD-CKD Phase 3 study, and (iv) the cost of all clinical supply provided to MTPC for the Phase 3 studies. No other development and no regulatory milestones were included in the transaction price at inception, as all other milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. The total aggregate amount of development milestones is $10.0 million and the total aggregate amount of the regulatory milestones is up to $40.0 million. The total aggregate amount of sales milestones is up to $175.0 million. Any consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to MTPC and therefore have also been excluded from the transaction price. The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

As of December 31, 2019, the transaction price is comprised of: (i) the up-front payment of $20.0 million, (ii) the cost for the Phase 2 studies of $20.5 million, (iii) the cost of all clinical supply provided to MTPC for the Phase 3 studies, (iv) $10.0 million in development milestones received, comprised of a $6.0 million and a $4.0 million development milestone, and (v) the $10.0 million regulatory milestone relating to the JNDA filing. As of December 31, 2019, all development milestones have been achieved and, other than the $10.0 million regulatory milestone received by the Company related to the filing of the JNDA that was achieved, no other regulatory milestones have been assessed as probable of being achieved and as a result have been fully constrained. Revenue for the License, Research and Clinical Supply Performance Obligation for the MTPC Agreement is being recognized using a proportional performance method. Accordingly, the Company recognized the $10.0 million regulatory milestone for the filing of the JNDA as revenue during the year ended December 31, 2019 as the regulatory milestone was both deemed probable of being achieved and the required performance obligations had been satisfied as of December 31, 2019. The Company recognized approximately $9.3 million and $42.9 million during the years ended December 31, 2018 and 2017, respectively. The revenue is classified as collaboration revenue in the accompanying consolidated statements of operations. As of December 31, 2019, there is no deferred revenue, no accounts receivable, and no contract assets. There were no asset or liability balances classified as long-term in the consolidated balance sheet as of December 31, 2019.

U.S. Collaboration and License Agreement with Otsuka Pharmaceutical Co. Ltd.

Summary of Agreement

On December 18, 2016, the Company entered into a collaboration and license agreement with Otsuka, or the Otsuka U.S. Agreement. The collaboration is focused on the development and commercialization of vadadustat in the United States. Under the terms of the Otsuka U.S. Agreement, the Company is responsible for leading the development of vadadustat, including the ongoing Phase 3 development program. The Company and Otsuka will co-commercialize vadadustat in the United States, subject to the approval of vadadustat by the FDA.

Under the terms of the Otsuka U.S. Agreement, the Company granted to Otsuka a co-exclusive, non-sublicensable license under certain intellectual property controlled by the Company solely to perform medical affairs activities and to conduct non-promotional and commercialization activities related to vadadustat in accordance with the associated plans. The co-exclusive license relates to activities that will be jointly conducted by the Company and Otsuka pursuant to the terms of the Otsuka U.S. Agreement. Additionally, the parties agreed not to promote, market or sell any competing product in the territory covered by the agreement.

The Company is responsible for performing all activities related to the development of vadadustat as outlined in the current global development plan. The current global development plan encompasses all activities with respect to the ongoing PRO₂TECT and INNO₂VATE clinical programs through the filing for marketing approval, as well as certain other studies. Under the Otsuka U.S. Agreement, the Company controls and retains final decision‑making authority with respect to certain matters. The Company’s obligations related to the conduct of the current global development plan include the associated manufacturing and supply services for vadadustat.

Under the Otsuka U.S. Agreement, the parties jointly conduct, and have equal responsibility for, all medical affairs, commercialization and non-promotional activities pursuant to underlying plans as agreed to by the parties. If approved by the FDA, the Company plans to provide vadadustat to Otsuka for commercialization pursuant to a separate supply agreement to be negotiated.

The activities under the Otsuka U.S. Agreement are governed by a joint steering committee, or JSC, formed by an equal number of representatives from the Company and Otsuka. The JSC coordinates and monitors the parties’ activities under the collaboration. Among other responsibilities, the JSC manages the overall strategic alignment between the parties, oversees the current global development plan and reviews other detailed plans setting forth the parties’ activities under the arrangement, including the medical affairs plan and commercialization and non-promotional activities plan. Additionally, the parties established a joint development committee, or JDC, which is comprised of an equal number of representatives from the Company and Otsuka. Among other responsibilities, the JDC shares information related to, and reviews and discusses activities and progress under, the current global development plan and any other development that may be conducted pursuant to the collaboration. The Company and Otsuka also established a joint manufacturing committee, or JMC, which is comprised of an equal number of representatives from each of the parties. Among other responsibilities, the JMC oversees the manufacturing plan and related manufacturing activities. In support of the potential commercialization of vadadustat, the parties established a joint commercialization committee, or JCC, which is comprised of an equal number of representatives from the Company and Otsuka. Among other responsibilities, the JCC oversees the activities and progress under the commercialization and non-promotional activities plan and all other sales and marketing activities. The Company has retained final decision‑making authority with respect to certain matters, including U.S. pricing strategy and certain other key commercialization matters.

Under the terms of the Otsuka U.S. Agreement, the Company received a $125.0 million up-front, non-refundable, non-creditable cash payment in December 2016. In March 2017, the Company received a payment of approximately $33.8 million, which represented reimbursement for Otsuka’s share of costs previously incurred by the Company in implementing the current global development plan through December 31, 2016. Commencing in the third quarter of 2017, whereupon the Company had incurred a specified amount of incremental costs, Otsuka began to contribute, as required by the Otsuka U.S. Agreement, a percentage of the remaining costs incurred under the current global development plan. The Company estimates that Otsuka’s funding of the current global development plan costs subsequent to December 31, 2016 will total $266.8 million or more, depending on the actual costs incurred toward the current global development plan. The costs associated with the performance of any development activities in addition to those outlined in the current global development plan will be subject to a cost sharing or reimbursement mechanism as set forth in the Otsuka U.S. Agreement or to be determined by the parties. Costs incurred with respect to medical affairs and commercialization and non-promotional activities will generally be shared equally by the parties. In addition, due to the costs incurred in completing the activities under the current global development plan exceeding a certain threshold in the second quarter of 2019, the Company elected to require Otsuka to increase the aggregate percentage of current global development costs it funds under the Otsuka U.S. Agreement and the Otsuka International Agreement, as defined below, from 52.5% to 80%, or the Otsuka Funding Option. The Company estimates the additional funding as a result of exercising the Otsuka Funding Option, or the Additional Funding, to total approximately $104.2 million or more, depending on the actual costs incurred toward the current global development plan. The Additional Funding is fully creditable against future payments due to the Company under the arrangement, provided that future payments due to the Company may not be reduced by more than 50% in any calendar year and any remaining creditable amount above 50% in any calendar year will be applied to subsequent future payments until fully credited. As of December 31, 2019, the Additional Funding was $43.7 million.

In addition, Otsuka is required to make certain milestone payments to the Company upon the achievement of specified development, regulatory and commercial events. More specifically, the Company is eligible to receive up to $125.0 million in development milestone payments and up to $65.0 million in regulatory milestone payments for the first product to achieve the associated event. Moreover, the Company is eligible for up to $575.0 million in commercial milestone payments associated with aggregate sales of licensed products, subject to reduction as a result of the Company’s exercise of the Otsuka Funding Option, as described above, the Additional Funding for which, as of December 31, 2019, totaled $43.7 million. Due to the uncertainty of pharmaceutical development and the high historical failure rates associated therewith, no milestone payments may ever be received from Otsuka.

Under the Otsuka U.S. Agreement, the Company and Otsuka share the costs of developing and commercializing vadadustat in the United States and the profits from the sales of vadadustat after approval by the FDA. In connection with the profit share calculation, net sales include gross sales to third-party customers net of discounts, rebates, chargebacks, taxes, freight and insurance charges and other applicable deductions. Shared costs generally include costs attributable or reasonably allocable to the manufacture of vadadustat for commercialization purposes and the performance of medical affairs activities, non-promotional activities and commercialization activities.

Unless earlier terminated, the Otsuka U.S. Agreement will expire in the United States on a product-by-product basis on the date that one or more generic versions of vadadustat first achieves 90% market penetration. Either party may terminate the Otsuka U.S. Agreement in its entirety upon an uncured breach or insolvency on the part of the other party. Otsuka may terminate the Otsuka U.S. Agreement in its entirety upon 12 months’ prior written notice at any time after the release of the first topline data from the global Phase 3 development program for vadadustat. In the event of termination of the Otsuka U.S. Agreement, all rights and licensees granted to Otsuka under the Otsuka U.S. Agreement will automatically terminate and the licenses granted to the Company will become freely sublicensable. In addition, the upfront payment, all development costs and milestone payments received by the Company prior to such termination will not be refunded to Otsuka.

Revenue Recognition

The Company evaluated the elements of the Otsuka U.S. Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, Otsuka, is a customer. The Company’s arrangement with Otsuka contains the following material promises under the contract at inception: (i) license under certain of the Company’s intellectual property to develop, perform medical affairs activities with respect to and conduct non-promotional and commercialization activities related to vadadustat and products containing or comprising vadadustat (the License Deliverable), (ii) development services to be performed pursuant to the current global development plan (the Development Services Deliverable), (iii) rights to future intellectual property (the Future IP Deliverable), and (iv) joint committee services (the Committee Deliverable).

The Company has identified three performance obligations in connection with its obligations under the Otsuka U.S. Agreement. Factors considered in making the assessment of which material promises will be accounted for as separate performance obligations included, among other things, the capabilities of the collaboration partner, whether any other vendor sells the item separately, whether the good or service is highly interdependent or highly interrelated to the other elements in the arrangement, and whether there are other vendors that can provide the items. Additionally, the Otsuka U.S. Agreement does not include a general right of return. The three performance obligations identified in connection with the Company’s obligations under the Otsuka U.S. Agreement are as follows:

(i)

License and Development Services Combined (License Performance Obligation)

The License Deliverable is not distinct from the Development Services Deliverable, due to the limitations inherent in the license conveyed. More specifically, the license conveyed to Otsuka does not provide Otsuka with the right to manufacture vadadustat and products containing or comprising vadadustat. However, the manufacturing and supply services that are conducted as part of the services to be performed pursuant to the current global development plan are necessary for Otsuka to fully exploit the associated license for its intended purpose. The value of the rights provided through the license conveyed will be realized when the underlying products covered by the intellectual property progress through the development cycle, receive regulatory approval and are commercialized. Products containing or comprising vadadustat cannot be commercialized until the development services under the current global development plan are completed. Accordingly, Otsuka must obtain the manufacturing and supply of the associated products that are included within the development services to be performed pursuant to the current global development plan from the Company in order to derive benefit from the license, which significantly limits the ability for Otsuka to utilize the License Deliverable for its intended purpose in a way that generates economic benefits.

(ii)

Rights to Future Intellectual Property (Future IP Performance Obligation)

The License and Development Services deliverables combined are distinct from the Future IP Deliverable because Otsuka can obtain the value of the license using the clinical trial materials implicit in the development services without the receipt of any other intellectual property that may be discovered or developed in the future. The Future IP Deliverable is distinct from the Committee Deliverable because the joint committee services have no bearing on the value to be derived from the rights to potential future intellectual property. As a result, the Future IP Deliverable qualifies as a separate performance obligation.

(iii)

Joint Committee Services (Committee Performance Obligation)

The License and Development Services deliverables combined are distinct from the Committee Deliverable because Otsuka can obtain the value of the license using the clinical trial materials implicit in the development services without the joint committee services. The Committee Deliverable also is distinct from the rights to Future IP Deliverable because the joint committee services have no bearing on the value to be derived from the rights to potential future intellectual property. As a result, the Committee Deliverable qualifies as a separate performance obligation.

The Company allocates the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price. The Company developed a best estimate of standalone selling price for the Committee Performance Obligation after considering the nature of the services to be performed and estimates of the associated effort and rates applicable to such services that would be expected to be realized under similar contracts. The Company developed a best estimate of standalone selling price for the Future IP Performance Obligation primarily based on the likelihood that additional intellectual property covered by the license conveyed will be developed during the term of the arrangement. The Company did not develop a best estimate of standalone selling price for the License Performance Obligation due to the following: (i) the best estimates of standalone selling price associated with the Future IP Performance Obligation was determined to be immaterial and (ii) the period of performance and pattern of recognition for the License Performance Obligation and the Committee Performance Obligation was determined to be similar. The Company has concluded that a change in the key assumptions used to determine the best estimate of standalone selling price for each performance obligation would not have a significant impact on the allocation of arrangement consideration.

The transaction price at inception was comprised of: (i) the up-front payment, (ii) the cost share payment with respect to amounts incurred by the Company through December 31, 2016, and (iii) an estimate of the cost share payments to be received with respect to amounts incurred by the Company subsequent to December 31, 2016. No development or regulatory milestones were included in the transaction price at inception, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. Any consideration related to sales-based milestones will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to Otsuka and therefore have also been excluded from the transaction price.

The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The Company determined that under ASC 606, the contract was modified in the second quarter of 2019 when the Otsuka Funding Option became effective and the Company became eligible to receive the Additional Funding amount. In connection with the modification, the Company adjusted the transaction price to include the Additional Funding amount as additional variable consideration. The Company constrains the variable consideration to an amount for which a significant revenue reversal is not probable.

No amounts were allocated to the Future IP Performance Obligation because the associated best estimate of standalone selling price was determined to be immaterial. Due to the similar performance period and recognition pattern between the License Performance Obligation and the Committee Performance Obligation, the transaction price has been allocated to the License Performance Obligation and the Committee Performance Obligation on a combined basis. Accordingly, the Company will recognize revenue related to the allocable arrangement consideration on a proportional performance basis as the underlying development services are performed pursuant to the current global development plan which is commensurate with the period and consistent with the pattern over which the Company’s obligations are satisfied for both the License Performance Obligation and the Committee Performance Obligation. Effectively, the Company has treated the arrangement as if the License Performance Obligation and the Committee Performance Obligation are a single performance obligation.

As of December 31, 2019, the transaction price totaling $425.6 million is comprised of: (i) the up-front payment of $125.0 million, (ii) the cost share payment with respect to amounts incurred by the Company through December 31, 2016 of $33.8 million, (iii) the estimate of the cost base share payments to be received of approximately $209.1 million with respect to amounts incurred by the Company subsequent to December 31, 2016, and (iv) the estimate of the Additional Funding of approximately $57.7 million related to incremental cost share payments under the Otsuka Funding Option described above. As of December 31, 2019, no development or regulatory milestones have been assessed as probable of being reached and thus have been fully constrained.

During the years ended December 31, 2019, 2018 and 2017, the Company recognized revenue totaling approximately $131.3 million, $103.9 million and $86.0 million, respectively, with respect to the Otsuka U.S. Agreement. The revenue is classified as collaboration revenue in the accompanying consolidated statements of operations. As of December 31, 2019, there is approximately $44.2 million of deferred revenue related to the Otsuka U.S. Agreement of which $23.6 million is classified as current and $20.6 million is classified as long-term in the accompanying consolidated balance sheet based on the performance period of the underlying obligations. Additionally, as of December 31, 2019, there is approximately $8.9 million in accounts receivable in the accompanying consolidated balance sheet. As of December 31, 2018, there was approximately $7.2 million in contract liabilities (included in accounts payable) in the consolidated balance sheet.

The Company determined that the medical affairs, commercialization and non-promotional activities elements of the Otsuka U.S. Agreement represent joint operating activities in which both parties are active participants and of which both parties are exposed to significant risks and rewards that are dependent on the success of the activities. Accordingly, the Company is accounting for the joint medical affairs, commercialization and non-promotional activities in accordance with ASC No. 808, Collaborative Arrangements (ASC 808). Additionally, the Company has determined that in the context of the medical affairs, commercialization and non-promotional activities, Otsuka does not represent a customer as contemplated by ASC 606-10-15, Revenue from Contracts with Customers – Scope and Scope Exceptions. As a result, the activities conducted pursuant to the medical affairs, commercialization and non-promotional activities plans will be accounted for as a component of the related expense in the period incurred. During the years ended December 31, 2019 and 2018, the Company incurred approximately $1.8 million and $1.2 million, respectively, of costs related to the cost-sharing provisions of the Otsuka U.S. Agreement of which approximately $0.7 million and $0.5 million are reimbursable by Otsuka and recorded as a reduction to research and development expense during each of the years ended December 31, 2019 and 2018, respectively. During the years ended December 31, 2019 and 2018, Otsuka incurred approximately $1.9 million and $1.1 million, respectively, of costs related to the cost-sharing provisions of the Otsuka U.S. Agreement, of which approximately $1.0 million and $0.5 million are reimbursable by the Company and recorded as an increase to research and development expense during the years ended December 31, 2019 and 2018.

International Collaboration and License Agreement with Otsuka Pharmaceutical Co. Ltd.

Summary of Agreement

On April 25, 2017, the Company entered into a collaboration and license agreement with Otsuka, or the Otsuka International Agreement. The collaboration is focused on the development and commercialization of vadadustat in Europe, Russia, China, Canada, Australia, the Middle East and certain other territories, collectively, the Otsuka International Territory. Under the terms of the Otsuka International Agreement, the Company is responsible for leading the development of vadadustat, including the ongoing global Phase 3 development program. Otsuka has the sole responsibility, at its own cost, for the commercialization of vadadustat in the Otsuka International Territory, subject to the approval by the relevant regulatory authorities.

Under the terms of the Otsuka International Agreement, the Company granted to Otsuka an exclusive, sublicensable license under certain intellectual property controlled by the Company to develop and commercialize vadadustat and products containing or comprising vadadustat in the Otsuka International Territory.

Pursuant to the terms of the Otsuka International Agreement, the Company is responsible for performing all activities related to the development of vadadustat as outlined in the current global development plan; however, the parties may agree to allocate certain responsibilities to Otsuka. Under the Otsuka International Agreement, the Company controls and retains final decision-making authority with respect to certain matters. Per the terms of the Otsuka International Agreement, Otsuka is generally responsible for the conduct of any development activities that may be required for marketing approvals in the Otsuka International Territory or otherwise performed with respect to the Otsuka International Territory that are incremental to those included in the current global development plan. The Company’s obligations related to the conduct of the current global development plan include the associated manufacturing and supply services for vadadustat.

Under the Otsuka International Agreement, Otsuka is to be solely responsible for the conduct of all medical affairs and commercialization activities in the Otsuka International Territory pursuant to underlying plans as reviewed and discussed by the parties. If approved by the relevant jurisdictional regulatory health authorities in the Otsuka International Territory, the Company will provide vadadustat to Otsuka for commercialization pursuant to a separate supply agreement to be negotiated. Additionally, the parties agreed not to promote, market or sell any competing product in the territory covered by the agreement.

The activities under the Otsuka International Agreement are governed by a JSC formed by an equal number of representatives from the Company and Otsuka. The JSC coordinates and monitors the parties’ activities under the collaboration. Among other responsibilities, the JSC manages the overall strategic alignment between the parties, oversees the current global development plan and reviews other detailed plans setting forth any other development activities that may be conducted under the arrangement. Additionally, the parties established a JDC, which is comprised of an equal number of representatives from the Company and Otsuka. Among other responsibilities, the JDC shares information related to, and reviews and discusses activities and progress under, the current global development plan and any other development that may be conducted pursuant to the collaboration. The Company and Otsuka also established a JMC, which is comprised of an equal number of representatives from each of the parties. Among other responsibilities, the JMC oversees the manufacturing plan and related manufacturing activities. In support of the potential commercialization of vadadustat, the parties established a JCC, which is comprised of an equal number of representatives from the Company and Otsuka. Among other responsibilities, the JCC manages the activities and progress under the commercialization and non-promotional activities plan and all other sales and marketing activities. The Company has retained final decision‑making authority with respect to certain matters. Otsuka has retained final decision‑making authority with respect to all commercialization matters, other than decisions related to certain marketing matters.

