Form 10-Q KERYX BIOPHARMACEUTICALS For: Sep 30

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November 6, 2014 5:06 PM EST

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�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

FORM 10-Q

�

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September�30, 2014

�

�	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from �� to ��

Commission File Number 000-30929

�

KERYX BIOPHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

�


Delaware	�	13-4087132
(State or other jurisdiction of incorporation or organization)	�	(I.R.S. Employer Identification No.)

750 Lexington Avenue

New York, New York 10022

(Address including zip code of principal executive offices)

(212) 531-5965

(Registrant�s telephone number, including area code)

�

Indicate by check mark whether the registrant: (1)�has filed all reports required to be filed by Section�13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)�has been subject to such filing requirements for the past 90 days.��Yes��x��No��

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (�232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).��Yes��x��No��

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of �large accelerated filer,� �accelerated filer� and �smaller reporting company� in Rule 12b-2 of the Exchange Act.

�


Large�accelerated�filer	�	�	��	Accelerated�filer	�	x

Non-accelerated filer	�	��(Do not check if smaller reporting company)	��	Smaller�reporting�company	�	�

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).��Yes��No��x

There were 91,940,297 shares of the registrant�s common stock, $0.001 par value, outstanding as of October�31, 2014.

�

KERYX BIOPHARMACEUTICALS, INC.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2014

TABLE OF CONTENTS

�


�	�	�	��	Page		�
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS			��	�	1	��

PART�I	�	FINANCIAL INFORMATION	��	�	2	��

Item 1	�	Financial Statements	��	�	2	��

	�	Consolidated Balance Sheets as of September 30, 2014 (unaudited) and December 31, 2013	��	�	2	��

	�	Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013 (unaudited)	��	�	3	��

	�	Consolidated Statement of Stockholders� Equity for the nine months ended September 30, 2014 (unaudited)	��	�	4	��

	�	Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 (unaudited)	��	�	5	��

	�	Notes to Consolidated Financial Statements (unaudited)	��	�	6	��

Item 2	�	Management�s Discussion and Analysis of Financial Condition and Results of Operations	��	�	13	��

Item 3	�	Quantitative and Qualitative Disclosures About Market Risk	��	�	22	��

Item 4	�	Controls and Procedures	��	�	22	��

PART�II	�	OTHER INFORMATION	��	�	22	��

Item 1	�	Legal Proceedings	��	�	22	��

Item 1A	�	Risk Factors	��	�	23	��

Item 6	�	Exhibits	��	�	39	��

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report, including matters discussed under the caption �Management�s Discussion and Analysis of Financial Condition and Results of Operations,� may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words �anticipate,� �believe,� �estimate,� �may,� �expect� and similar expressions are generally intended to identify forward-looking statements. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under the captions �Risk Factors,� �Management�s Discussion and Analysis of Financial Condition and Results of Operations� and elsewhere in this report, as well as other factors which may be identified from time to time in our other filings with the Securities and Exchange Commission, or the SEC, or in the documents where such forward-looking statements appear. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. Such forward-looking statements include, but are not limited to, statements about our:

�

expectations for increases or decreases in expenses;

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expectations for the pre-clinical and clinical development, manufacturing, regulatory approval, and commercialization (including market acceptance) of Ferric Citrate or any other products that we may acquire or in-license;

�

expectations for incurring capital expenditures to expand our research and development and manufacturing capabilities;

�

estimates regarding market size and projected growth, as well as our expectation of market acceptance of Ferric Citrate;

�

expectations for generating revenue or becoming profitable on a sustained basis;

�

expectations or ability to enter into marketing and other partnership agreements;

�

expectations or ability to enter into product acquisition and in-licensing transactions;

�

expectations or ability to build our own commercial infrastructure to manufacture, market and sell Ferric Citrate;

�

estimates of the sufficiency of our existing capital resources combined with future anticipated cash flows to finance our operating requirements, including expectations regarding the value and liquidity of our investments;

�

expected losses; and

�

expectations for future capital requirements.