Under the terms of the Otsuka International Agreement, the Company received a $73.0 million up-front, non-refundable, non-creditable cash payment. The Company also received a payment of approximately $0.2 million which represents reimbursement for Otsuka’s share of costs previously incurred by the Company in implementing the current global development plan in excess of a specified threshold during the quarter ended March 31, 2017. Commencing in the second quarter of 2017, Otsuka began to contribute, as required by the Otsuka International Agreement, a percentage of the remaining costs incurred under the current global development plan. The Company estimates that Otsuka’s funding of the current global development plan costs subsequent to March 31, 2017 will total roughly $214.0 million or more, depending on the actual current global development plan costs incurred. The costs associated with the performance of any mutually agreed upon development activities in addition to those outlined in the current global development plan will be subject to a cost sharing or reimbursement mechanism as set forth in the Otsuka International Agreement or to be determined by the parties. Otsuka may elect to conduct additional studies of vadadustat in the EU, subject to the Company’s right to delay such studies based on its objectives outside the Otsuka International Territory. Otsuka will pay a percentage of the costs of any such studies, and the Company will pay its portion of the costs in the form of a credit against future amounts due to the Company under the Otsuka International Agreement. The costs incurred related to any other development activities, which are pursued solely for obtaining or maintaining marketing approval in the Otsuka International Territory or otherwise performed solely with respect to the Otsuka International Territory that are incremental to the development activities included in the current global development plan, will be borne in their entirety by Otsuka. Otsuka will pay costs incurred with respect to medical affairs and commercialization activities in the Otsuka International Territory.

In addition, Otsuka would be required to make certain milestone payments to the Company upon the achievement of specified development, regulatory and commercial events. More specifically, the Company is eligible to receive up to $80.0 million in development milestone payments and up to $52.0 million in regulatory milestone payments for the first licensed product to achieve the associated event. Moreover, the Company is eligible for up to $525.0 million in commercial milestone payments associated with aggregate sales of all licensed products. Additionally, to the extent vadadustat is commercialized, the Company would be entitled to receive tiered royalty payments ranging from the low double digits to the low thirties based on a percentage of net sales. Royalties are due on a country-by-country basis from the date of the first commercial sale of a licensed product in a country until the latest to occur of: (i) the expiration date in such country of the last to expire valid claim within the intellectual property covering the licensed product, (ii) the date of expiration of data or regulatory exclusivity in such country or (iii) the tenth anniversary of the first commercial sale of such licensed product in such country. Due to the uncertainty of pharmaceutical development and the high historical failure rates associated therewith, no milestone or royalty payments may ever be received from Otsuka. There are no cancellation, termination or refund provisions in the Otsuka International Agreement that contain material financial consequences to the Company.

Unless earlier terminated, the Otsuka International Agreement will expire upon the expiration of the royalty term in the last country in the Otsuka International Territory. Either party may terminate the Otsuka International Agreement in its entirety upon an uncured material breach or insolvency on the part of the other party. Otsuka may terminate the Otsuka International Agreement in its entirety or for a specific region in the Otsuka International Territory upon 12 months’ prior written notice at any time after the release of the first topline data from either the PRO₂TECT Phase 3 development program or the INNO₂VATE Phase 3 development program, whichever comes first. In the event of termination of the Otsuka International Agreement, all rights and licensees granted to Otsuka under the Otsuka International Agreement will automatically terminate, and the licenses granted to the Company will become freely sublicensable, but potentially subject to a future royalty. In addition, the upfront payment, all development costs and milestone payments received by the Company prior to such termination will not be eligible for refund to Otsuka.

Revenue Recognition

The Company has accounted for the Otsuka International Agreement separately from the collaboration arrangement with Otsuka with respect to the U.S. due to the lack of interrelationship and interdependence of the elements and payment terms within each of the contracts as they relate to the respective territories. Accordingly, the Company has applied the guidance in ASC 606 solely in reference to the terms and conditions of the Otsuka International Agreement, while the Otsuka U.S. Agreement has continued to be accounted for as a discrete agreement in its own right. The Company evaluated the Otsuka International Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, Otsuka, is a customer. The Company’s arrangement with Otsuka related to the Otsuka International Territory contains the following material promises under the contract at inception: (i) license under certain of the Company’s intellectual property to develop and commercialize (including the associated packaging) vadadustat and products containing or comprising vadadustat and development services to be performed pursuant to the current global development plan (the License and Development Services Deliverable), (ii) rights to future intellectual property (the Future IP Deliverable) and (iii) joint committee services (the Committee Deliverable).

The Company has identified three performance obligations in connection with its obligations under the Otsuka International Agreement. Factors considered in making this assessment of which material promises will be accounted for as a separate performance obligation included, among other things, the capabilities of the collaboration partner, whether any other vendor sells the item separately, whether the good or service is highly interdependent or highly interrelated to the other elements in the arrangement, and whether there are other vendors that can provide the items. Additionally, the Otsuka International Agreement does not include a general right of return. The three performance obligations identified in connection with the Company’s obligations under the Otsuka International Agreement are as follows:

(i)

License and Development Services Combined (License Performance Obligation)

The Company has determined that the license granted to Otsuka pursuant to the Otsuka International Agreement will be accounted for as component of the development services as opposed to a separately identified promise. Although the rights granted under the license are effective throughout the entire term of the arrangement, the Company will not be providing significant additional contributions of study data, regulatory submissions and regulatory approvals beyond the point that services under the current global development plan are conducted. Therefore, the period and pattern of recognition would be the same for both the license and the development services. Consequently, the Company has concluded that the license will effectively be treated as an inherent part of the associated development services promise instead of as a separate promise. As a result, the License and Development Services Deliverable will be treated as a single performance obligation (the License Performance Obligation).

(ii)

Rights to Future Intellectual Property (Future IP Performance Obligation)

The License and Development Services Deliverable is distinct from the Future IP Deliverable because Otsuka can obtain the value of the license using the clinical trial materials implicit in the development services without the receipt of any other intellectual property that may be discovered or developed in the future. The Future IP Deliverable is distinct from the Committee Deliverable because the Committee Deliverable has no bearing on the value to be derived from the rights to potential future intellectual property. As a result, the Future IP Deliverable qualifies as a separate performance obligation.

(iii)

Joint Committee Services (Committee Performance Obligation)

The License and Development Services Deliverable is distinct from the Committee Deliverable because Otsuka can obtain the value of the license using the clinical trial materials implicit in the development service without the joint committee services. The Committee Deliverable is distinct from the Future IP Deliverable because the Committee Deliverable has no bearing on the value to be derived from the rights to potential future intellectual property. As a result, the Committee Deliverable qualifies as a separate performance obligation.

The Company allocates the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price. The Company developed a best estimate of standalone selling price for the Committee Performance Obligation after considering the nature of the services to be performed and estimates of the associated effort and rates applicable to such services that would be expected to be realized under similar contracts. The Company developed a best estimate of standalone selling price for the Future IP Performance Obligation primarily based on the likelihood that additional intellectual property covered by the license conveyed will be developed during the term of the arrangement. The Company did not develop a best estimate of standalone selling price for the License Performance Obligation due to the following: (i) the best estimates of standalone selling price associated with the Future IP Performance Obligation was determined to be immaterial and (ii) the period of performance and pattern of recognition for the License Performance Obligation and the Committee Performance Obligation was determined to be similar. The Company has concluded that a change in the key assumptions used to determine the best estimate of standalone selling price for each performance obligation would not have a significant impact on the allocation of arrangement consideration.

The transaction price at inception was comprised of: (i) the up-front payment, (ii) the cost share payment with respect to amounts incurred by the Company during the quarter ended March 31, 2017, and (iii) an estimate of the cost share payments to be received with respect to amounts incurred by the Company subsequent to March 31, 2017. No development or regulatory milestones were included in the transaction price at inception, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including whether the receipt of the milestone payment is outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. Any consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the license granted to Otsuka and therefore have also been excluded from the transaction price. The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

As of December 31, 2019, the transaction price totaling $287.2 million is comprised of: (i) the up-front payment of $73.0 million, (ii) the cost share payment with respect to amounts incurred by the Company during the quarter ended March 31, 2017 of $0.2 million, and (iii) an estimate of the cost share payments to be received with respect to amounts incurred by the Company subsequent to March 31, 2017 of $214.0 million. As of December 31, 2019, no development or regulatory milestones have been assessed as probable of being reached and thus have been fully constrained.

During the years ended December 31, 2019, 2018 and 2017, the Company recognized revenue totaling approximately $75.6 million, $87.3 million, and $52.3 million, respectively, with respect to the Otsuka International Agreement. The revenue is classified as collaboration revenue in the accompanying consolidated statements of operations. As of December 31, 2019, there is approximately $24.1 million of deferred revenue related to the Otsuka International Agreement of which $16.3 million is classified as current and $7.8 million is classified as long-term in the accompanying consolidated balance sheet based on the performance period of the underlying obligations. Additionally, as of December 31, 2019, there is approximately $4.0 million in accounts receivable in the accompanying consolidated balance sheet. As of December 31, 2018, there was approximately $6.3 million in contract liabilities (included in accounts payable) in the consolidated balance sheet.

Janssen Pharmaceutica NV Research and License Agreement

Summary of Agreement

On February 9, 2017, the Company entered into a Research and License Agreement, the Janssen Agreement, with Janssen Pharmaceutica NV, or Janssen, a subsidiary of Johnson & Johnson, pursuant to which Janssen granted the Company an exclusive license under certain intellectual property rights to develop and commercialize worldwide certain HIF prolyl hydroxylase targeted compounds.

Under the terms of the Janssen Agreement, Janssen granted to the Company a license for a three-year research term to conduct research on the HIF compound portfolio, which research term is now expired. During the research term, the Company could designate one or more compounds as candidates for development and commercialization. Once a compound was designated for development and commercialization, the Company was to be solely responsible for the development and commercialization of the compound worldwide at its own cost and expense.

Under the terms of the Janssen Agreement, the Company made an upfront payment of $1.0 million in cash to Janssen and issued a warrant to purchase 509,611 shares of the Company’s common stock. In addition, Janssen could be eligible to receive up to an aggregate of $16.5 million from the Company in specified development milestone payments on a product-by-product basis. Janssen will also be eligible to receive up to $215.0 million from the Company in specified commercial milestones as well as tiered, escalating royalties ranging from a low to mid-single digit percentage of net sales, on a product-by-product basis, and subject to reduction upon expiration of patent rights or the launch of a generic product in the territory.

Unless earlier terminated, the Janssen Agreement will expire on a product-by-product and country-by-country basis upon the expiration of the last royalty term, which ends upon the longer of the expiration of the patents licensed under the Janssen Agreement, the expiration of regulatory exclusivity for such product, or 10 years from first commercial sale of such product. The Company may terminate the Janssen Agreement in its entirety or only with respect to a particular licensed compound or product upon 180 days’ prior written notice to Janssen. The parties also have customary termination rights, subject to a cure period, in the event of the other party’s material breach of the Janssen Agreement or in the event of certain additional circumstances.

As discussed above, the Company issued a Common Stock Purchase Warrant, or the Warrant, to Johnson & Johnson Innovation – JJDC, Inc., or JJDC, an affiliate of Janssen, for 509,611 shares of the Company’s common stock at an exercise price of $9.81 per share. The Warrant is exercisable by JJDC, in whole or in part, at any time prior to February 9, 2022. The Warrant and the shares issuable upon exercise of the Warrant will be sold and issued without registration under the Securities Act of 1933, as amended, or the Securities Act. The Company recorded the fair value of the Warrant in the amount of $3.4 million to additional paid-in capital and research and development expense in March 2017.

Vifor Pharma License Agreement

Summary of Agreement

On May 12, 2017, the Company entered into a License Agreement, or the Vifor Agreement, with Vifor (International) Ltd., or Vifor Pharma, pursuant to which the Company granted Vifor Pharma an exclusive license to sell vadadustat solely to Fresenius Kidney Care Group LLC, or FKC, an affiliate of Fresenius Medical Care North America, or FMCNA, in the United States. On April 8, 2019, the Company and Vifor Pharma entered into an Amended and Restated License Agreement, or the Vifor Amended Agreement, which amends and restates in full the Vifor Agreement.

Pursuant to the Vifor Amended Agreement, the Company granted Vifor Pharma an exclusive license to sell vadadustat to FKC and to certain third party dialysis organizations approved by the Company, or Third Party Dialysis Organizations, in the United States.

The license granted under the Vifor Amended Agreement will become effective upon (i) the approval of vadadustat for DD-CKD patients by the FDA, (ii) the earlier of a determination by the Centers for Medicare & Medicaid Services that vadadustat will be reimbursed using Medicare’s bundled reimbursement model or that vadadustat will be reimbursed using the Transitional Drug Add-On Payment Adjustment, and (iii) payment by Vifor Pharma of a $25.0 million milestone upon the occurrence of (i) and (ii).

The Vifor Amended Agreement is structured as a profit share arrangement between the Company and Vifor Pharma in which the Company will receive a majority of the profit, after deduction of certain amounts relating to Vifor Pharma’s costs, from Vifor Pharma’s sales of vadadustat to FKC and the Third Party Dialysis Organizations in the United States. The Company will share the milestone payment and the revenue from the profit share with Otsuka pursuant to the Otsuka U.S. Agreement. The Company currently retains rights to commercialize vadadustat for use in the NDD-CKD market and in other dialysis organizations in the United States, which will be done in collaboration with Otsuka following FDA approval.

The Vifor Amended Agreement provides that the Company and Vifor Pharma will enter into a commercial supply agreement for vadadustat pursuant to which the Company will supply all of Vifor Pharma’s requirements for vadadustat in the United States. In addition, Vifor Pharma will enter into supply arrangements with FKC and the Third Party Dialysis Organizations that will govern the terms pursuant to which Vifor Pharma will supply vadadustat to FKC and the Third Party Dialysis Organizations for use in patients at its dialysis centers in the United States. During the term of the Vifor Amended Agreement, Vifor Pharma is not permitted to sell any HIF product that competes with vadadustat in the United States to FKC or its affiliates or to any Third Party Dialysis Organization, and the Company may not directly supply vadadustat to FKC or any other affiliate of FMCNA or any Third Party Dialysis Organization.

Unless earlier terminated, the Vifor Amended Agreement will expire upon the later of the expiration of all patents that claim or cover vadadustat or expiration of marketing or regulatory exclusivity for vadadustat in the United States. Vifor Pharma may terminate the Vifor Amended Agreement in its entirety upon 12 months’ prior written notice after the release of the first topline data in the vadadustat global Phase 3 program for DD-CKD patients. In addition, either party may, subject to a cure period, terminate the Vifor Amended Agreement in the event of the other party’s uncured material breach or bankruptcy. The Company may terminate the Vifor Amended Agreement (or suspend the license) upon the occurrence of certain events, such as for specific violations of the Vifor Amended Agreement, Vifor Pharma’s failure to achieve certain sales levels, or if there are changes in Vifor Pharma’s relationship with FKC or in applicable laws and regulations related to the reimbursement of drugs like vadadustat at dialysis clinics, or if Vifor Pharma contests the validity or enforceability of any patent controlled by the Company that covers vadadustat. The Vifor Amended Agreement also includes a standstill provision and customary representations and warranties.

Investment Agreement

In connection with the Vifor Agreement, in May 2017, the Company and Vifor Pharma entered into an investment agreement, or the Investment Agreement, pursuant to which the Company sold an aggregate of 3,571,429 shares of the Company’s common stock, or the Shares, to Vifor Pharma at a price per share of $14.00 for a total of $50.0 million. The amount representing the premium over the closing stock price of $12.69 on the date of the transaction, totaling $4.7 million, was determined by the Company to represent consideration related to the Vifor Agreement. As the parties’ rights under the Vifor Agreement are conditioned upon (a) the approval of vadadustat for DD-CKD patients by the FDA; (b) the earlier of a determination by the Centers for Medicare & Medicaid Services that vadadustat will be reimbursed using Medicare’s bundled reimbursement model or that vadadustat will be reimbursed using the Transitional Drug Add-On Payment Adjustment; and (c) payment by Vifor Pharma of a $25.0 million milestone upon the occurrence of (a) and (b), in accordance with ASC 606, the Company has determined that the full transaction price is fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including clinical and regulatory risks that must be overcome in order for the parties’ rights to become effective and the probability of the $25.0 million milestone being achieved. Accordingly, the $4.7 million continues to be recorded as deferred revenue in the accompanying consolidated balance sheets. Upon the satisfaction of the aforementioned conditions, revenue will be recognized as the Company supplies vadadustat to Vifor Pharma using a proportional performance method.

Vifor Pharma agreed to a lock-up restriction such that it agrees not to sell the Shares for a period of time following the effective date of the Investment Agreement as well as a customary standstill agreement. In addition, the Investment Agreement contains voting agreements made by Vifor Pharma with respect to the Shares. The Shares have not been registered pursuant to the Securities Act, and were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act and Rule 506 promulgated thereunder.

Priority Review Voucher Letter Agreement

On February 14, 2020, we entered into a letter agreement, or the Letter Agreement, with Vifor Pharma relating to Vifor Pharma’s agreement with a third party to purchase a Priority Review Voucher, or the PRV, issued by the FDA, subject to satisfaction of customary closing conditions, or the PRV Purchase. A PRV entitles the holder to priority review of a New Drug Application, or NDA, or a Biologics License Application for a new drug, which reduces the target FDA review time to six months after official acceptance of the submission, and could lead to expedited approval. Pursuant to the Letter Agreement, Akebia will pay Vifor Pharma $10.0 million within fifteen business days after the closing of the PRV Purchase. Vifor Pharma is obligated to retain all rights to, and maintain the validity of, the PRV until Akebia and Vifor Pharma (a) enter into a definitive agreement setting forth the financial and other terms by which Vifor Pharma will assign the PRV to Akebia for use with Akebia’s planned NDA for vadadustat for the treatment of anemia due to CKD in both dialysis-dependent and non-dialysis dependent patients, or (b) make a mutual decision to sell the PRV and share the proceeds based on certain terms.

License Agreement with Panion & BF Biotech, Inc.

As a result of the Merger, the Company had a license agreement, which was amended from time to time, with Panion & BF Biotech, Inc., or Panion, under which Keryx, the Company’s wholly owned subsidiary, was the contracting party, or the Panion License Agreement, Keryx in-licensed the exclusive worldwide rights, excluding certain Asian-Pacific countries, or the Licensor Territory, for the development and commercialization of ferric citrate.

On April 17, 2019, the Company and Panion entered into a second amended and restated license agreement, or the Panion Amended License Agreement, which amends and restates in full the Panion License Agreement, effective as of April 17, 2019. The Panion Amended License Agreement provides Keryx with an exclusive license under Panion-owned know-how and patents covering the rights to sublicense, develop, make, use, sell, offer for sale, import and export ferric citrate worldwide, excluding the Licensor Territory. The Panion Amended License Agreement also provides Panion with an exclusive license under Keryx-owned patents covering the rights to sublicense (with the Company’s written consent), develop, make, use, sell, offer for sale, import and export ferric citrate in certain countries in the Licensor Territory. Consistent with the Panion License Agreement, under the Panion Amended License Agreement, Panion is eligible to receive from the Company or any sublicensee royalty payments based on a mid-single digit percentage of sales of ferric citrate in the Company’s licensed territories. The Company is eligible to receive from Panion or any sublicensee royalty payments based on a mid-single digit percentage of net sales of ferric citrate in Panion’s licensed territories.

The Panion Amended License Agreement terminates upon the expiration of each of the Company’s and Panion’s obligations to pay royalties thereunder. In addition, the Company may terminate the Panion Amended License Agreement (i) in its entirety or (ii) with respect to one or more countries in the Company’s licensed territory, in either case upon 90 days’ notice. The Company and Panion also each have the right to terminate the Panion Amended License Agreement upon the occurrence of a material breach of the Panion Amended License Agreement by the other party, subject to certain cure provisions, or certain insolvency events. The Panion Amended License Agreement also provides that, on a country-by-country basis, until the second anniversary of the expiration of the obligation of the Company or Panion, as applicable, to pay royalties in a country in which such party has ferric citrate for sale on the date of such expiration, neither the other party nor its affiliates will, directly or indirectly, sell, distribute or otherwise commercialize or supply or cause to supply ferric citrate to a third party for sale or distribution in such country.

The Panion Amended License Agreement includes customary terms relating to, among others, indemnification, confidentiality, remedies, and representations and warranties.

During the year ended December 31, 2019 and the period from December 12, 2018 to December 31, 2018, the Company incurred approximately $10.2 million and $0.4 million, respectively, in royalty payments due to Panion relating to the Company’s sales of Auryxia in the United States and JT and Torii’s net sales of Riona in Japan, as the Company is required to pay a mid-single digit percentage of net sales of ferric citrate in the Company’s licensed territories to Panion under the terms of the Panion Amended License Agreement.

Sublicense Agreement with Japan Tobacco, Inc. and its subsidiary, Torii Pharmaceutical Co., Ltd.

Summary of Agreement

As a result of the Merger, the Company has an Amended and Restated Sublicense Agreement, which was amended in June 2013, with JT and Torii, or the JT and Torii Sublicense Agreement, under which Keryx, the Company’s wholly owned subsidiary, remains the contracting party. Under the JT and Torii Sublicense Agreement, JT and Torii obtained the exclusive sublicense rights for the development and commercialization of ferric citrate hydrate in Japan. JT and Torii are responsible for the future development and commercialization costs in Japan.

Ferric citrate hydrate is currently approved by the Japanese Ministry of Health, Labour and Welfare for manufacturing and marketing in Japan for the treatment of hyperphosphatemia in patients with CKD. Ferric citrate hydrate is being marketed in Japan by Torii, under the brand name Riona. JT and Torii are currently conducting a Phase 3 clinical program evaluating Riona for the treatment of IDA in adult patients in Japan. JT and Torii have stated that, upon successful completion of its Phase 3 program, they expect to file an application for approval of IDA as an additional indication for Riona in Japan. The Company is eligible to receive royalty payments based on a tiered double-digit percentage of net sales of Riona in Japan escalating up to the mid-teens, subject to certain reductions upon expiration or termination of the Amended and Restated License Agreement between Keryx and Panion, by which Keryx in-licensed the exclusive worldwide rights, excluding certain Asian-Pacific countries, for the development and commercialization of ferric citrate. The Company is entitled to receive up to an additional $55.0 million upon the achievement of certain annual net sales milestones.

The sublicense under the JT and Torii Sublicense Agreement terminates upon the expiration of all underlying patent rights. Also, JT and Torii may terminate the JT and Torii Sublicense Agreement with or without cause upon at least six months prior written notice to us. Additionally, either party may terminate the JT and Torii Sublicense Agreement for cause upon 60 days’ prior written notice after the breach of any uncured material provision of the JT and Torii Sublicense Agreement, or after certain insolvency events.

Revenue Recognition

The Company evaluated the elements of the JT and Torii Sublicense Agreement in accordance with the provisions of ASC 606 and concluded that the contract counterparty, JT and Torii, is a customer. The Company’s arrangement with JT and Torii contains the following material promises under the contract at inception: (i) exclusive license to develop and commercialize ferric citrate hydrate in Japan (the License Deliverable), (ii) supply of ferric citrate hydrate until JT and Torii could secure their own source (the Supply Deliverable), (iii) knowledge transfer, and (iv) rights to future know-how.

The Company identified two performance obligations in connection with its obligations under the JT and Torii Sublicense Agreement: (i) License and Supply Performance Obligation and (ii) Rights to Future Know-How Performance Obligation. The Company allocated the transaction price to each performance obligation based on the Company’s best estimate of the relative standalone selling price. The Company developed a best estimate of the standalone selling price for the Rights to Future Know-How Performance Obligation primarily based on the likelihood that additional intellectual property covered by the license conveyed will be developed during the term of the arrangement and determined it immaterial. As such, the Company did not develop a best estimate of standalone selling price for the License and Supply Performance Obligation and allocated the entire transaction price to this performance obligation. Additionally, as of the consummation of the Merger, the services associated with the License and Supply Performance Obligation were completed and JT and Torii had secured their own source to manufacture ferric citrate hydrate. As such, any initial license fees as well as any development-based milestones and manufacturing fee revenue were received and recognized prior to the Merger. The Company determined that the remaining consideration that may be payable to the Company under the terms of the sublicense agreement are either quarterly royalties on net sales or payments due upon the achievement of sales-based milestones. In accordance with ASC 606, the Company recognizes sales-based royalties, including milestone payments based on the level of sales, when the related sales occur as these amounts have been determined to relate predominantly to the license granted to JT and Torii and therefore are recognized at the later of when the performance obligation is satisfied, or the related sales occur.

During the year ended December 31, 2019 and the period from December 12, 2018 to December 31, 2018, the Company recognized $5.9 million and $0.1 million, respectively, in license revenue related to royalties earned on net sales of Riona in Japan. The Company records the associated mid-single digit percentage of net sales royalty expense due to Panion, the licensor of Riona, in the same period as the royalty revenue from JT and Torii is recorded.

Business Combination

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Business Combination

5. Business Combination

On December 12, 2018, the Company completed the Merger with Keryx. Keryx’s proprietary product, Auryxia, is approved by the FDA for two indications: (1) the control of serum phosphorus levels in adult patients with DD-CKD and (2) the treatment of iron deficiency anemia in adult patients with NDD-CKD.

Akebia was determined to be the accounting acquirer and has accounted for the transaction as a business combination using the acquisition method of accounting under ASC 805. Accordingly, the results of Keryx’s operations are included in our consolidated financial statements from December 12, 2018, the date the Merger was completed. Keryx’s revenues and net loss from December 12, 2018 to December 31, 2018 were $6.9 million and $3.8 million, respectively.

Pursuant to the terms and conditions of the Merger Agreement, each outstanding Keryx Share, excluding the Baupost Additional Shares, as defined below, and each outstanding Keryx equity award were converted into Akebia Shares and substantially similar Akebia equity awards, respectively, at an exchange ratio of 0.37433 for a total fair value consideration of $527.8 million consisting of the following (in thousands):

Fair value of 57,773,090 Akebia Shares	$	516,492
Fair value of 602,752 Akebia RSUs		304
Fair value of 3,967,290 Akebia stock options		10,958
Total consideration	$	527,754

The fair value of the Akebia common stock and Akebia awards issued was calculated using $8.94 per share, the closing price of Akebia common stock on December 12, 2018. The portion of the fair value relating to the Akebia RSUs and stock options represents the fair value attributable to precombination employee services. The fair value relating to future employee service will be expensed as stock-based compensation on a straight-line basis over the remaining service periods of those awards.

Additionally, immediately prior to the Merger, Baupost Group Securities, L.L.C., or Baupost, agreed to convert its $164.7 million of Keryx’s Convertible Notes into 35,582,335 Keryx Shares, in accordance with the terms of the governing indenture agreement, in exchange for an additional 4,000,000 Keryx Shares, or the Baupost Additional Shares. The aggregate 39.6 million Keryx Shares were then converted into Akebia Shares at the 0.37433 exchange ratio. The fair value of the Baupost Additional Shares, on an as-converted basis, of $13.4 million has been excluded from the purchase price and recorded within selling, general and administrative expenses in the Company’s consolidated financial statements, as the issuance of those shares by Keryx is considered to be a separate transaction under ASC 805, since it was entered into by or on behalf of the acquirer or primarily for the benefit of the acquirer or the combined entity.

The Company allocated the $527.8 million purchase price to the identifiable assets acquired and liabilities assumed in the business combination at their fair values as of December 12, 2018 as follows (in thousands):

Cash and cash equivalents	$	5,257
Inventory		235,597
Trade accounts receivable, net		15,834
Prepaid expenses and other current assets		8,399
Goodwill		55,053
Intangible assets:
Developed product rights for Auryxia		329,130
Other intangible assets		545
Property and equipment, net		3,646
Other assets		14,441
Accounts payable		(17,570	)
Accrued expenses		(42,972	)
Deferred tax liability		(35,096	)
Debt		(15,000	)
Fair value of unfavorable executory contract		(29,510	)
Total purchase price	$	527,754

In performing the purchase price allocation, the Company considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Keryx’s business.

As part of the purchase price allocation, the Company identified developed product rights for Auryxia as the primary intangible asset. The fair value of the developed product rights for Auryxia was determined using the multi-period excess earnings method which is a variation of the income approach, and is a valuation technique that provides an estimate of the fair value of an asset based on the principle that the value of an intangible asset is equal to the present value of the incremental after-tax cash flows attributable to the asset, after taking charges for the use of other assets employed by the business. Key estimates and assumptions used in this model were projected revenues and expenses related to the asset, estimated contributory asset charges, and a risk-adjusted discount rate of 20.0% used to calculate the present value of the future expected cash inflows from the asset. The intangible asset is being amortized on a straight-line basis over its estimated useful life, which for Auryxia is nine years.

The Company also identified an executory contract in the supply agreement between Keryx and BioVectra Inc., or BioVectra, which includes future firm purchase commitments. This executory contract was deemed to have an off-market element related to the amount of purchase commitments that exceed the current forecast and as such, the Company recorded a liability in purchase accounting. As of the acquisition date, the fair value of the off-market element was $29.5 million.

The goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired. The factors contributing to the recognition of goodwill were based on several strategic and synergistic benefits that were expected to be realized from the Merger. These benefits included the expectation that the combined company would establish itself as a leading renal company with enhanced position and large market opportunity, synergistic utilization of Keryx’s commercial organization, and strengthening the combined company’s financial profile. Such goodwill is not deductible for tax purposes.

In connection with the Merger, the Company identified a deferred tax liability of $35.1 million as a result of the difference in the book basis and tax basis related to the identifiable inventory, other intangible assets, net and other liability. In determining the deferred tax liability to be recorded the Company elected to first consider the recoverability of the deferred tax assets acquired in the acquisition before considering the recoverability of the acquirer’s existing deferred tax assets.

In connection with the Merger, the Company incurred $23.1 million of direct transaction costs, which along with the expense associated with the Baupost Additional Shares, is recorded within general and administrative expenses in our consolidated financial statements for the year ended December 31, 2018.

Available for Sale Securities

12 Months Ended

Dec. 31, 2019

Investments Debt And Equity Securities [Abstract]

Available for Sale Securities

6. Available For Sale Securities

Available for sale securities at December 31, 2019 and 2018 consist of the following:

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
	(in thousands)
December 31, 2019
Cash and cash equivalents	$	147,449	$	—	$	—	$	147,449
Available for sale securities:
Certificates of deposit	$	245	—		—		$	245
Total available for sale securities	$	245	$	—	$	—	$	245
Total cash, cash equivalents, and available for sale securities	$	147,694	$	—	$	—	$	147,694

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses			Fair Value
	(in thousands)
December 31, 2018
Cash and cash equivalents	$	104,644	$	—	$	—		$	104,644
Available for sale securities:
Certificates of deposit	$	245	—			—		$	245
U.S. government debt securities		158,518		1		(198	)		158,321
Corporate debt securities		58,494	—			(64	)		58,430
Total available for sale securities	$	217,257	$	1	$	(262	)	$	216,996
Total cash, cash equivalents, and available for sale securities	$	321,901	$	1	$	(262	)	$	321,640

The estimated fair value of the Company’s available for sale securities balance at December 31, 2019, by contractual maturity, is as follows (in thousands):

Due in one year or less	$	245
Due after one year		—
Total available for sale securities	$	245

There were no realized gains or losses on available for sale securities for the years ended December 31, 2019 or 2018. Additionally, the Company did not have any available for sale securities that were in an unrealized loss position as of December 31, 2019. The following table summarizes the Company’s available for sale securities that were in a continuous unrealized loss position, but were not deemed to be other-than-temporarily impaired, as of December 31, 2018:

	Unrealized Loss for Less Than 12 Months					Unrealized Loss for 12 Months or More					Total
	Gross					Gross					Gross
	Unrealized			Estimated		Unrealized			Estimated		Unrealized			Estimated
	Losses			Fair Value		Losses			Fair Value		Losses			Fair Value
	(in thousands)
December 31, 2018
Available for sale securities:
U.S. government debt securities	$	(159	)	$	116,026	$	(39	)	$	29,934	$	(198	)	$	145,960
Corporate debt securities		(64	)		58,430		—			—		(64	)		58,430
Total	$	(223	)	$	174,456	$	(39	)	$	29,934	$	(262	)	$	204,390

As noted above, there were no securities as of December 31, 2019 that were in an unrealized loss position. There were 51 securities as of December 31, 2018 that were in an unrealized loss position. The Company considered the decline in the market value of these securities to be primarily attributable to current economic conditions. The contractual terms of these securities do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investment.

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

The Company utilizes a portfolio management company for the valuation of the majority of its investments. This company is an independent, third-party vendor recognized to be an industry leader with access to market information that obtains or computes fair market values from quoted market prices, pricing for similar securities, recently executed transactions, cash flow models with yield curves and other pricing models. For valuations obtained from the pricing service, the Company performs due diligence to understand how the valuation was calculated or derived, focusing on the valuation technique used and the nature of the inputs.

Based on the fair value hierarchy, the Company classifies its cash equivalents and available for sale securities within Level 1 or Level 2. This is because the Company values its cash equivalents and available for sale securities using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

Assets measured or disclosed at fair value on a recurring basis as of December 31, 2019 and 2018 are summarized below:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(in thousands)
December 31, 2019
Assets:
Cash and cash equivalents	$	147,449	$	—	$	—	$	147,449
Certificates of deposit		—		245		—		245
	$	147,449	$	245	$	—	$	147,694

Liabilities:
Derivative liability	$	—	$	—	$	1,650	$	1,650
	$	—	$	—	$	1,650	$	1,650

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(in thousands)
December 31, 2018
Assets:
Cash and cash equivalents	$	104,644	$	—	$	—	$	104,644
Certificates of deposit		—		245		—		245
U.S. government debt securities		—		158,321		—		158,321
Corporate debt securities		—		58,430		—		58,430
	$	104,644	$	216,996	$	—	$	321,640

The corporate debt securities held by the Company were all investment grade.

The Company’s Loan Agreement with Pharmakon (see Note 11) contains certain provisions that change the underlying cash flows of the debt instrument, including a potential extension to the interest-only period dependent on both no event of default having occurred and continuing and on the Company achieving certain regulatory and revenue conditions. The Company also assessed the acceleration of the obligations under the Loan Agreement under an event of default. In addition, under certain circumstances, a default interest rate will apply on all outstanding obligations during the occurrence and continuance of an event of default. In accordance with ASC 815, the Company concluded that these features are not clearly and closely related to the host instrument, and represent a single compound derivative that is required to be re-measured at fair value on a quarterly basis.

The events of default include a minimum liquidity threshold starting in 2021. At November 25, 2019, the Company recorded a derivative liability related to the Company’s Loan Agreement with Pharmakon of $1.7 million. The Company determined that the change in fair value from November 25, 2019 to December 31, 2019 was immaterial. The Company classified the derivative liability as a non-current liability on the balance sheet at December 31, 2019. The estimated fair value of the derivative liability was determined using a scenario-based approach and discounted cash flow model that includes principal and interest payments under various scenarios involving clinical development success for vadadustat and various cash flow assumptions. Probabilities surrounding clinical development success were derived using industry benchmarks. Should the Company’s assessment of the probabilities around these scenarios change, there could be a change to the fair value of the derivative liability.

The Company had no other assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2019 and December 31, 2018.

Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the immaterial balance of investments held at December 31, 2019, the Company does not believe that changes in risks in the near term would result in material changes in the fair value of investments.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Inventory

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Inventory

8. Inventory

The components of inventory, inclusive of step-up as a result of bringing Keryx’s inventory onto Akebia’s books in connection with the Merger, are summarized as follows:

	December 31, 2019		December 31, 2018
	(in thousands)
Raw materials	$	2,278	$	1,880
Work in process		137,858		215,122
Finished goods		42,096		18,182
Total inventory	$	182,232	$	235,184

Long-term inventory, which primarily consists of raw materials and work in process, is included in other assets in the Company’s consolidated balance sheets.

	December 31, 2019		December 31, 2018
	(in thousands)
Balance Sheet Classification:
Inventory	$	116,349	$	114,245
Other assets		65,883		120,939
Total inventory	$	182,232	$	235,184

Inventory amounts written down as a result of excess, obsolescence, scrap or other reasons and charged to cost of goods sold totaled $7.1 million during the year ended December 31, 2019. There were no inventory write-offs during the period from December 12, 2018 through December 31, 2018. If future sales of Auryxia are lower than expected, the Company may be required to write-down the value of such inventories. Inventory write-downs and losses on purchase commitments are recorded as a component of cost of sales in the consolidated statement of operations.

Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

9. Intangible Assets and Goodwill

Intangible Assets

The following table presents the Company’s intangible assets (in thousands):

	December 31, 2019
	Gross Carrying Value		Accumulated Amortization			ASC 842 Adjustment			Total		Estimated useful life
Acquired intangible assets:
Developed product rights for Auryxia	$	329,130	$	(37,918	)	$	—		$	291,212	9 Years
Favorable lease		545		(5	)		(540	)		-	N/A
Total	$	329,675	$	(37,923	)	$	(540	)	$	291,212

	December 31, 2018
	Gross Carrying Value		Accumulated Amortization			Total		Estimated useful life
Acquired intangible assets:
Developed product rights for Auryxia	$	329,130	$	(1,517	)	$	327,613	9 Years
Favorable lease		545		(5	)		540	4 years
Total	$	329,675	$	(1,522	)	$	328,153

On December 12, 2018, the Company completed the Merger, whereby it acquired certain definite-lived intangible assets, including the developed product rights for Auryxia and a favorable lease. The Company amortizes its definite-lived intangible assets acquired as part of the Merger using the straight-line method, which is considered the best estimate of economic benefit, over its estimated useful life. As a result of the adoption of ASC 842 on January 1, 2019, the Company reclassed the remaining balance of the favorable lease intangible asset into the operating lease asset. The Company recorded $36.4 million and $1.5 million in amortization expense related to the developed product rights for Auryxia during the years ended December 31, 2019 and 2018. Estimated future amortization expense for the intangible asset as of December 31, 2019 is as follows (in thousands):

	Total
2020	$	36,402
2021		36,401
2022		36,402
2023		36,401
2024		36,402
Thereafter		109,204
	$	291,212

Goodwill

Goodwill was $55.1 million as of December 31, 2019 and 2018, derived as follows (in thousands):

Total Merger consideration	$	527,754
Less: Fair value of identified acquired assets and liabilities, net		(472,701	)
Goodwill	$	55,053

Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that an impairment may exist.

Accrued Expenses

12 Months Ended

Dec. 31, 2019

Payables And Accruals [Abstract]

Accrued Expenses

10. Accrued Expenses

Accrued expenses are as follows:

	December 31, 2019		December 31, 2018
	(in thousands)
Accrued clinical	$	61,815	$	71,881
Product revenue allowances		30,552		22,861
Accrued payroll		12,604		12,880
Lease liability		4,989		—
Professional fees		3,444		2,367
Royalties		2,713		2,430
Accrued commercial manufacturing		2,680		6,383
Accrued severance		725		3,962
Merger costs		—		16,071
Accrued other		9,549		12,082
Total accrued expenses	$	129,071	$	150,917

Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

11. Debt

Future principal payments on the Term Loans (as defined below) as of December 31, 2019 are as follows (in thousands):

	Principal
	Payments
	(in thousands)
2020	$	—
2021		—
2022		7,140
2023		30,354
2024		42,506
Thereafter		—
Total before unamortized discount and issuance costs		80,000
Less: unamortized discount and issuance costs		(4,195	)
Total term loans	$	75,805

Term Loans

On November 11, 2019, the Company, with Keryx as guarantor, entered into a loan agreement, or the Loan Agreement, with BioPharma Credit PLC as collateral agent and a lender, or the Collateral Agent, and BioPharma Credit Investments V (Master) LP as a lender, collectively with the Collateral Agent, Pharmakon, pursuant to which term loans in an aggregate principal amount of $100.0 million are made available to the Company in two tranches, subject to certain terms and conditions, or the Term Loans. The first tranche of $80.0 million, or Tranche A, was drawn on November 25, 2019, or the Tranche A Funding Date. The second tranche, available until December 31, 2020, allows the Company to borrow, at its option, an additional $20.0 million, or Tranche B, subject to the satisfaction of customary conditions. The date on which Tranche B is drawn, the Tranche B Funding Date, and each of the Tranche A Funding Date and the Tranche B Funding Date, a Funding Date.

Proceeds from the Term Loans may be used for general corporate purposes. The Company and Keryx entered into a Guaranty and Security Agreement with the Collateral Agent, or the Guaranty and Security Agreement, on the Tranche A Funding Date. Pursuant to the Guaranty and Security Agreement, the Company’s obligations under the Term Loans are unconditionally guaranteed by Keryx, or the Guarantee. Additionally, the obligations of the Company and Keryx under the Term Loans and the Guarantee are secured by a first priority lien on certain assets of the Company and Keryx, including Auryxia and certain related assets, cash, and certain equity interests held by the Company and Keryx, collectively the Collateral.

The Term Loans bear interest at a floating rate per annum equal to the three-month LIBOR rate plus 7.50%, subject to a 2.00% LIBOR floor and a 3.35% LIBOR cap, payable quarterly in arrears. The Term Loans will mature on the fifth anniversary of the Tranche A Funding Date, or the Maturity Date. The Company will repay the principal under the Term Loans in equal quarterly payments starting on the 33rd-month anniversary of the applicable Funding Date or, if certain conditions are met, it will have the option to repay the principal in equal quarterly payments starting on the 48th-month anniversary of the applicable Funding Date, or collectively the Amortization Schedule. Under certain circumstances, unless certain liquidity conditions are met, the Maturity Date may decrease by up to one year, and the Amortization Schedule may correspondingly commence up to one year earlier.

On the Tranche A Funding Date, the Company paid to Pharmakon a facility fee equal to 2.00% of the aggregate principal amount of the Term Loans, or $2.0 million, in addition to other expenses incurred by Pharmakon and reimbursed by the Company, or Lender Expenses. The Tranche A draw was $77.3 million, net of facility fee, Lender Expenses and issuance costs. The Loan Agreement permits voluntary prepayment at any time in whole or in part, subject to a prepayment premium. The prepayment premium would be 2.00% of the principal amount being prepaid prior to the third anniversary of the applicable Funding Date, 1.00% on or after the third anniversary, but prior to the fourth anniversary, of the applicable Funding Date, and 0.50% on or after the fourth anniversary of the applicable Funding Date but prior to the Maturity Date, and a make-whole premium on or prior to the second anniversary of the applicable Funding Date in an amount equal to foregone interest through the second anniversary of the applicable Funding Date. A change of control triggers a mandatory prepayment of the Term Loans.

The Loan Agreement contains customary representations, warranties, events of default and covenants of the Company and its subsidiaries, including maintaining, on an annual basis, a minimum liquidity threshold starting in 2021, and on a quarterly basis, a minimum net sales threshold for Auryxia starting in the fourth quarter of 2020. If an event of default occurs and is continuing under the Loan Agreement, the Collateral Agent is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement. Under certain circumstances, a default interest rate will apply on all outstanding obligations during the occurrence and continuance of an event of default. As of December 31, 2019, the Company determined that no events of default had occurred.

The Company assessed the terms and features of the Loan Agreement in order to identify any potential embedded features that would require bifurcation or any beneficial conversion feature. As part of this analysis, the Company assessed the economic characteristics and risks of the Loan Agreement, including put and call features. The terms and features assessed include a potential extension to the interest-only period dependent on both no event of default having occurred and continuing and on the Company achieving certain regulatory and revenue conditions. The Company also assessed the acceleration of the obligations under the Loan Agreement under an event of default. In addition, under certain circumstances, a default interest rate will apply on all outstanding obligations during the occurrence and continuance of an event of default. In accordance with ASC 815, the Company concluded that these features are not clearly and closely related to the host instrument, and represent a single compound derivative that is required to be re-measured at fair value on a quarterly basis.

During the year ended December 31, 2019, the Company recognized approximately $0.9 million of interest expense related to the Loan Agreement.

Revolving Line of Credit

Keryx, the Company’s wholly owned subsidiary following the Merger, had a $40.0 million revolving line of credit, or the Line of Credit, under its Loan and Security Agreement with Silicon Valley Bank, or SVB. On July 31, 2019, Keryx entered into a Waiver and First Amendment to Loan and Security Agreement, or the Loan Amendment. Pursuant to the Loan Amendment, certain revisions were made to the Loan and Security Agreement, including requiring Keryx to maintain, from and after December 31, 2019, subject to certain exceptions, a certain amount of funds to which the Company had unrestricted access in one or more asset management accounts with SVB or SVB’s affiliate and revising certain of the representations and warranties and covenants in the Loan and Security Agreement. In addition, pursuant to the Loan Amendment, SVB waived the then-existing events of default.

On August 7, 2019, the Company executed and delivered to SVB an Unconditional Guaranty, or the Guaranty, pursuant to which the Company guaranteed the prompt and complete payment and performance when due of all of the obligations and liabilities of Keryx under the Loan and Security Agreement, as amended by the Loan Amendment, or the Amended Loan Agreement. In addition, the Company entered into a Security Agreement with SVB effective August 7, 2019, or the Security Agreement, pursuant to which the Company granted to SVB a continuing first priority security interest in substantially all of the Company’s personal property, other than the Company’s intellectual property, to secure the payment and performance of the Company’s obligations under the Guaranty. The Company’s obligations under the Guaranty were independent of Keryx’s obligations, and separate actions were able to be brought against the Company.

Availability under the Line of Credit was subject to a borrowing base comprised of eligible receivables and eligible inventory of Keryx as set forth in the Loan and Security Agreement. As of December 31, 2019 and 2018, there was $0 and $15.0 million outstanding, respectively, under the Line of Credit and the Company had $0 in available borrowing base as of December 31, 2019, as the Line of Credit was terminated in November 2019.

The principal amount outstanding under the Loan and Security Agreement bore interest at a floating rate per annum equal to the greater of (i) 2.0% above the “prime rate,” as reported in The Wall Street Journal and (ii) 6.75%, which interest was payable monthly. Principal amounts borrowed under the Line of Credit were able to be repaid and, prior to the maturity date, re-borrowed, subject to the terms and conditions set forth in the Loan and Security Agreement. Upon entry into the Loan and Security Agreement (payable in installments and subject to certain conditions), and at the one year anniversary of the effective date of the Loan and Security Agreement (or, if earlier, upon termination of or an event of default under the Loan and Security Agreement), Keryx paid to SVB a fee equal to 1.00% of the Line of Credit. Keryx was also required to pay on a quarterly basis a fee equal to 0.25% per annum of the average unused portion of the Line of Credit. Pursuant to the terms of the Loan and Security Agreement, Keryx was required to pay a termination fee of 2.00% of the Line of Credit, if the Loan and Security Agreement was terminated prior to the maturity date, subject to certain exceptions. The Company terminated the Loan and Security Agreement, the Unconditional Guaranty, and the Security Agreement on November 7, 2019, and Keryx paid SVB a termination fee of $0.8 million.

During the year ended December 31, 2019 and the period from December 12, 2018 through December 31, 2018, the Company recognized approximately $0.5 million and $65,000, respectively, of interest expense related to the Line of Credit. The Company did not incur any amortization expense related to the origination fee and other additional fees noted above as such fees were included in the fair value of the Line of Credit as of December 12, 2018, the date on which the Merger was consummated, in accordance with ASC 805.

Warrant

12 Months Ended

Dec. 31, 2019

Warrant Disclosure [Abstract]

Warrant

12. Warrant

In connection with the Janssen Agreement, in February 2017, the Company issued a warrant to purchase 509,611 shares of the Company’s common stock at an exercise price of $9.81 per share. The warrant was fully vested upon issuance and exercisable in whole or in part, at any time prior to February 9, 2022. The warrant satisfied the equity classification criteria of ASC 815, and is therefore classified as an equity instrument. The fair value at issuance of $3.4 million was calculated using the Black-Scholes option pricing model and was charged to research and development expense as it represented consideration for a license for which the underlying intellectual property was deemed to have no alternative future use. As of December 31, 2019, the warrant remains outstanding and expires on February 9, 2022.

Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholders' Equity

13. Stockholders’ Equity

Authorized and Outstanding Capital Stock

As of December 31, 2019, the authorized capital stock of the Company included 175,000,000 shares of common stock, par value $0.00001 per share, of which 121,674,568 and 116,887,518 shares were issued and outstanding at December 31, 2019 and 2018, respectively; and 25,000,000 shares of undesignated preferred stock, par value $0.00001 per share, of which 0 shares were issued and outstanding at December 31, 2019 and December 31, 2018.

Retired Shares

In April 2019, the Company repurchased and retired 55,324 shares of common stock from certain officers of the Company. The proceeds from the disposition of these shares were used by certain officers of the Company to cover tax liabilities associated with previously vested RSUs.

At-the-Market Facility

In May 2016, the Company established an at-the-market, or ATM, equity offering program pursuant to which it was able to offer and sell up to $75.0 million its common stock at the then current market prices from time to time. Through December 31, 2018, the Company sold 1,775,214 shares of common stock under this program with net proceeds of $22.6 million, of which 694,306 shares were sold in the year ended December 31, 2018 for net proceeds of approximately $10.5 million. Additionally, the Company sold 1,384,520 shares in the six months ended June 30, 2019 for net proceeds (after deducting commissions and other offering expenses) of approximately $9.4 million.

On November 12, 2019, the Company entered into an Amended and Restated Controlled Equity Offering^SM Sales Agreement with Cantor Fitzgerald & Co. for the offer and sale of common stock at the then current market prices in amounts to be determined from time to time. Also, on November 12, 2019, the Company filed a prospectus supplement pursuant to which it was able to offer and sell up to $75.0 million its common stock at the then current market prices from time to time. In December 2019, the Company commenced sales under this program. Through December 31, 2019, the Company sold 2,684,392 shares of common stock under this program with net proceeds (after deducting commissions and other offering expenses) of $16.8 million. Subsequent to December 31, 2019 and through February 4, 2020, the Company sold 7,973,967 shares of common stock under this program with net proceeds (after deducting commissions and other offering expenses) of $56.7 million.

Equity Offering

In March 2018, the Company completed a follow-on public equity offering, whereby the Company sold 8,500,000 shares of common stock at a public offering price of $10.50 per share. The aggregate net proceeds received by the Company from the offering were approximately $84.8 million, net of underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company did not have any follow-on public equity offerings during the year ended December 31, 2019.

Shares Issued and Awards Assumed in Connection with Business Combination

On December 12, 2018, the Company completed the Merger. Pursuant to the terms and conditions of the Merger Agreement, each Keryx Share issued and outstanding as of the Effective Time was cancelled and converted into 0.37433 fully paid and non-assessable Akebia Shares. As a result, in December 2018, the Company issued 57,773,090 shares of common stock to Keryx shareholders, and 1,497,320 shares issued as part of the Baupost Additional Shares which has been excluded from the business combination purchase price (see Note 5).

Additionally, in connection with the Merger, the Company converted outstanding and unexercised options to purchase Keryx Shares into 3,967,290 options to purchase Akebia Shares, as adjusted to the reflect the Exchange Multiplier, of which 3,733,336 are service-based stock options and 233,954 are performance-based stock options. The Company also converted outstanding Keryx Restricted Shares into 602,752 Akebia RSUs, of which 486,709 are service-based RSUs and 116,043 are performance-based RSUs.

Acceleration of Equity Awards

In connection with the closing of the Merger, certain executives of Keryx were terminated and as a result, the Company accelerated in full the vesting of all of the outstanding equity awards for each such executive, consistent with his or her existing employment agreements. Additionally, subject to limited exceptions, all outstanding equity awards held by certain officers of Akebia also had the vesting of their outstanding equity awards accelerated in full upon consummation of the Merger as a result of the change in control provision included in each such officer’s award agreements and their Executive Severance Agreements. As a result, the Company recognized $9.7 million of stock-based compensation expense related to the acceleration of awards during the year ended December 31, 2018.

Equity Plans

On February 28, 2014, the Company’s Board of Directors adopted its 2014 Incentive Plan and its 2014 Employee Stock Purchase Plan, or the 2014 ESPP, which were subsequently approved by its shareholders and became effective upon the closing of the Company’s initial public offering on March 25, 2014. The Company’s 2014 Incentive Plan was subsequently amended on December 11, 2018, which amendment did not require shareholder approval. The Company’s 2014 Incentive Plan, as amended, is referred to as the 2014 Plan. The 2014 Plan replaced the Company’s Amended and Restated 2008 Equity Incentive Plan, or the 2008 Plan; however, options or other awards granted under the 2008 Plan prior to the adoption of the 2014 Plan that have not been settled or forfeited remain outstanding and effective. On June 6, 2019, the Company’s shareholders approved the Amended and Restated 2014 Employee Stock Purchase Plan, or the ESPP. In May 2016, the Company’s Board of Directors approved an inducement award program that was separate from the Company’s equity plans and which, consistent with Nasdaq Listing Rule 5635(c)(4), did not require shareholder approval, or the Inducement Award Program. For 2019, the Company authorized the issuance of up to 3,150,000 shares for the purpose of granting options to purchase shares of the Company’s common stock to new hires under the Inducement Award Program, of which 1,505,300 options to purchase Akebia Shares were granted during the year ended December 31, 2019, of which 1,412,550 options to purchase Akebia Shares remained outstanding at December 31, 2019.

The 2014 Plan allows for the granting of stock options, stock appreciation rights, or SARs, restricted stock, unrestricted stock, RSUs, performance awards and other awards convertible into or otherwise based on shares of the Company’s common stock. Dividend equivalents may also be provided in connection with an award under the 2014 Plan. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards under the 2014 Plan. The Company initially reserved 1,785,000 shares of its common stock for the issuance of awards under the 2014 Plan. The 2014 Plan provides that the number of shares reserved and available for issuance under the 2014 Plan will automatically increase annually on January 1 of each calendar year, by an amount equal to three percent (3%) of the number of Akebia Shares outstanding on a fully diluted basis as of the close of business on the immediately preceding December 31, or the 2014 Plan Evergreen Provision. The Company’s Board of Directors may act prior to January 1 of any year to provide that there will be no automatic increase in the number of Akebia Shares available for grant under the 2014 Plan for that year (or that the increase will be less than the amount that would otherwise have automatically been made). On December 12, 2018, in connection with the consummation of the Merger, the Company assumed outstanding and unexercised options to purchase Keryx Shares, as adjusted by the Exchange Multiplier pursuant to the terms of the Merger Agreement, under the following Keryx equity plans, or the Keryx Equity Plans: the Keryx 1999 Share Option Plan, the Keryx 2004 Long-Term Incentive Plan, the Keryx 2007 Incentive Plan, the Keryx Amended and Restated 2013 Incentive Plan, and the Keryx 2018 Equity Incentive Plan, or the Keryx 2018 Plan. In addition, the number of Keryx Shares available for issuance under the Keryx 2018 Plan, as adjusted by the Exchange Multiplier pursuant to the terms of the Merger Agreement, may be used for awards granted by the Company under its 2014 Plan, or the Assumed Shares, provided that the Company uses the Assumed Shares for individuals who were not employees or directors of the Company prior to the consummation of the Merger. During the year ended December 31, 2019, the Company granted 2,028,625 options to purchase Akebia Shares to employees under the 2014 Plan, 1,505,300 options to purchase Akebia Shares to employees under the Inducement Award Program, 4,485,895 Akebia RSUs to employees under the 2014 Plan, 180,900 options to purchase Akebia Shares to directors under the 2014 Plan, and 123,300 Akebia RSUs to directors under the 2014 Plan.

The ESPP provides for the issuance of options to purchase shares of the Company’s common stock to participating employees at a discount to their fair market value. As noted above, the Company’s stockholders approved the ESPP, which amended and restated the Company’s 2014 ESPP, on June 6, 2019. The maximum aggregate number of shares at December 31, 2019 of the Company’s common stock available for future issuance under the ESPP is 5,715,992. Under the ESPP, each offering period is six months, at the end of which employees may purchase shares of the Company’s common stock through payroll deductions made over the term of the offering. The per-share purchase price at the end of each offering period is equal to the lesser of eighty-five percent (85%) of the closing price of the Company’s common stock at the beginning or end of the offering period.

Shares Reserved for Future Issuance

The Company has reserved for future issuance the following number of shares of common stock:

	December 31, 2019		December 31, 2018
Common stock options and RSUs outstanding ⁽¹⁾		12,195,031		9,309,204
Shares available for issuance under Akebia equity plans ⁽²⁾		2,983,256		4,526,563
Warrant to purchase common stock		509,611		509,611
Shares available for issuance under the ESPP ⁽³⁾		5,715,992		603,522
Total		21,403,890		14,948,900

⁽¹⁾	Includes awards granted under the 2014 Plan and the Inducement Award Program and awards issued in connection with the Merger.

⁽²⁾

On January 1, 2020, January 1, 2019 and January 1, 2018, the shares reserved for future grants under the 2014 Plan increased by 4,031,376, 3,801,198 and 1,575,329 shares, respectively, pursuant to the 2014 Plan Evergreen Provision. On December 12, 2018, the shares reserved for future grants under the 2014 Plan increased by 2,323,213 shares as a result of the Company’s addition of the Assumed Shares to the 2014 Plan. On December 19, 2017, the Company’s Board of Directors approved 750,000 shares for issuance as option awards in fiscal year 2018 under the Inducement Award Program. On January 30, 2019, the Company’s Board of Directors approved 3,150,000 shares for issuance as option awards in fiscal year 2019 under the Inducement Award Program.

⁽³⁾

On June 6, 2019, the shares reserved for future issuance under the ESPP increased by 5,200,000 shares upon shareholder approval of the Amended and Restated 2014 Employee Stock Purchase Plan. On February 28, 2018 and February 28, 2017, the shares reserved for future issuance under the ESPP remained unchanged. There were no increases in the shares reserved for future issuance pursuant to the evergreen provision under the 2014 ESPP in 2017 and 2018 as the maximum aggregate number of shares available for purchase under the 2014 ESPP had reached its cap of 739,611 on February 28, 2016.

Stock-Based Compensation

Stock Options

Service-Based Stock Options

On February 28, 2019, as part of the Company’s annual grant of equity, the Company issued 2,028,625 stock options to employees. In addition, the Company issues stock options to directors, new hires and occasionally to other employees not in connection with the annual grant process. Options granted by the Company vest over periods of between 12 and 48 months, subject, in each case, to the individual’s continued service through the applicable vesting date. Options vest either 100% on the first anniversary of the grant date or in installments of (i) 25% at the one year anniversary and (ii) 12 equal quarterly installments beginning after the one year anniversary of the grant date, subject to the individual’s continuous service with the Company. Options generally expire ten years after the date of grant. The Company recorded approximately $5.4 million, $11.9 million and $6.5 million of stock-based compensation expense related to stock options granted during fiscal years 2019, 2018 and 2017, respectively.

On December 12, 2018, pursuant to the Merger Agreement, each outstanding and unexercised option to acquire Keryx Shares granted under a Keryx equity plan converted into an option to acquire Akebia Shares, with the number of shares and exercise price adjusted by the Exchange Multiplier. As a result, the Company assumed 3,733,336 service-based options related to the Merger. The vesting schedule for these options is consistent with the vesting schedule noted above.

The assumptions used in the Black-Scholes pricing model to estimate the grant date fair value of options granted under the 2014 Plan are as follows:

	Year ended December 31,
	2019	2018	2017
Risk-free interest rate	1.42% - 2.57%	2.54% - 3.01%	1.81% - 2.27%
Dividend yield	0.00%	0.00%	0.00%
Volatility	61.40% - 64.10%	61.65% - 77.04%	78.57% - 85.81%
Expected term (years)	5.51 - 6.25	5.51 - 6.25	5.51 - 6.25

The following table summarizes the Company’s stock option activity, excluding performance-based options, for the year ended December 31, 2019:

	Shares			Weighted-Average Exercise Price		Weighted-Average Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding, December 31, 2018		8,144,752		$	13.57			$	2,351,316
Granted		3,714,825		$	6.38
Exercised		(362,796	)	$	1.54			$	1,273,757
Forfeited		(3,842,588	)	$	15.26			$	67,753
Expired/cancelled		(30,084	)	$	18.09
Outstanding, December 31, 2019		7,624,109		$	9.77		7.84	$	3,173,101
Options exercisable, December 31, 2019		3,759,075		$	12.74		6.45	$	983,273
Vested and expected to vest, December 31, 2019		7,624,109		$	9.77

The weighted-average grant date fair values of options granted in the years ended December 31, 2019, 2018, and 2017 were $3.85, $7.12, and $8.47 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2019, 2018, and 2017 were $1.3 million, $1.2 million, and $2.7 million, respectively. The fair value of options that vested during the years ended December 31, 2019, 2018, and 2017 were $4.3 million, $13.6 million, and $5.6 million, respectively. As of December 31, 2019, there was approximately $13.5 million of unrecognized compensation cost related to stock options under the Company’s 2014 Plan or made pursuant to the Inducement Award Program, which is expected to be recognized over a weighted average period of 2.83 years.

Performance-Based Stock Options

On December 12, 2018, pursuant to the Merger Agreement, each outstanding and unexercised performance-based option to acquire Keryx Shares granted under a Keryx equity plan converted into a service-based option or performance-based option to acquire Akebia Shares, with the number of shares and exercise price adjusted by the Exchange Multiplier. As a result, the Company issued 233,954 performance-based options related to the Merger. The Company did not have any performance based-options outstanding in fiscal year 2018 prior to the Merger. The Company did not issue any performance-based options during the year ended December 31, 2019 and 2018 besides those issued related to the Merger in 2018. As of December 31, 2019, the Company had 46,790 performance-based options outstanding. The potential range of shares issuable pursuant to the Company’s performance-based options range from 0% to 100% of the target shares based on financial measures. Performance-based options vest up to 50% upon achievement of performance condition and up to 50% one year following achievement of the performance condition.

The following table summarizes the Company’s performance-based option activity for the year ended December 31, 2019:

	Shares			Weighted-Average Exercise Price		Weighted-Average Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding, December 31, 2018		202,136		$	19.82		7.42	$	—
Granted		—		$	—
Exercised		—		$	—			$	—
Forfeited/cancelled		(155,346	)	$	21.04
Outstanding, December 31, 2019		46,790		$	15.77		6.83	$	—

The Company did not record any stock-based compensation expense related to performance-based options during 2019, 2018 and 2017. There were 46,790 performance-based options that vested during fiscal year 2019 and no performance-based options that vested during fiscal years 2018 or 2017. As of December 31, 2019, there were no unrecognized compensation costs related to performance-based stock options under the Company’s 2014 Plan.

Restricted Stock Units

On February 28, 2019, as part of the Company’s annual grant of equity, the Company issued 1,384,775 restricted stock units, or RSUs, to employees. In addition, the Company occasionally issues RSUs not in connection with the annual grant process to employees. On September 30, 2019, the Company issued 2,979,400 restricted stock units to employees. RSUs granted by the Company vest in one of the following ways: (i) 100% of each RSU grant vests on either the first or the third anniversary of the grant date, or (ii) one third of each RSU grant vests on the first, second and third anniversaries of the grant date, subject, in each case, to the individual’s continued service through the applicable vesting date, or (iii) 50% of each RSU grant vests on the first anniversary and 25% of each RSU grant vests in 6 months increment after the one year anniversary of the grant date. The expense recognized for these awards is based on the grant date fair value of the Company’s common stock multiplied by the number of units granted and recognized on a straight-line basis over the vesting period. The Company recorded approximately $6.2 million, $5.8 million and $2.0 million of stock-based compensation expense related to employee RSUs in 2019, 2018 and 2017, respectively.

On December 12, 2018, pursuant to the Merger Agreement, each Keryx Share that was subject to a Keryx restricted share award, other than those Keryx restricted shares that accelerated or lapsed as a result of the completion of the Merger, was converted into an RSU award of Akebia, covering the number of Akebia Shares determined in accordance with the Exchange Multiplier. As a result, the Company issued 486,709 service-based RSUs in substitution for Keryx restricted share awards in connection with the Merger. These RSUs vest either (i) in 3 equal annual installments beginning after the one-year anniversary of the grant date or (ii) one third on the one year anniversary of the grant date with the remaining RSUs vesting on the first day of each calendar quarter over the next two years thereafter.

A following table summarizes the Company’s RSU activity for the year ended December 31, 2019:

	Shares			Weighted- Average Grant Date Fair Value
Unvested balance, December 31, 2018		846,273		$	9.16
Granted		4,609,195		$	4.97
Vested		(323,136	)	$	8.32
Forfeited		(621,302	)	$	6.90
Unvested balance, December 31, 2019		4,511,030		$	5.25

The total amount of RSUs that vested during 2019, 2018 and 2018 (measured on the date of vesting) was $2.7 million, $7.4 million, and $0.2 million, respectively. As of December 31, 2019, there was approximately $17.8 million of unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted average period of 1.82 years.

There are 13,102 performance-based RSUs, issued in connection with the Merger, outstanding at December 31, 2019.

Employee Stock Purchase Plan

The first offering period under the ESPP opened on January 2, 2015. The Company issued 87,530 shares during the year ended December 31, 2019. The Company recorded approximately $0.3 million, $0.2 million and $0.2 million of stock-based compensation expense related to the ESPP during 2019, 2018 and 2017, respectively.

Compensation Expense Summary

The Company has classified its stock-based compensation expense related to share-based awards as follows:

	Years ended December 31,
	2019		2018		2017
	(in thousands)
Research and development	$	3,544	$	5,755	$	6,496
Selling, general and administrative		8,381		13,285		5,784
Total	$	11,925	$	19,040	$	12,280

Compensation expense by type of award:

	Years ended December 31,
	2019		2018		2017
	(in thousands)
Stock options	$	5,421	$	12,114	$	6,512
Restricted stock		—		—		158
Restricted stock units		6,240		6,731		2,021
Employee stock purchase plan		264		195		176
Warrant		—		—		3,413
Total	$	11,925	$	19,040	$	12,280

Included in the compensation expense of stock options and RSUs for the year ended December 31, 2018, is approximately $1.1 million related to awards assumed under the Merger and acceleration of the vesting for awards of certain officers of Keryx.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

The Company’s income tax provision was computed based on the federal statutory rate and the state statutory rates, net of the related federal benefit. There was no current or deferred income tax expense or benefit for the year ended December 31, 2017 due to the Company’s net losses and increases in its valuation allowance against its deferred tax assets. At December 31, 2018 the Company recorded a tax benefit of $28.3 million as a result of the Merger with Keryx. As part of purchase accounting, the Company recorded a deferred tax liability that is a source of income for which the Company can benefit from its tax attributes. The use of the Company’s tax attributes resulted in a release of the corresponding valuation allowance associated with this benefit. At December 31, 2019 the company has recorded an additional tax benefit of $6.6 million as a result of additional losses incurred during the year.

The provision for income taxes for each of the years ended December 31, 2019, 2018 and 2017 consisted of the following:

	Year ended December 31,
	2019			2018			2017
Current:
Federal		—			23			—
State		—			104			—
Foreign		—			—			—
Total Current:		—			127			—
Deferred:
Federal		—			(16,383	)		—
State		(6,631	)		(12,082	)		—
Foreign		—			—			—
Total Deferred:		(6,631	)		(28,465	)		—
Total Income Taxes		(6,631	)		(28,338	)		—

Our effective income tax rate differs from the statutory federal income tax rate as follows for the years ended December 31, 2019, 2018 and 2017:

	Year ended December 31,
	2019			2018			2017
Federal tax at statutory rate		21.0	%		21.0	%		34.0	%
State and local tax at statutory rate		5.5			4.1			3.8
Research and development tax credits		2.0			5.0			11.9
Equity compensation		—			—			(0.6	)
Alternative minimum tax		—			—			(1.3	)
Change in valuation allowance		(22.4	)		16.3			6.9
Impact of US tax reform		—			—			(54.7	)
Non-deductible transaction costs		—			(3.1	)		—
Other permanent differences		(0.3	)		(0.7	)		—
Reduction in deferred tax assets for change in ownership		(1.6	)		(26.1	)		—
Effect of rate changes		(1.4	)		—			—
Other		(0.5	)		—			—
Effective tax rate		2.3	%		16.5	%		0.0	%

For the year ended December 31, 2017, the Company had taxable income primarily due to timing differences. The income was fully offset with available net operating losses, or NOLs, for regular federal and state tax purposes. The Company did have a tax liability that was based on the Alternative Minimum Tax and resulted in approximately $0.8 million of Federal Tax, however due to tax reform, the amount is fully refundable through 2021 and thus the net result is that the Company recorded an income tax receivable of approximately $0.8 million rather than a tax expense for the year ended December 31, 2017.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets. Accordingly, the Company has recorded a valuation allowance against the Company’s otherwise recognizable net deferred tax assets. The Company continues to maintain the underlying tax benefits to offset future taxable income and to monitor the need for a valuation allowance based on the profitability of its future operations. The valuation allowance increased by approximately $64.0 million and $23.3 million, during the years ended December 31, 2019 and 2018, respectively. Significant components of the Company’s deferred tax assets and liabilities are as follows:

		December 31,
		2019			2018
	(in thousands)
Deferred tax assets:
Accrued expenses		$	2,933		$	4,993
Deferred revenue			18,678			28,533
Stock based compensation			10,136			9,514
Research and development credits			9,601			2,899
Other non-current liabilities			8,049			7,567
Net operating loss carryforward			242,167			189,842
ASC 842 lease liability			8,382			—
Fixed assets			806			—
Other			4,018			853
Total deferred tax assets			304,770			244,201
Less valuation allowance			(195,418	)		(131,424	)
Total deferred tax assets, net of valuation allowance			109,352			112,777
Deferred tax liabilities:
Fixed assets			—			(121	)
Intangible assets			(75,940	)		(81,847	)
Inventory			(25,494	)		(37,440	)
ASC 842 ROU asset			(7,495	)		—
Derivative liability			(423	)		—
Total deferred tax liabilities			(109,352	)		(119,408	)
Net deferred tax liability		$	—		$	(6,631	)

At December 31, 2019 and 2018, the Company has approximately $0.5 million (after amortization of $1.4 million) and $0.6 million (after amortization of $1.3 million), respectively, of start-up expenses capitalized for income tax purposes with amortization available to offset future federal, state and local income tax.

As of December 31, 2019 and 2018, the Company has approximately $1,014.8 million and $790.0 million, respectively, of federal NOL carry-forwards which expire through 2037. Included in the $1,014.8 million of federal NOLs are losses of $432.8 million that will carry forward indefinitely as a result of the Tax Cuts and Jobs Act. Additionally, at December 31, 2019 and 2018, the Company has approximately $1,374.0 million and $442.4 million, respectively, of state NOL carry-forwards which expired through 2039. The Company also has approximately $5.8 million of federal research and development tax credit carryforwards which expire through 2039 and $4.9 million of state research and development tax credit carryforwards which expire through 2038.

Under the provisions of the Internal Revenue Code, the net operating losses and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating losses and tax credit carryforwards may become subject to an annual limitation under Internal Revenue Code 382 and 383 if there is more than a 50% change in ownership of the stockholders that own 5% or more of the Company’s outstanding stock over a three-year period. The Company completed an evaluation of its ownership changes and concluded that an ownership change did occur on December 12, 2018 for both Akebia and Keryx in connection with the Merger. As a consequence of this ownership change, the Company’s NOL’s and tax credit carryforwards allocable to the tax periods preceding the ownership change became subject to limitation under Section 382. The Company reduced its associated deferred tax assets by $44.9 million as a result of the limitation.

The Company generated research credits but has not conducted a formal study to document its qualified activities. This study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the research and development credit carry-forwards and the valuation allowance.

The Company files income tax returns in the U.S. federal and various state and local jurisdictions. For federal and state income tax purposes, the 2018, 2017 and 2016 tax years remain open for examination under the normal three-year statute of limitations. The statute of limitations for income tax audits in the United States will commence upon utilization of net operating losses and will expire three years from the filing of the tax return the loss was utilized on.

There was no accrual for uncertain tax positions or for interest and penalties related to uncertain tax positions for 2019, 2018 and 2017. The Company does not believe that there will be a material change in its unrecognized tax positions over the next twelve months. All of the unrecognized tax benefits, if recognized, would be offset by the valuation allowance.

Employee Retirement Plan

12 Months Ended

Dec. 31, 2019

Compensation And Retirement Disclosure [Abstract]

Employee Retirement Plan

15. Employee Retirement Plan

During 2008, the Company established a retirement plan, or the Plan, authorized by Section 401(k) of the Internal Revenue Code. In accordance with the Plan, all employees who have attained the age of 21 are eligible to participate in the Plan as of the first Entry Date, as defined, following their date of employment. Each employee can contribute a percentage of compensation up to a maximum of the statutory limits per year. Company contributions are discretionary and contributions in the amount of approximately $1.3 million, $0.3 million and $0.2 million were made during the years ended December 31, 2019, 2018 and 2017, respectively.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

16. Commitments and Contingencies

Leases

The Company leases approximately 65,167 square feet of office and lab space in Cambridge, Massachusetts under a lease which was most recently amended in April 2018, collectively the Cambridge Lease. Under the Third Amendment to the Cambridge Lease, or the Third Amendment, executed in July 2016, total monthly lease payments under the initial base rent were approximately $242,000 and are subject to annual rent escalations. In addition to such annual rent escalations, base rent payments for a portion of said premises commenced on January 1, 2017 in the monthly amount of approximately $22,000. The Fourth Amendment to the Cambridge Lease, executed in May 2017, provided additional storage space to the Company and did not impact rent payments. In April 2018, the Company entered into a Fifth Amendment to the Cambridge Lease, or the Fifth Amendment, for an additional 19,805 square feet of office space on the 12^th floor. Monthly lease payments for the existing 45,362 square feet of office and lab space, under the Third Amendment, remain unchanged. The new space leased by the Company was delivered in September 2018 and additional monthly lease payments of approximately $135,000 commenced in February 2019 and are subject to annual rent escalations, which commenced in September 2019.

Additionally, as a result of the Merger, the Company now has a lease for 27,300 square feet of office space in Boston, Massachusetts, or the Boston Lease, which expires in February 2023. The total monthly lease payments under the base rent are approximately $136,000 and are subject to annual rent escalations.

The term of the Cambridge Lease with respect to the office space expires on September 11, 2026, with one five-year extension option available. The term of the Cambridge Lease with respect to the lab space expires on November 30, 2021, with an extension option for one additional period of two years. The term of the Boston Lease office space expires on February 28, 2023, with an extension option for one additional five-year extension option available. The renewal options in the Company’s real estate leases were not included in the calculation of the operating lease assets and operating lease liabilities as the renewal is not reasonably certain. The lease agreements do not contain residual value guarantees. Operating lease costs for the year ended December 31, 2019 were $6.6 million and cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2019 were $6.9 million.

In September 2019, Keryx entered into an agreement to sublease the Boston office space to Foundation Medicine, Inc., or Foundation. The sublease is subject and subordinate to the Boston Lease between Keryx and the landlord. The term of the sublease commenced on October 16, 2019, upon receipt of the required consent from the landlord for the sublease agreement, and expires on February 27, 2023. Foundation is obligated to pay Keryx rent that approximates the rent due from Keryx to its landlord with respect to the Boston Lease. Sublease rental income is recorded to other income. Keryx continues to be obligated for all payment terms pursuant to the Boston Lease, and the Company will guaranty Keryx’s obligations under the sublease. Keryx received $0.2 million in rent payments from Foundation during the year ended December 31, 2019.

The Company has not entered into any material short-term leases or financing leases as of December 31, 2019.

The total security deposit in connection with the Cambridge Lease is $1.6 million as of December 31, 2019. Additionally, the Company recorded $0.8 million for the security deposit under the Boston Lease. Both the Cambridge Lease and the Boston Lease have their security deposits in the form of a letter of credit, all of which are included in prepaid expenses and other current assets in the Company’s consolidated balance sheet as of December 31, 2019.

As of December 31, 2019, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter are as follows:

			Lease Payments
	Operating		to be Received		Net Operating
	Leases		from Sublease		Lease Payments
	(in thousands)
2020	$	6,568	$	1,769	$	4,799
2021		7,064		1,797		5,267
2022		6,735		1,824		4,911
2023		5,347		307		5,040
2024		5,116				5,116
Thereafter		8,818				8,818
Total	$	39,648	$	5,697	$	33,951

In arriving at the operating lease liabilities, the Company applied incremental borrowing rates ranging from 5.91% to 6.94%, which were based on the remaining lease term at the date of adoption of ASC 842. As of December 31, 2019, the remaining lease terms ranged from 1.92 years to 6.70 years. As of December 31, 2019, the following represents the difference between the remaining undiscounted minimum rental commitments under non-cancelable leases and the operating lease liabilities:

	Operating Leases
	(in thousands)
	Total
Undiscounted minimum rental commitments	$	39,648
Present value adjustment using incremental borrowing rate		(7,133	)
Operating lease liabilities	$	32,515

At December 31, 2018, the Company’s future minimum payments required under these leases are as follows:

	Operating
	Lease
	(in thousands)
2019	$	6,777
2020		7,008
2021		7,064
2022		6,735
2023		5,347
Thereafter		13,934
Total	$	46,865

The Company recorded approximately $3.7 million and $3.2 million in rent expense for the years ended December 31, 2018 and 2017, respectively.

Manufacturing Agreements

As part of the Merger, the Company retained Keryx’s commercial supply agreements with BioVectra and Siegfried Evionnaz SA, or Siegfried, to supply commercial drug substance for Auryxia.

Pursuant to the Manufacture and Supply Agreement with BioVectra and the Product Manufacture and Supply and Facility Construction Agreement with BioVectra, collectively the BioVectra Agreement, the Company has agreed to purchase a minimum quantity of drug substance of Auryxia at predetermined prices. The price per kilogram will decrease with an increase in quantity above the minimum purchase quantity. In addition, the BioVectra Agreement contained contingent milestone payments for capital developments in connection with construction of an expansion of the site of the BioVectra production facility for the manufacture of drug substance for Auryxia. These milestone payments were achieved by BioVectra and fully recorded prior to the Merger. These milestone payments are recorded in other assets and amortized into drug substance as inventory is released to the Company. The term of the BioVectra Agreement expires in late 2026, after which, it automatically renews for specified terms until terminated. The Company may terminate the BioVectra Agreement prior to the expiration of the contract term, which could result in early termination fee. As of December 31, 2019, the Company is required to purchase a minimum quantity of drug substance for Auryxia annually at a total cost of approximately $135.3 million through the end of the contract term.

As part of purchase accounting, the Company identified an executory contract in the BioVectra Agreement, which includes future firm purchase commitments. This executory contract was deemed to have an off-market element related to the amount of purchase commitments that exceed the current forecast. As a result, the Company recorded a liability of $29.5 million in purchase accounting, as of the acquisition date for the fair value of the off-market element. Through December 31, 2019, the Company recorded $0.7 million in accretion expense related to the present value discount associated with this liability.

Pursuant to the Siegfried Master Manufacturing Services and Supply Agreement, or the Siegfried Agreement, the Company has agreed to purchase a minimum quantity of drug substance of Auryxia at predetermined prices. The price per kilogram will decrease with an increase in quantity above the minimum purchase quantity. The term of the Siegfried Agreement expires on December 31, 2021, after which, it automatically renews for one-year terms until terminated. The Siegfried Agreement provides for certain termination rights prior to December 31, 2021 for the Company. As of December 31, 2019, the Company is required to purchase a minimum quantity of drug substance for Auryxia annually at a total cost of approximately $60.8 million through the year ending December 31, 2021.

On April 9, 2019, the Company entered into a Supply Agreement with Esteve Química, S.A., or Esteve, or the Esteve Agreement. The Esteve Agreement includes the terms and conditions under which Esteve will manufacture vadadustat drug substance, or API, for commercial use.

Pursuant to the Esteve Agreement, the Company shall provide rolling forecasts to Esteve on a quarterly basis, or the Forecast. The Forecast shall reflect the Company’s needs for API produced by Esteve over a certain number of months, represented as a quantity of API per calendar quarter. The parties have agreed to a volume-based pricing structure under the Esteve Agreement. The Esteve Agreement has an initial term of four years, beginning April 9, 2019 and ending April 9, 2023. Subsequent to December 31, 2019, the Company has a minimum commitment with Esteve for $5.8 million through the first quarter of 2021.

Other Third Party Contracts

Under the Company’s agreement with IQVIA to provide contract research organization services for the PRO₂TECT and INNO₂VATE programs, the total remaining contract costs as of December 31, 2019 were approximately $34.9 million, of which Otsuka reimburses a significant portion back to the Company. The estimated period of substantive performance for the committed work with IQVIA is through the end of 2020. The Company also contracts with various other organizations to conduct research and development activities with remaining contract costs to the Company of approximately $61.4 million at December 31, 2019. The scope of the services under these research and development contracts can be modified and the contracts cancelled by the Company upon written notice. In some instances, the contracts may be cancelled by the third party upon written notice.

Net Loss per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Net Loss per Share

17. Net Loss per Share

The shares in the table below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, due to their anti-dilutive effect:

	Year ended December 31,
	2019		2018		2017
Warrants		509,611		509,611		509,611
Outstanding stock options		7,670,899		8,346,888		3,660,014
Unvested restricted stock units		4,524,132		962,316		728,738
Total		12,704,642		9,818,815		4,898,363

Quarterly Results (unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (unaudited)

18. Quarterly Results (unaudited)

	Three Months Ended
	March 31,			June 30,			September 30,			December 31,
	2019			2019			2019			2019
	(in thousands, except per share data)
	(unaudited)
Product revenue, net	$	23,111		$	29,089		$	30,004		$	28,915
License, collaboration and other revenue	$	49,555		$	71,714		$	61,973		$	40,640
Cost of goods sold	$	31,257		$	37,669		$	38,263		$	38,147
Operating expenses	$	117,378		$	122,657		$	109,619		$	126,299
Loss from operations	$	(75,969	)	$	(59,523	)	$	(55,905	)	$	(94,891	)
Other income (expense), net	$	791		$	508		$	43		$	(1,344	)
Benefit for income taxes	$	(2,757	)	$	(845	)	$	(1,277	)	$	(1,752	)
Net loss	$	(72,421	)	$	(58,170	)	$	(54,585	)	$	(94,483	)
Net loss per share:
basic and diluted	$	(0.62	)	$	(0.49	)	$	(0.46	)	$	(0.79	)
Weighted-average number of common shares:
basic and diluted		117,063,352			118,268,832			118,863,063			119,358,081

	Three Months Ended
	March 31,			June 30,			September 30,			December 31,
	2018			2018			2018			2018
	(in thousands, except per share data)
				(unaudited)
Product revenue, net	$	—		$	—		$	—		$	6,824
License, collaboration and other revenue	$	45,930		$	48,793		$	53,169		$	53,026
Cost of goods sold	$	—		$	—		$	—		$	7,768
Operating expenses	$	70,428		$	84,455		$	81,012		$	142,240
Loss from operations	$	(24,498	)	$	(35,662	)	$	(27,843	)	$	(90,158	)
Other income, net	$	1,080		$	1,593		$	1,796		$	1,766
Benefit for income taxes	$	—		$	—		$	—		$	(28,338	)
Net loss	$	(23,418	)	$	(34,069	)	$	(26,047	)	$	(60,054	)
Net loss per share:
basic and diluted	$	(0.48	)	$	(0.60	)	$	(0.46	)	$	(0.87	)
Weighted-average number of common shares:
basic and diluted		48,613,565			56,890,295			57,027,598			69,404,187

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

New Accounting Pronouncements

Basis of Presentation

New Accounting Pronouncements – Recently Adopted

•

The Company will not reassess whether any contracts completed prior to the adoption are leases.

New Accounting Pronouncements – Not Yet Adopted

Segment Information

Derivative Financial Instruments

Use of Estimates

Cash, Cash Equivalents, and Restricted Cash

	December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2016
Cash and cash equivalents	$	147,449	$	104,644	$	70,156	$	187,335
Prepaid expenses and other current assets		263		—		—		—
Other assets		2,092		2,455		1,281		1,281
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	149,804	$	107,099	$	71,437	$	188,616

Investments

Accounts Receivable

Concentrations of Credit Risk and Off-Balance Sheet Risk

	Percent of Total Gross Revenues
	Years Ended December 31,
	2019			2018			2017
Otsuka Pharmaceutical Co. Ltd.		45	%		90	%		76	%
Fresenius Medical Care Rx		21	%		—			—
AmerisourceBergen Drug Corporation		10	%		—			—

	Percent of Gross Accounts Receivable
	As of December 31,
	2019			2018
Otsuka Pharmaceutical Co. Ltd. ⁽¹⁾		35	%		—
AmerisourceBergen Drug Corporation		16	%		11	%
Cardinal Health, Inc.		15	%		13	%
Fresenius Medical Care Rx ⁽²⁾		15	%		42	%
McKesson Corporation		11	%		22	%

⁽¹⁾

⁽²⁾

Property and Equipment

The following is the summary of property and equipment and related accumulated depreciation as of December 31, 2019 and 2018.

	Useful Life	December 31, 2019			December 31, 2018
		(in thousands)
Computer equipment and software	3	$	1,010		$	1,593
Furniture and fixtures	5-7		2,086			1,170
Equipment	7		2,451			1,780
Leasehold improvements	Shorter of the useful life or remaining lease term (10 years)		8,497			5,324
Office equipment under capital lease	3		—			114
			14,044			9,981
Less accumulated depreciation			(3,664	)		(1,958	)
Net property and equipment		$	10,380		$	8,023

Inventories

Inventory

Debt

Revenue Recognition

(i)

identify the contract(s) with a customer;

(ii)

identify the performance obligations in the contract;

(iii)

determine the transaction price;

(iv)

allocate the transaction price to the performance obligations in the contract; and

(v)

recognize revenue when (or as) the entity satisfies a performance obligation.

Product Revenue, Net

Reserves for Variable Consideration

Collaboration Revenues

Licenses of Intellectual Property

Milestone Payments

Manufacturing Supply Services

Royalties

Collaborative Arrangements

Business Combinations

Intangible Assets

The Company maintains a definite-lived intangible asset related to developed product rights for Auryxia, which was acquired on December 12, 2018 as part of the Merger.

Goodwill

Fair Value of Financial Instruments

•

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•

Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active, or for which all significant inputs are observable, either directly or indirectly.

•

Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.

Research and Development Costs

Advertising Expenses

Income Taxes

Stock-Based Compensation

Net Loss per Share

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Reconciliation of Cash, Cash Equivalents, and Restricted Cash

	December 31, 2019		December 31, 2018		December 31, 2017		December 31, 2016
Cash and cash equivalents	$	147,449	$	104,644	$	70,156	$	187,335
Prepaid expenses and other current assets		263		—		—		—
Other assets		2,092		2,455		1,281		1,281
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	149,804	$	107,099	$	71,437	$	188,616

Revenue and Gross Accounts Receivable By Major Customer

	Percent of Total Gross Revenues
	Years Ended December 31,
	2019			2018			2017
Otsuka Pharmaceutical Co. Ltd.		45	%		90	%		76	%
Fresenius Medical Care Rx		21	%		—			—
AmerisourceBergen Drug Corporation		10	%		—			—

	Percent of Gross Accounts Receivable
	As of December 31,
	2019			2018
Otsuka Pharmaceutical Co. Ltd. ⁽¹⁾		35	%		—
AmerisourceBergen Drug Corporation		16	%		11	%
Cardinal Health, Inc.		15	%		13	%
Fresenius Medical Care Rx ⁽²⁾		15	%		42	%
McKesson Corporation		11	%		22	%

⁽¹⁾

⁽²⁾

Summary of Property and Equipment and Related Accumulated Depreciation

The following is the summary of property and equipment and related accumulated depreciation as of December 31, 2019 and 2018.

	Useful Life	December 31, 2019			December 31, 2018
		(in thousands)
Computer equipment and software	3	$	1,010		$	1,593
Furniture and fixtures	5-7		2,086			1,170
Equipment	7		2,451			1,780
Leasehold improvements	Shorter of the useful life or remaining lease term (10 years)		8,497			5,324
Office equipment under capital lease	3		—			114
			14,044			9,981
Less accumulated depreciation			(3,664	)		(1,958	)
Net property and equipment		$	10,380		$	8,023

Product Revenue, Net (Tables)

12 Months Ended

Dec. 31, 2019

Revenue From Contract With Customer [Abstract]

Summary of Product Revenue Allowance and Reserve Categories

The following table summarizes activity in each of the product revenue allowance and reserve categories for the period from December 12, 2018 to December 31, 2018 and for the year ended December 31, 2019 (in thousands):

	Chargebacks and Discounts			Rebates, Fees and other Deductions			Returns			Total
Balance at December 12, 2018	$	466		$	21,247		$	418		$	22,131
Provisions related to sales		415			3,869			(58	)		4,226
Credits/payments made relating to sales		(365	)		(2,255	)		—			(2,620	)
Balance at December 31, 2018		516			22,861			360			23,737
Current provisions related to sales in current year		7,822			110,866			2,008			120,696
Adjustments related to prior year sales		—			1,149			—			1,149
Credits/payments made		(7,600	)		(104,324	)		(2,115	)		(114,039	)
Balance at December 31, 2019	$	738		$	30,552		$	253		$	31,543

License, Collaboration and Other Significant Agreements (Tables)

12 Months Ended

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Revenues Recognized From License, Collaboration and Other Significant Agreements

	For the Year Ended December 31,
	2019		2018		2017
License, Collaboration and Other Revenue:	(in thousands)
MTPC Agreement	$	10,000	$	9,281	$	42,918
Otsuka U.S. Agreement		131,314		103,870		85,971
Otsuka International Agreement		75,614		87,320		52,307
Total Proportional Performance Revenue	$	216,928	$	200,471	$	181,196
JT and Torii		5,882		112		—
MTPC Other Revenue		1,072		335		31
Total License, Collaboration and Other Revenue	$	223,882	$	200,918	$	181,227

Deferred Revenues Balance

	December 31, 2019
	Short-Term		Long-Term		Total
Deferred Revenue:	(in thousands)
Otsuka U.S. Agreement	$	23,530	$	20,641	$	44,171
Otsuka International Agreement		16,300		7,800		24,100
Vifor Agreement		—		4,679		4,679
Total	$	39,830	$	33,120	$	72,950

Schedule of Changes In Contract Assets and Liabilities

The following table presents changes in the Company’s contract assets and liabilities during the years ended December 31, 2019 and 2018 (in thousands):

	Balance at Beginning of Period		Additions		Deductions			Balance at End of Period
Twelve Months Ended December 31, 2019
Contract assets:
Other current assets	$	—	$	10,000	$	(10,000	)	$	—
Accounts receivable⁽¹⁾	$	1,587	$	172,614	$	(158,379	)	$	15,822
Contract liabilities:
Deferred revenue	$	112,689	$	167,189	$	(206,928	)	$	72,950
Accounts payable	$	13,492	$	—	$	(13,492	)	$	—

Twelve Months Ended December 31, 2018
Contract assets:
Other current assets	$	—	$	531	$	(531	)	$	—
Accounts receivable⁽¹⁾	$	34,186	$	146,267	$	(178,866	)	$	1,587
Contract liabilities:
Deferred revenue	$	179,624	$	133,537	$	(200,472	)	$	112,689
Accounts payable	$	—	$	17,919	$	(4,427	)	$	13,492

⁽¹⁾

Schedule of Revenue Recognized Resulting from Changes in Contract Asset and Contract Liability

	For the Year Ended December 31,
Revenue Recognized in the Period from:	2019		2018		2017
Amounts included in deferred revenue at the beginning of the period	$	80,634	$	137,726	$	124,454
Performance obligations satisfied in previous periods	$	45,592	$	6,659	$	275

Business Combination (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Summary of Total Fair Value Consideration

Fair value of 57,773,090 Akebia Shares	$	516,492
Fair value of 602,752 Akebia RSUs		304
Fair value of 3,967,290 Akebia stock options		10,958
Total consideration	$	527,754

Summary of Purchase Price of Identifiable Assets Acquired and Liabilities Assumed

Cash and cash equivalents	$	5,257
Inventory		235,597
Trade accounts receivable, net		15,834
Prepaid expenses and other current assets		8,399
Goodwill		55,053
Intangible assets:
Developed product rights for Auryxia		329,130
Other intangible assets		545
Property and equipment, net		3,646
Other assets		14,441
Accounts payable		(17,570	)
Accrued expenses		(42,972	)
Deferred tax liability		(35,096	)
Debt		(15,000	)
Fair value of unfavorable executory contract		(29,510	)
Total purchase price	$	527,754

Available for Sale Securities (Tables)

12 Months Ended

Dec. 31, 2019

Investments Debt And Equity Securities [Abstract]

Summary of Available for Sale Securities at Fair Value

Available for sale securities at December 31, 2019 and 2018 consist of the following:

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses		Fair Value
	(in thousands)
December 31, 2019
Cash and cash equivalents	$	147,449	$	—	$	—	$	147,449
Available for sale securities:
Certificates of deposit	$	245	—		—		$	245
Total available for sale securities	$	245	$	—	$	—	$	245
Total cash, cash equivalents, and available for sale securities	$	147,694	$	—	$	—	$	147,694

			Gross		Gross
			Unrealized		Unrealized
	Amortized Cost		Gains		Losses			Fair Value
	(in thousands)
December 31, 2018
Cash and cash equivalents	$	104,644	$	—	$	—		$	104,644
Available for sale securities:
Certificates of deposit	$	245	—			—		$	245
U.S. government debt securities		158,518		1		(198	)		158,321
Corporate debt securities		58,494	—			(64	)		58,430
Total available for sale securities	$	217,257	$	1	$	(262	)	$	216,996
Total cash, cash equivalents, and available for sale securities	$	321,901	$	1	$	(262	)	$	321,640

Estimated Fair Value of Available for Sale Securities by Contractual Maturity

The estimated fair value of the Company’s available for sale securities balance at December 31, 2019, by contractual maturity, is as follows (in thousands):

Due in one year or less	$	245
Due after one year		—
Total available for sale securities	$	245

Summary of Available for Sale Securities that were in Continuous Unrealized Loss Position

The following table summarizes the Company’s available for sale securities that were in a continuous unrealized loss position, but were not deemed to be other-than-temporarily impaired, as of December 31, 2018:

	Unrealized Loss for Less Than 12 Months					Unrealized Loss for 12 Months or More					Total
	Gross					Gross					Gross
	Unrealized			Estimated		Unrealized			Estimated		Unrealized			Estimated
	Losses			Fair Value		Losses			Fair Value		Losses			Fair Value
	(in thousands)
December 31, 2018
Available for sale securities:
U.S. government debt securities	$	(159	)	$	116,026	$	(39	)	$	29,934	$	(198	)	$	145,960
Corporate debt securities		(64	)		58,430		—			—		(64	)		58,430
Total	$	(223	)	$	174,456	$	(39	)	$	29,934	$	(262	)	$	204,390

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Assets Measured or Disclosed at Fair Value on Recurring Basis

Assets measured or disclosed at fair value on a recurring basis as of December 31, 2019 and 2018 are summarized below:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(in thousands)
December 31, 2019
Assets:
Cash and cash equivalents	$	147,449	$	—	$	—	$	147,449
Certificates of deposit		—		245		—		245
	$	147,449	$	245	$	—	$	147,694

Liabilities:
Derivative liability	$	—	$	—	$	1,650	$	1,650
	$	—	$	—	$	1,650	$	1,650

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
	(in thousands)
December 31, 2018
Assets:
Cash and cash equivalents	$	104,644	$	—	$	—	$	104,644
Certificates of deposit		—		245		—		245
U.S. government debt securities		—		158,321		—		158,321
Corporate debt securities		—		58,430		—		58,430
	$	104,644	$	216,996	$	—	$	321,640

Inventory (Tables)

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Components of Inventory

The components of inventory, inclusive of step-up as a result of bringing Keryx’s inventory onto Akebia’s books in connection with the Merger, are summarized as follows:

	December 31, 2019		December 31, 2018
	(in thousands)
Raw materials	$	2,278	$	1,880
Work in process		137,858		215,122
Finished goods		42,096		18,182
Total inventory	$	182,232	$	235,184

Long-term inventory, which primarily consists of raw materials and work in process, is included in other assets in the Company’s consolidated balance sheets.

	December 31, 2019		December 31, 2018
	(in thousands)
Balance Sheet Classification:
Inventory	$	116,349	$	114,245
Other assets		65,883		120,939
Total inventory	$	182,232	$	235,184

Intangible Assets and Goodwill (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

The following table presents the Company’s intangible assets (in thousands):

	December 31, 2019
	Gross Carrying Value		Accumulated Amortization			ASC 842 Adjustment			Total		Estimated useful life
Acquired intangible assets:
Developed product rights for Auryxia	$	329,130	$	(37,918	)	$	—		$	291,212	9 Years
Favorable lease		545		(5	)		(540	)		-	N/A
Total	$	329,675	$	(37,923	)	$	(540	)	$	291,212

	December 31, 2018
	Gross Carrying Value		Accumulated Amortization			Total		Estimated useful life
Acquired intangible assets:
Developed product rights for Auryxia	$	329,130	$	(1,517	)	$	327,613	9 Years
Favorable lease		545		(5	)		540	4 years
Total	$	329,675	$	(1,522	)	$	328,153

Schedule of Estimated Future Amortization Expense for Intangible Assets

Estimated future amortization expense for the intangible asset as of December 31, 2019 is as follows

	Total
2020	$	36,402
2021		36,401
2022		36,402
2023		36,401
2024		36,402
Thereafter		109,204
	$	291,212

Schedule of Goodwill

Goodwill was $55.1 million as of December 31, 2019 and 2018, derived as follows (in thousands):

Total Merger consideration	$	527,754
Less: Fair value of identified acquired assets and liabilities, net		(472,701	)
Goodwill	$	55,053

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2019

Payables And Accruals [Abstract]

Components of Accrued Expenses

Accrued expenses are as follows:

	December 31, 2019		December 31, 2018
	(in thousands)
Accrued clinical	$	61,815	$	71,881
Product revenue allowances		30,552		22,861
Accrued payroll		12,604		12,880
Lease liability		4,989		—
Professional fees		3,444		2,367
Royalties		2,713		2,430
Accrued commercial manufacturing		2,680		6,383
Accrued severance		725		3,962
Merger costs		—		16,071
Accrued other		9,549		12,082
Total accrued expenses	$	129,071	$	150,917

Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Schedule of Future Principal Payments on the Term Loans

Future principal payments on the Term Loans (as defined below) as of December 31, 2019 are as follows (in thousands):

	Principal
	Payments
	(in thousands)
2020	$	—
2021		—
2022		7,140
2023		30,354
2024		42,506
Thereafter		—
Total before unamortized discount and issuance costs		80,000
Less: unamortized discount and issuance costs		(4,195	)
Total term loans	$	75,805

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Reserved Shares of Common Stock for Future Issuance

The Company has reserved for future issuance the following number of shares of common stock:

	December 31, 2019		December 31, 2018
Common stock options and RSUs outstanding ⁽¹⁾		12,195,031		9,309,204
Shares available for issuance under Akebia equity plans ⁽²⁾		2,983,256		4,526,563
Warrant to purchase common stock		509,611		509,611
Shares available for issuance under the ESPP ⁽³⁾		5,715,992		603,522
Total		21,403,890		14,948,900

⁽¹⁾	Includes awards granted under the 2014 Plan and the Inducement Award Program and awards issued in connection with the Merger.

⁽²⁾

⁽³⁾

Schedule of Assumptions Used in Black-Scholes Option Pricing Model

The assumptions used in the Black-Scholes pricing model to estimate the grant date fair value of options granted under the 2014 Plan are as follows:

	Year ended December 31,
	2019	2018	2017
Risk-free interest rate	1.42% - 2.57%	2.54% - 3.01%	1.81% - 2.27%
Dividend yield	0.00%	0.00%	0.00%
Volatility	61.40% - 64.10%	61.65% - 77.04%	78.57% - 85.81%
Expected term (years)	5.51 - 6.25	5.51 - 6.25	5.51 - 6.25

Schedule of Stock Option Activity

The following table summarizes the Company’s stock option activity, excluding performance-based options, for the year ended December 31, 2019:

	Shares			Weighted-Average Exercise Price		Weighted-Average Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding, December 31, 2018		8,144,752		$	13.57			$	2,351,316
Granted		3,714,825		$	6.38
Exercised		(362,796	)	$	1.54			$	1,273,757
Forfeited		(3,842,588	)	$	15.26			$	67,753
Expired/cancelled		(30,084	)	$	18.09
Outstanding, December 31, 2019		7,624,109		$	9.77		7.84	$	3,173,101
Options exercisable, December 31, 2019		3,759,075		$	12.74		6.45	$	983,273
Vested and expected to vest, December 31, 2019		7,624,109		$	9.77

Schedule of Performance-based Option Activity

The following table summarizes the Company’s performance-based option activity for the year ended December 31, 2019:

	Shares			Weighted-Average Exercise Price		Weighted-Average Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding, December 31, 2018		202,136		$	19.82		7.42	$	—
Granted		—		$	—
Exercised		—		$	—			$	—
Forfeited/cancelled		(155,346	)	$	21.04
Outstanding, December 31, 2019		46,790		$	15.77		6.83	$	—

Stock-Based Compensation Expense Related to Share-Based Awards

The Company has classified its stock-based compensation expense related to share-based awards as follows:

	Years ended December 31,
	2019		2018		2017
	(in thousands)
Research and development	$	3,544	$	5,755	$	6,496
Selling, general and administrative		8,381		13,285		5,784
Total	$	11,925	$	19,040	$	12,280

Schedule of Compensation Expense by Type of Award

Compensation expense by type of award:

	Years ended December 31,
	2019		2018		2017
	(in thousands)
Stock options	$	5,421	$	12,114	$	6,512
Restricted stock		—		—		158
Restricted stock units		6,240		6,731		2,021
Employee stock purchase plan		264		195		176
Warrant		—		—		3,413
Total	$	11,925	$	19,040	$	12,280

Restricted Stock Units

Schedule of Restricted Stock Activity

A following table summarizes the Company’s RSU activity for the year ended December 31, 2019:

	Shares			Weighted- Average Grant Date Fair Value
Unvested balance, December 31, 2018		846,273		$	9.16
Granted		4,609,195		$	4.97
Vested		(323,136	)	$	8.32
Forfeited		(621,302	)	$	6.90
Unvested balance, December 31, 2019		4,511,030		$	5.25

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

The provision for income taxes for each of the years ended December 31, 2019, 2018 and 2017 consisted of the following:

	Year ended December 31,
	2019			2018			2017
Current:
Federal		—			23			—
State		—			104			—
Foreign		—			—			—
Total Current:		—			127			—
Deferred:
Federal		—			(16,383	)		—
State		(6,631	)		(12,082	)		—
Foreign		—			—			—
Total Deferred:		(6,631	)		(28,465	)		—
Total Income Taxes		(6,631	)		(28,338	)		—

Schedule of Effective Income Tax Rate Differs From Statutory Federal Income Tax Rate

Our effective income tax rate differs from the statutory federal income tax rate as follows for the years ended December 31, 2019, 2018 and 2017:

	Year ended December 31,
	2019			2018			2017
Federal tax at statutory rate		21.0	%		21.0	%		34.0	%
State and local tax at statutory rate		5.5			4.1			3.8
Research and development tax credits		2.0			5.0			11.9
Equity compensation		—			—			(0.6	)
Alternative minimum tax		—			—			(1.3	)
Change in valuation allowance		(22.4	)		16.3			6.9
Impact of US tax reform		—			—			(54.7	)
Non-deductible transaction costs		—			(3.1	)		—
Other permanent differences		(0.3	)		(0.7	)		—
Reduction in deferred tax assets for change in ownership		(1.6	)		(26.1	)		—
Effect of rate changes		(1.4	)		—			—
Other		(0.5	)		—			—
Effective tax rate		2.3	%		16.5	%		0.0	%

Schedule of Significant Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities are as follows:

		December 31,
		2019			2018
	(in thousands)
Deferred tax assets:
Accrued expenses		$	2,933		$	4,993
Deferred revenue			18,678			28,533
Stock based compensation			10,136			9,514
Research and development credits			9,601			2,899
Other non-current liabilities			8,049			7,567
Net operating loss carryforward			242,167			189,842
ASC 842 lease liability			8,382			—
Fixed assets			806			—
Other			4,018			853
Total deferred tax assets			304,770			244,201
Less valuation allowance			(195,418	)		(131,424	)
Total deferred tax assets, net of valuation allowance			109,352			112,777
Deferred tax liabilities:
Fixed assets			—			(121	)
Intangible assets			(75,940	)		(81,847	)
Inventory			(25,494	)		(37,440	)
ASC 842 ROU asset			(7,495	)		—
Derivative liability			(423	)		—
Total deferred tax liabilities			(109,352	)		(119,408	)
Net deferred tax liability		$	—		$	(6,631	)

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Schedule of Undiscounted Minimum Rental Commitments Under Non-cancelable Leases

As of December 31, 2019, undiscounted minimum rental commitments under non-cancelable leases, for each of the next five years and total thereafter are as follows:

			Lease Payments
	Operating		to be Received		Net Operating
	Leases		from Sublease		Lease Payments
	(in thousands)
2020	$	6,568	$	1,769	$	4,799
2021		7,064		1,797		5,267
2022		6,735		1,824		4,911
2023		5,347		307		5,040
2024		5,116				5,116
Thereafter		8,818				8,818
Total	$	39,648	$	5,697	$	33,951

Schedule of Difference Between Undiscounted Minimum Rental Commitments Under Non-cancelable Leases and Operating Leases Liabilities

As of December 31, 2019, the following represents the difference between the remaining undiscounted minimum rental commitments under non-cancelable leases and the operating lease liabilities:

	Operating Leases
	(in thousands)
	Total
Undiscounted minimum rental commitments	$	39,648
Present value adjustment using incremental borrowing rate		(7,133	)
Operating lease liabilities	$	32,515

Schedule of Future Minimum Payments Required Under Leases

At December 31, 2018, the Company’s future minimum payments required under these leases are as follows:

	Operating
	Lease
	(in thousands)
2019	$	6,777
2020		7,008
2021		7,064
2022		6,735
2023		5,347
Thereafter		13,934
Total	$	46,865

Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Anti-Dilutive Securities Excluded from Calculation of Diluted Net Loss per Share

The shares in the table below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, due to their anti-dilutive effect:

	Year ended December 31,
	2019		2018		2017
Warrants		509,611		509,611		509,611
Outstanding stock options		7,670,899		8,346,888		3,660,014
Unvested restricted stock units		4,524,132		962,316		728,738
Total		12,704,642		9,818,815		4,898,363

Quarterly Results (unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Results

	Three Months Ended
	March 31,			June 30,			September 30,			December 31,
	2019			2019			2019			2019
	(in thousands, except per share data)
	(unaudited)
Product revenue, net	$	23,111		$	29,089		$	30,004		$	28,915
License, collaboration and other revenue	$	49,555		$	71,714		$	61,973		$	40,640
Cost of goods sold	$	31,257		$	37,669		$	38,263		$	38,147
Operating expenses	$	117,378		$	122,657		$	109,619		$	126,299
Loss from operations	$	(75,969	)	$	(59,523	)	$	(55,905	)	$	(94,891	)
Other income (expense), net	$	791		$	508		$	43		$	(1,344	)
Benefit for income taxes	$	(2,757	)	$	(845	)	$	(1,277	)	$	(1,752	)
Net loss	$	(72,421	)	$	(58,170	)	$	(54,585	)	$	(94,483	)
Net loss per share:
basic and diluted	$	(0.62	)	$	(0.49	)	$	(0.46	)	$	(0.79	)
Weighted-average number of common shares:
basic and diluted		117,063,352			118,268,832			118,863,063			119,358,081

	Three Months Ended
	March 31,			June 30,			September 30,			December 31,
	2018			2018			2018			2018
	(in thousands, except per share data)
				(unaudited)
Product revenue, net	$	—		$	—		$	—		$	6,824
License, collaboration and other revenue	$	45,930		$	48,793		$	53,169		$	53,026
Cost of goods sold	$	—		$	—		$	—		$	7,768
Operating expenses	$	70,428		$	84,455		$	81,012		$	142,240
Loss from operations	$	(24,498	)	$	(35,662	)	$	(27,843	)	$	(90,158	)
Other income, net	$	1,080		$	1,593		$	1,796		$	1,766
Benefit for income taxes	$	—		$	—		$	—		$	(28,338	)
Net loss	$	(23,418	)	$	(34,069	)	$	(26,047	)	$	(60,054	)
Net loss per share:
basic and diluted	$	(0.48	)	$	(0.60	)	$	(0.46	)	$	(0.87	)
Weighted-average number of common shares:
basic and diluted		48,613,565			56,890,295			57,027,598			69,404,187

Nature of Organization and Operations - Additional Information (Details)			1 Months Ended						6 Months Ended	12 Months Ended			32 Months Ended	156 Months Ended
	Nov. 11, 2019 USD ($)	Dec. 12, 2018 shares	Feb. 04, 2020 USD ($) shares	Mar. 31, 2018 shares	Apr. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jun. 30, 2019 shares	Dec. 31, 2019 USD ($) Patient shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2019 USD ($) shares
Nature Of Organization And Operations [Line Items]
Line of credit, maximum borrowing capacity											$ 40,000,000		$ 40,000,000
Proceeds from sale of equity														$ 494,600,000
Proceeds from issuance of public offering										$ 25,785,000	$ 95,452,000	$ 114,580,000
Proceeds from the issuance of debt, net										$ 77,668,000
Number of months for operating plan sufficiently funded by cash resources										12 months
At The Market Equity Offering Program \| Subsequent Event
Nature Of Organization And Operations [Line Items]
Proceeds from sale of stock			$ 56,700,000
Common Stock
Nature Of Organization And Operations [Line Items]
Issuance of common stock, net of issuance costs, shares \| shares										4,068,912	9,194,306	8,672,270
Common Stock \| At The Market Equity Offering Program
Nature Of Organization And Operations [Line Items]
Issuance of common stock, net of issuance costs, shares \| shares									1,384,520	2,684,392	694,306		1,775,214
Common Stock \| At The Market Equity Offering Program \| Subsequent Event
Nature Of Organization And Operations [Line Items]
Issuance of common stock, net of issuance costs, shares \| shares			7,973,967
Follow-on public offering
Nature Of Organization And Operations [Line Items]
Proceeds from issuance of public offering														377,400,000
Follow-on public offering \| Cantor Fitzgerald & Co
Nature Of Organization And Operations [Line Items]
Proceeds from issuance of public offering														$ 67,200,000
Follow-on public offering \| Common Stock
Nature Of Organization And Operations [Line Items]
Issuance of common stock, net of issuance costs, shares \| shares				8,500,000
Vifor Pharma \| Common Stock
Nature Of Organization And Operations [Line Items]
Issuance of common stock, net of issuance costs, shares \| shares														3,571,429
Otsuka Pharmaceutical Co. Ltd. and Mitsubishi Tanabe Pharma Corporation
Nature Of Organization And Operations [Line Items]
Minimum committed amount in cost share funding and license payments under collaboration agreements											$ 573,000,000
Amount received from cost-share funding and license payments											$ 272,000,000
Merger Agreement \| Keryx
Nature Of Organization And Operations [Line Items]
Issued and outstanding cancelled, converted common stock		0.37433
Number of shares cancelled and converted in merger, shares issued \| shares		59,270,410
Protect and Innovate
Nature Of Organization And Operations [Line Items]
Number of patients \| Patient										7,436
Development and Commercialize Collaboration Agreement \| Mitsubishi Tanabe Pharma Corporation
Nature Of Organization And Operations [Line Items]
Collaborative arrangement right description										In December 2015, the Company entered into a collaboration agreement with Mitsubishi Tanabe Pharma Corporation, or MTPC, to develop and commercialize vadadustat in Japan and certain other countries in Asia, collectively, the MTPC Territory, for total payments of up to $245.0 million, comprised of a $20.0 million upfront payment, up to $50.0 million in specified development and regulatory milestones, and up to $175.0 million in specified commercial milestones, as well as tiered double-digit royalty payments up to 20% on sales of vadadustat in the MTPC Territory, subject to a reduction upon launch of a generic product on a country-by-country basis (Note 4).
Upfront cash payment received								$ 20,000,000		$ 20,000,000
Development and Commercialize Collaboration Agreement \| Mitsubishi Tanabe Pharma Corporation \| Maximum
Nature Of Organization And Operations [Line Items]
Milestone revenue								245,000,000
Additional milestone payments development costs fund								$ 50,000,000
Royalty payment percentage								20.00%
Development and Commercialize Collaboration Agreement \| Mitsubishi Tanabe Pharma Corporation \| Commercial Milestone Payments
Nature Of Organization And Operations [Line Items]
Milestone revenue								$ 175,000,000
Development and Commercialize Collaboration Agreement \| Mitsubishi Tanabe Pharma Corporation \| Commercial Milestone Payments \| Maximum
Nature Of Organization And Operations [Line Items]
Milestone revenue										$ 175,000,000
Development and Commercialize Collaboration and License Agreement \| Otsuka Pharmaceutical Company. Ltd.
Nature Of Organization And Operations [Line Items]
Upfront cash payment received					$ 73,000,000		$ 125,000,000
Development and Commercialize Collaboration and License Agreement \| Otsuka Pharmaceutical Company. Ltd. \| Global Development Plan
Nature Of Organization And Operations [Line Items]
Reimbursement for Otsuka's share of costs previously incurred					200,000	$ 33,800,000
Development and Commercialize Collaboration and License Agreement \| Otsuka Pharmaceutical Company. Ltd. \| Minimum \| Global Development Plan
Nature Of Organization And Operations [Line Items]
Collaborative arrangements cost sharing payments					214,000,000		266,800,000
Development and Commercialize Collaboration and License Agreement \| Otsuka Pharmaceutical Company. Ltd. \| Potential Development and Commercialization Milestones \| Maximum
Nature Of Organization And Operations [Line Items]
Milestone revenue					132,000,000		190,000,000
Development and Commercialize Collaboration and License Agreement \| Otsuka Pharmaceutical Company. Ltd. \| Potential Commercial Milestone Payments \| Maximum
Nature Of Organization And Operations [Line Items]
Milestone revenue					$ 525,000,000		$ 575,000,000
License Agreement \| Vifor Pharma
Nature Of Organization And Operations [Line Items]
Proceeds from sale of stock														$ 50,000,000
Term Loan \| Collateral Agent, Pharmakon \| Tranche A
Nature Of Organization And Operations [Line Items]
Proceeds from the issuance of debt, net	$ 77,300,000
Keryx \| Term Loan \| Collateral Agent, Pharmakon \| Biopharma Credit Investments V (Master) LP
Nature Of Organization And Operations [Line Items]
Line of credit, maximum borrowing capacity	100,000,000
Keryx \| Term Loan \| Collateral Agent, Pharmakon \| Biopharma Credit Investments V (Master) LP \| Tranche A
Nature Of Organization And Operations [Line Items]
Line of credit, maximum borrowing capacity	$ 80,000,000
Date to draw amount under credit facility	Nov. 25, 2019
Keryx \| Term Loan \| Collateral Agent, Pharmakon \| Biopharma Credit Investments V (Master) LP \| Tranche B
Nature Of Organization And Operations [Line Items]
Line of credit, maximum borrowing capacity	$ 20,000,000
Last date to draw amount under credit facility	Dec. 31, 2020									Dec. 31, 2020

Summary of Significant Accounting Policies - Additional Information (Details)		12 Months Ended
	Jan. 01, 2019 USD ($)	Dec. 31, 2019 USD ($) Segment	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Additional operating lease liabilities, net of deferred rent		$ 32,515,000
Operating lease, right-of-use asset		29,038,000
Prepaid expenses and other current assets		$ 6,626,000	$ 15,724,000
Number of operating segments \| Segment		1
Allowance for doubtful accounts		$ 0	0
Depreciation expense		$ 2,200,000	900,000	$ 600,000
Intangible assets, estimated useful life		9 years
Remeasurements to property and equipment		$ 0
Significant uncertain tax positions		$ 0	0
Expected dividend yield		0.00%
Selling, General, and Administrative Expenses
Summary Of Significant Accounting Policies [Line Items]
Advertising expenses		$ 6,000,000	500,000	$ 0
Fair Value, Inputs, Level 3
Summary Of Significant Accounting Policies [Line Items]
Assets impairments charges		0	0
Otsuka U.S. Agreement
Summary Of Significant Accounting Policies [Line Items]
Cost share costs for license agreement		1,800,000	1,200,000
Reimbursable by Otsuka		700,000	500,000
Cost share costs by partner for license agreement		1,900,000	1,100,000
Reimbursable to Otsuka		$ 1,000,000	$ 500,000
Minimum
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, Useful life		3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, Useful life		7 years
Gross Revenues \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage		10.00%
Accounts Receivable \| Customer Concentration Risk
Summary Of Significant Accounting Policies [Line Items]
Concentration risk percentage		10.00%
ASC 842
Summary Of Significant Accounting Policies [Line Items]
Cumulative effect of adoption in retained earnings	$ 0
Additional operating lease liabilities, net of deferred rent	37,100,000
Operating lease, right-of-use asset	33,400,000
Prepaid expenses and other current assets	$ 900,000

Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Summary Of Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 147,449	$ 104,644	$ 70,156	$ 187,335
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	149,804	107,099	71,437	188,616
Prepaid Expenses and Other Current Assets
Summary Of Significant Accounting Policies [Line Items]
Restricted cash, current	263
Other Assets
Summary Of Significant Accounting Policies [Line Items]
Restricted cash, noncurrent	$ 2,092	$ 2,455	$ 1,281	$ 1,281

Summary of Significant Accounting Policies - Revenue and Gross Accounts Receivable By Major Customer (Details) - Customer Concentration Risk

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Percent of Total Gross Revenues

Percent of Total Gross Revenues | Otsuka Pharmaceutical Company. Ltd.

10.00%

Percent of Total Gross Revenues | Fresenius Medical Care Rx

45.00%

90.00%

76.00%

Percent of Total Gross Revenues | AmerisourceBergen Drug Corporation

21.00%

Percent of Gross Accounts Receivable

10.00%

Percent of Gross Accounts Receivable | Otsuka Pharmaceutical Company. Ltd.

10.00%

Percent of Gross Accounts Receivable | Fresenius Medical Care Rx

35.00%

^[1]

10.00%

Percent of Gross Accounts Receivable | AmerisourceBergen Drug Corporation

^[2]

15.00%

42.00%

Percent of Gross Accounts Receivable | McKesson Corporation

16.00%

11.00%

Percent of Gross Accounts Receivable | Cardinal Health, Inc.

11.00%

22.00%

15.00%

13.00%

[1]	Accounts receivable from Otsuka Pharmaceutical Co. Ltd. did not represent greater than 10% of gross accounts receivable at December 31, 2018 due to timing of payments and costs incurred. As such, the Company did not have an accounts receivable balance for Otsuka as of December 31, 2018.
[2]	The change in accounts receivable for Fresenius Medical Care Rx as of December 31, 2018 to December 31, 2019 was due to timing of payments received. Fresenius was the Company’s largest commercial customer in 2019 by total gross revenue, as seen in the Percent of Total Gross Revenues table above.

Summary of Significant Accounting Policies - Revenue and Gross Accounts Receivable By Major Customer (Parenthetical) (Details) - Accounts Receivable - Customer Concentration Risk

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Otsuka Pharmaceutical Company. Ltd.

10.00%

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

35.00%

^[1]

10.00%

[1]	Accounts receivable from Otsuka Pharmaceutical Co. Ltd. did not represent greater than 10% of gross accounts receivable at December 31, 2018 due to timing of payments and costs incurred. As such, the Company did not have an accounts receivable balance for Otsuka as of December 31, 2018.

Summary of Significant Accounting Policies - Summary of Property and Equipment and Related Accumulated Depreciation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Gross property, plant and equipment	$ 14,044	$ 9,981
Less accumulated depreciation	(3,664)	(1,958)
Net property and equipment	$ 10,380	8,023
Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	3 years
Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	7 years
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	3 years
Gross property, plant and equipment	$ 1,010	1,593
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Gross property, plant and equipment	$ 2,086	1,170
Furniture and fixtures \| Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	5 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	7 years
Equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	7 years
Gross property, plant and equipment	$ 2,451	1,780
Leasehold improvements
Property, Plant and Equipment [Line Items]
Leasehold improvements, Useful Life	Shorter of the useful life or remaining lease term (10 years)
Gross property, plant and equipment	$ 8,497	5,324
Leasehold improvements \| Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	10 years
Office equipment under capital lease
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Useful life	3 years
Gross property, plant and equipment		$ 114

Product Revenue, Net - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended					12 Months Ended
	Dec. 31, 2018	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disaggregation Of Revenue [Line Items]
Total revenues							$ 335,001	$ 207,742	$ 181,227
Product Revenue, Net
Disaggregation Of Revenue [Line Items]
Total revenues	$ 6,800	$ 28,915	$ 30,004	$ 29,089	$ 23,111	$ 6,824	111,119	6,824
Accounts receivable, net	$ 15,100	$ 23,000				$ 15,100	$ 23,000	$ 15,100

Product Revenue, Net - Summary of Product Revenue Allowance and Reserve Categories (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2019
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 12, 2018	$ 22,131	$ 23,737
Provisions related to sales	4,226	120,696
Adjustments related to prior year sales		1,149
Credits/payments made relating to sales	(2,620)	(114,039)
Balance at December 31, 2018	23,737	31,543
Chargebacks and Discounts
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 12, 2018	466	516
Provisions related to sales	415	7,822
Credits/payments made relating to sales	(365)	(7,600)
Balance at December 31, 2018	516	738
Rebates, Fees and other Deductions
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 12, 2018	21,247	22,861
Provisions related to sales	3,869	110,866
Adjustments related to prior year sales		1,149
Credits/payments made relating to sales	(2,255)	(104,324)
Balance at December 31, 2018	22,861	30,552
Returns
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 12, 2018	418	360
Provisions related to sales	(58)	2,008
Credits/payments made relating to sales		(2,115)
Balance at December 31, 2018	$ 360	$ 253

License, Collaboration and Other Significant Agreements - Revenues Recognized From License, Collaboration and Other Significant Agreements (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue									$ 335,001	$ 207,742	$ 181,227
License, Collaboration and Other Revenue
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue	$ 40,640	$ 61,973	$ 71,714	$ 49,555	$ 53,026	$ 53,169	$ 48,793	$ 45,930	223,882	200,918	181,227
License, Collaboration and Other Revenue \| Mitsubishi Tanabe Pharma Corporation
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue									10,000	9,281	42,918
License, Collaboration and Other Revenue \| Otsuka Pharmaceutical Company. Ltd. \| Development and Commercialize United States Collaboration and License Agreement
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue									131,314	103,870	85,971
License, Collaboration and Other Revenue \| Otsuka Pharmaceutical Company. Ltd. \| Development and Commercialize International Collaboration and License Agreement
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue									75,614	87,320	52,307
License, Collaboration and Other Revenue \| Mitsubishi Tanabe Pharma Corporation and Otsuka Pharmaceutical Company Limited
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue									216,928	200,471	181,196
License, Collaboration and Other Revenue \| Japan Tobacco Incorporation and Torii Pharmaceutical Company Limited
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue									5,882	112
License, Collaboration and Other Revenue \| Other Revenue \| Mitsubishi Tanabe Pharma Corporation
License, Collaboration and Other Revenue:
License, Collaboration and Other Revenue									$ 1,072	$ 335	$ 31

License, Collaboration and Other Significant Agreements - Deferred Revenues Balance (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deferred Revenue:
Short-Term	$ 39,830	$ 56,980
Long-Term	33,120	$ 55,709
Total	72,950
Otsuka Pharmaceutical Company. Ltd. \| U.S.
Deferred Revenue:
Short-Term	23,530
Long-Term	20,641
Total	44,171
Otsuka Pharmaceutical Company. Ltd. \| International
Deferred Revenue:
Short-Term	16,300
Long-Term	7,800
Total	24,100
Vifor Pharma
Deferred Revenue:
Long-Term	4,679
Total	$ 4,679

License, Collaboration and Other Significant Agreements - Schedule of Changes in Contract Assets and Liabilities (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Contract liabilities, Balance at End of Period

$ 72,950

Other Current Assets

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Contract assets, Additions

10,000

$ 531

Contract assets, Deductions

(10,000)

(531)

Accounts Receivable

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Contract assets, Balance at Beginning of Period

^[1]

1,587

34,186

Contract assets, Additions

^[1]

172,614

146,267

Contract assets, Deductions

^[1]

(158,379)

(178,866)

Contract assets, Balance at End of Period

^[1]

15,822

1,587

Deferred Revenue

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Contract liabilities, Balance at Beginning of Period

112,689

179,624

Contract liabilities, Additions

167,189

133,537

Contract liabilities, Deductions

(206,928)

(200,472)

Contract liabilities, Balance at End of Period

72,950

112,689

Accounts Payable

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Contract liabilities, Balance at Beginning of Period

13,492

Contract liabilities, Additions

17,919

Contract liabilities, Deductions

$ (13,492)

(4,427)

Contract liabilities, Balance at End of Period

$ 13,492

[1]

License, Collaboration and Other Significant Agreements - Schedule of Revenue Recognized Resulting from Changes in Contract Asset and Contract Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Amounts included in deferred revenue at the beginning of the period	$ 80,634	$ 137,726	$ 124,454
Performance obligations satisfied in previous periods	$ 45,592	$ 6,659	$ 275

License, Collaboration and Other Significant Agreements - Additional Information (Details)

1 Months Ended

3 Months Ended

12 Months Ended

Feb. 14, 2020

USD ($)

Apr. 08, 2019

USD ($)

May 12, 2017

USD ($)

$ / shares

Apr. 25, 2017

USD ($)

Feb. 09, 2017

USD ($)

$ / shares

Jul. 31, 2019

USD ($)

Dec. 31, 2018

USD ($)

Mar. 31, 2017

USD ($)

Dec. 31, 2016

USD ($)

Dec. 31, 2015

USD ($)

Dec. 31, 2019

USD ($)

Sep. 30, 2019

USD ($)

Jun. 30, 2019

USD ($)

Mar. 31, 2019

USD ($)

Dec. 31, 2018

USD ($)

Sep. 30, 2018

USD ($)

Jun. 30, 2018

USD ($)

Mar. 31, 2018

USD ($)

Mar. 31, 2017

USD ($)

Dec. 31, 2019

USD ($)

Obligation

Dec. 31, 2018

USD ($)

Dec. 31, 2017

USD ($)

Sep. 30, 2017

USD ($)

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

$ 335,001,000

$ 207,742,000

$ 181,227,000

Collaborative arrangements additional cost sharing payments expected amount

$ 72,950,000

72,950,000

57,700,000

$ 56,980,000

39,830,000

$ 56,980,000

39,830,000

56,980,000

Common stock shares sold | shares

$ 55,709,000

$ 33,120,000

$ 55,709,000

$ 33,120,000

$ 55,709,000

116,887,518

121,674,568

116,887,518

121,674,568

116,887,518

License, Collaboration and Other Revenue

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

$ 40,640,000

$ 61,973,000

$ 71,714,000

$ 49,555,000

$ 53,026,000

$ 53,169,000

$ 48,793,000

$ 45,930,000

$ 223,882,000

$ 200,918,000

181,227,000

Accounts Receivable

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

^[1]

$ 1,587,000

15,822,000

1,587,000

15,822,000

1,587,000

34,186,000

Accounts Payable

Mitsubishi Tanabe Pharma Corporation | License, Collaboration and Other Revenue

13,492,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Development and Commercialize Collaboration Agreement

$ 10,000,000

9,281,000

42,918,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Collaboration Agreement, expiration period

10 years

Collaboration Agreement, notice period for termination

12 months

Percentage of royalty payments on sales

$ 20,000,000

20.00%

Additional milestone or royalty payments received

$ 0

Mitsubishi Tanabe Pharma Corporation | Development and Commercialize Collaboration Agreement | Maximum

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | New Agreement | Maximum

245,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Data fee receivable

$ 25,000,000

Mitsubishi Tanabe Pharma Corporation | Development And Commercialize Research And License Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Cost of research services

$ 20,000,000

20,500,000

Mitsubishi Tanabe Pharma Corporation | Regulatory Milestone Payments

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

$ 10,000,000

Mitsubishi Tanabe Pharma Corporation | Regulatory Milestone Payments | Development and Commercialize Collaboration Agreement

10,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Additional milestone revenue receivable

10,000,000

15,000,000

Mitsubishi Tanabe Pharma Corporation | Regulatory Milestone Payments | Development and Commercialize Collaboration Agreement | Maximum

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Regulatory Milestone Payments | Development And Commercialize Research And License Agreement

40,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Development, Regulatory and Commercial Events | Development and Commercialize Collaboration Agreement | Maximum

10,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Development Milestones | Development and Commercialize Collaboration Agreement

225,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Development Milestones | Development and Commercialize Collaboration Agreement | Maximum

$ 10,000,000

10,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

40,000,000

Mitsubishi Tanabe Pharma Corporation | Commercial Milestone Payments | Development and Commercialize Collaboration Agreement

175,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Commercial Milestone Payments | Development and Commercialize Collaboration Agreement | Maximum

$ 175,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Upfront | Development and Commercialize Collaboration Agreement

175,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Incurred clinical and commercial development cost

20,500,000

Mitsubishi Tanabe Pharma Corporation | Development Milestones One | Development And Commercialize Research And License Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Development Milestones Two | Development And Commercialize Research And License Agreement

6,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Mitsubishi Tanabe Pharma Corporation | Development and Commercialize Collaboration Agreement | Development And Commercialize Research And License Agreement | Accounts Receivable

4,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

$ 0

Collaborative arrangements cost sharing payments

44,171,000

$ 44,171,000

209,100,000

Collaborative arrangements additional cost sharing payments amount

$ 43,700,000

Percentage of market penetration for license agreement

90.00%

License agreement, notice period for termination

12 months

Transaction price

$ 425,600,000

Reimbursement for Otsuka's share of costs previously incurred

$ 33,800,000

Transaction price, description

23,530,000

$ 23,530,000

Cost share costs incurred

20,641,000

1,800,000

1,200,000

Reimbursable by Otsuka

700,000

500,000

Cost share costs by partner for license agreement

1,900,000

1,100,000

Reimbursable to Otsuka

1,000,000

500,000

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement | Global Development Plan

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Reimbursement for Otsuka's share of costs previously incurred

$ 33,800,000

Collaborative arrangements additional cost sharing payments expected amount

104,200,000

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement | License, Collaboration and Other Revenue

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement | Accounts Receivable

131,314,000

103,870,000

85,971,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement | Accounts Payable

8,900,000

$ 8,900,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement | Maximum

7,200,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Percentage of increase in funding to fund current global development costs

80.00%

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement | Minimum

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Percentage of increase in funding to fund current global development costs

52.50%

Reduction in percentage of future payments due upon current global development costs creditable

50.00%

Percentage of remaining creditable amount applied to future payments

50.00%

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize United States Collaboration and License Agreement | Minimum | Global Development Plan

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Collaborative arrangements cost sharing payments

$ 266,800,000

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize International Collaboration and License Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Reimbursement for Otsuka's share of costs previously incurred

24,100,000

$ 24,100,000

Transaction price

287,200,000

$ 200,000

Transaction price, description

16,300,000

$ 16,300,000

Estimate Subsequent Cost Share Payment Receivable

7,800,000

214,000,000

Milestone or royalty payments received

$ 0

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize International Collaboration and License Agreement | Global Development Plan

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Reimbursement for Otsuka's share of costs previously incurred

$ 200,000

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize International Collaboration and License Agreement | License, Collaboration and Other Revenue

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize International Collaboration and License Agreement | Accounts Receivable

75,614,000

87,320,000

$ 52,307,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize International Collaboration and License Agreement | Accounts Payable

$ 4,000,000

4,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Commercialize International Collaboration and License Agreement | Minimum | Global Development Plan

6,300,000

$ 6,300,000

6,300,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Estimate Subsequent Cost Share Payment Receivable

214,000,000

Otsuka Pharmaceutical Company. Ltd. | Regulatory Milestone Payments | Development and Commercialize United States Collaboration and License Agreement | Maximum

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Regulatory Milestone Payments | Development and Commercialize International Collaboration and License Agreement | Maximum

65,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development Milestones | Development and Commercialize United States Collaboration and License Agreement | Maximum

52,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development Milestones | Development and Commercialize International Collaboration and License Agreement | Maximum

125,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Commercial Milestone Payments | Development and Commercialize United States Collaboration and License Agreement | Maximum

80,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Commercial Milestone Payments | Development and Commercialize International Collaboration and License Agreement | Maximum

575,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Up-front, Non-refundable and Non-creditable | Development and Commercialize United States Collaboration and License Agreement

525,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Up-front, Non-refundable and Non-creditable | Development and Commercialize International Collaboration and License Agreement

$ 125,000,000

125,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Regulatory Milestones | Development and Commercialize United States Collaboration and License Agreement

$ 73,000,000

73,000,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Otsuka Pharmaceutical Company. Ltd. | Development and Regulatory Milestones | Development and Commercialize International Collaboration and License Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Janssen Pharmaceutica NV | Development And Commercialize Research And License Agreement

$ 0

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Collaboration Agreement, expiration period

10 years

Collaboration Agreement, notice period for termination

180 days

$ 215,000,000

Upfront payment made in cash

16,500,000

$ 1,000,000

Warrant to purchase common stock, shares | shares

509,611

Johnson & Johnson Innovation | Development And Commercialize Research And License Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Warrant to purchase common stock, shares | shares

509,611

Fair value of warrant

$ 3,400,000

Exercise price | $ / shares

$ 9.81

Vifor (International) Ltd. | License Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

License agreement, notice period for termination

$ 25,000,000

12 months

Common stock shares sold | shares

$ 4,700,000

3,571,429

Sale of stock, price per share | $ / shares

$ 14.00

Proceeds from common stock sold

$ 50,000,000

Premium over the closing stock price of common stock | $ / shares

$ 12.69

Premium amount over the closing stock price of common stock

$ 4,700,000

Vifor (International) Ltd. | Priority Review Voucher Letter Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Payments after closing of PRV purchase

$ 10,000,000

Period of payments after closing of PRV purchase

15 days

Japan Tobacco Incorporation and Torii Pharmaceutical Company Limited | License, Collaboration and Other Revenue

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Japan Tobacco Incorporation and Torii Pharmaceutical Company Limited | License Agreement | Panion & BF Biotech, Incorporation

$ 5,882,000

$ 112,000

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]

Royalty payments

400,000

$ 10,200,000

Japan Tobacco Incorporation and Torii Pharmaceutical Company Limited | Sublicense Agreement

Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]