The forward-looking statements contained in this report reflect our views and assumptions only as of the date that this report is signed. Except as required by law, we assume no responsibility for updating any forward-looking statements.

We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

�

PART I. FINANCIAL INFORMATION

ITEM�1. FINANCIAL STATEMENTS

Keryx Biopharmaceuticals, Inc.

Consolidated Balance Sheets as of September�30, 2014 and December�31, 2013

�

(in thousands, except share and per share amounts)

�


�	��	September�30, 2014		�	�	December�31, 2013		�
�	��	(Unaudited)		�	�	�		�
Assets	��				�
Current assets:	��				�
Cash and cash equivalents	��	$	84,132	��	�	$	55,696	��
Short-term investment securities	��	�	34,101	��	�	�	��	��
Interest receivable	��	�	151	��	�	�	��	��
Inventory	��	�	918	��	�	�	��	��
Other current assets	��	�	2,743	��	�	�	1,232	��
	��	�	�	�	�	�	�	�
Total current assets	��	�	122,045	��	�	�	56,928	��

Property, plant and equipment, net	��	�	1,363	��	�	�	349	��
Goodwill	��	�	3,208	��	�	�	3,208	��
Other assets, net	��	�	292	��	�	�	281	��
	��	�	�	�	�	�	�	�
Total assets	��	$	126,908	��	�	$	60,766	��
	��	�	�	�	�	�	�	�
Liabilities and stockholders� equity	��				�
Current liabilities:	��				�
Accounts payable and accrued expenses	��	$	25,138	��	�	$	14,004	��
Accrued compensation and related liabilities	��	�	2,987	��	�	�	1,324	��
	��	�	�	�	�	�	�	�
Total current liabilities	��	�	28,125	��	�	�	15,328	��

Other liabilities	��	�	75	��	�	�	38	��
	��	�	�	�	�	�	�	�
Total liabilities	��	�	28,200	��	�	�	15,366	��
	��	�	�	�	�	�	�	�
Commitments and contingencies	��				�
Stockholders� equity:	��				�
Preferred stock, $0.001 par value per share (5,000,000 shares authorized, no shares issued and outstanding)	��	�	��	��	�	�	��	��
Common stock, $0.001 par value per share (130,000,000 shares authorized, 92,053,199 and 82,723,145 shares issued, 91,973,251 and 82,643,197 shares outstanding at September�30, 2014 and December�31, 2013, respectively)	��	�	92	��	�	�	83	��
Additional paid-in capital	��	�	609,546	��	�	�	485,014	��
Treasury stock, at cost, 79,948 shares at September�30, 2014 and December�31, 2013, respectively	��	�	(357	)�	�	�	(357	)�
Accumulated deficit	��	�	(510,573	)�	�	�	(439,340	)�
	��	�	�	�	�	�	�	�
Total stockholders� equity	��	�	98,708	��	�	�	45,400	��
	��	�	�	�	�	�	�	�
Total liabilities and stockholders� equity	��	$	126,908	��	�	$	60,766	��
	��	�	�	�	�	�	�	�

The accompanying notes are an integral part of the consolidated financial statements.

�

Keryx Biopharmaceuticals, Inc.

Consolidated Statements of Operations

for the three and nine months ended September�30, 2014 and 2013 (Unaudited)

�

(in thousands, except share and per share amounts)

�

��

Three�months�ended
September 30,

�

Nine�months�ended
September 30,

�

��

2014

�

2013

�

2014

�

2013

�

License revenue

��

256

��

�

��

�

10,256

��

�

7,000

��

�

Operating expenses:

��

�

License expenses

��

�

154

��

�

��

�

154

��

�

��

Research and development

��

�

19,053

��

�

10,670

��

�

45,687

��

�

24,277

��

Selling, general and administrative

��

�

16,447

��

�

5,062

��

�

36,007

��

�

12,067

��

�

Total operating expenses

��

�

35,654

��

�

15,732

��

�

81,848

��

�

36,344

��

�

Operating loss

��

�

(35,398

)�

�

(15,732

)�

�

(71,592

)�

�

(29,344

)�

Interest and other income, net

��

�

109

��

�

��

�

359

��

�

280

��

�

Loss before income taxes

��

�

(35,289

)�

�

(15,651

)�

�

(71,233

)�

�

(29,064

)�

Income taxes

��

�

��

�

��

�

��

�

��

�

Net loss

��

(35,289

)�

�

(15,651

)�

�

(71,233

)�

�

(29,064

)�

��

�

Basic and diluted net loss per common share

��

(0.38

)�

�

(0.19

)�

�

(0.79

)�

�

(0.36

)�

��

�

Weighted average shares used in computing basic and diluted net loss per common share

��

�

91,846,588

��

�

81,823,415

��

�

90,639,072

��

�

80,531,785

��

�

The accompanying notes are an integral part of the consolidated financial statements.

�

Keryx Biopharmaceuticals, Inc.

Consolidated Statement of Stockholders� Equity

for the nine months ended September�30, 2014 (Unaudited)

�

(in thousands, except share amounts)

�

��

Common stock

�

Additional
paid-in
Capital

�

��

Treasury stock

�

Accumulated
deficit

�

Total

�

��

Shares

�

Amount

�

��

Shares

�

��

Amount

�

Balance at December�31, 2013

��

�

82,723,145

��

�

��

�

485,014

��

�

79,948

��

(357

)�

�

(439,340

)�

�

45,400

��

Changes during the period:

��

�

��

�

Issuance of common stock in public offering (net of offering costs of $7,525)

��

�

7,935,000

��

�

��

�

107,524

��

�

��

�

��

�

��

�

107,532

��

Issuance of restricted stock

��

�

890,558

��

�

��

�

��

�

��

�

��

�

��

�

��

Forfeiture of restricted stock

��

�

(49,905

)�

�

(�

)*�

�

��

�

��

�

��

�

��

�

(�

)*�

Issuance of common stock in connection with exercise of options

��

�

554,401

��

�

��

*�

�

3,607

��

�

��

�

��

�

��

�

3,607

��

Compensation in respect of options and restricted stock granted to employees, directors and third-parties

��

�

��

�

��

�

13,401

��

�

��

�

��

�

��

�

13,401

��

Net loss

��

�

��

�

��

�

��

�

��

�

��

�

(71,233

)�

�

(71,233

)�

��

�

��

�

��

�

Balance at September�30, 2014

��

�

92,053,199

��

�

��

�

609,546

��

�

79,948

��

(357

)�

�

(510,573

)�

�

98,708

��

�

��

�

��

�

*	Amount less than one thousand dollars.

The accompanying notes are an integral part of the consolidated financial statements.

�

Keryx Biopharmaceuticals, Inc.

Consolidated Statements of Cash Flows

for the nine months ended September�30, 2014 and 2013 (Unaudited)

�

(in thousands)

�


�	��	Nine months ended September 30,						�
�	��	2014		�	�	2013		�
CASH FLOWS FROM OPERATING ACTIVITIES	��				�

Net loss	��	$	(71,233	)�	�	$	(29,064	)�
Adjustments to reconcile net loss to cash flows used in operating activities:	��				�
Stock compensation expense	��	�	13,396	��	�	�	1,960	��
Depreciation and amortization	��	�	185	��	�	�	34	��
Changes in assets and liabilities:	��				�
Increase in other current assets	��	�	(1,511	)�	�	�	(3,241	)�
Increase in accrued interest receivable	��	�	(151	)�	�	�	(156	)�
Increase in inventory	��	�	(912	)�	�	�	��	��
Increase in security deposits	��	�	(116	)�	�	�	��	��
Decrease (increase) in other assets	��	�	105	��	�	�	(23	)�
Increase in accounts payable and accrued expenses	��	�	11,134	��	�	�	8,651	��
Increase (decrease) in accrued compensation and related liabilities	��	�	1,663	��	�	�	(195	)�
Increase (decrease) in other liabilities	��	�	37	��	�	�	(36	)�
	��	�	�	�	�	�	�	�
Net cash used in operating activities	��	�	(47,403	)�	�	�	(22,070	)�
	��	�	�	�	�	�	�	�
CASH FLOWS FROM INVESTING ACTIVITIES	��				�

Purchases of property, plant and equipment	��	�	(1,199	)�	�	�	(49	)�
Investment in held-to-maturity short-term securities	��	�	(49,725	)�	�	�	(24,403	)�
Proceeds from maturity of held-to-maturity short-term securities	��	�	15,624	��	�	�	24,403	��
	��	�	�	�	�	�	�	�
Net cash used in investing activities	��	�	(35,300	)�	�	�	(49	)�
	��	�	�	�	�	�	�	�
CASH FLOWS FROM FINANCING ACTIVITIES	��				�

Gross proceeds from public offerings	��	�	115,057	��	�	�	80,393	��
Offering costs related to public offerings	��	�	(7,525	)�	�	�	(5,640	)�
Proceeds from exercise of options	��	�	3,607	��	�	�	427	��
	��	�	�	�	�	�	�	�
Net cash provided by financing activities	��	�	111,139	��	�	�	75,180	��
	��	�	�	�	�	�	�	�
NET INCREASE IN CASH AND CASH EQUIVALENTS	��	�	28,436	��	�	�	53,061	��
	��	�	�	�	�	�	�	�
Cash and cash equivalents at beginning of period	��	�	55,696	��	�	�	14,677	��
	��	�	�	�	�	�	�	�
CASH AND CASH EQUIVALENTS AT END OF PERIOD	��	$	84,132	��	�	$	67,738	��
	��	�	�	�	�	�	�	�

The accompanying notes are an integral part of the consolidated financial statements.

�

Keryx Biopharmaceuticals, Inc.

Notes to Consolidated Financial Statements (unaudited)

�

Unless the context requires otherwise, references in this report to �Keryx,� �Company,� �we,� �us� and �our� refer to Keryx Biopharmaceuticals, Inc. and our subsidiaries.

NOTE 1 � GENERAL

Basis of Presentation

We are a biopharmaceutical company focused on bringing innovative therapies to market for patients suffering from renal disease. Most of our biopharmaceutical development and substantially all of our administrative operations during the three and nine months ended September�30, 2014 and 2013 were conducted in the United States of America.

The accompanying unaudited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (�GAAP�) for interim financial information and with the instructions to Form 10-Q and Article�10 of Regulation�S-X. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation of the consolidated financial statements have been included. Nevertheless, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December�31, 2013. The results of operations for the three and nine months ended September�30, 2014, are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.

Certain prior period amounts in the condensed consolidated financial statements have been altered to conform to the current quarter presentation. As of September�30, 2014, the breakdown of stock-based compensation is presented in Note 3 � Stockholders� Equity.

Except for 2009, we have incurred substantial operating losses since our inception, and expect to continue to incur operating losses for the foreseeable future and may never become profitable. As of September�30, 2014, we have an accumulated deficit of $510.6 million.

In September 2014, we announced that the U.S. Food and Drug Administration (�FDA�) approved Ferric Citrate (formerly known as Zerenex) for the control of serum phosphorus levels in patients with chronic kidney disease (�CKD�) on dialysis. The U.S. approval of Ferric Citrate was based on data from our Phase 3 registration program. In the Phase 3 clinical trials, Ferric Citrate effectively reduced serum phosphorus levels to well within the National Kidney Foundation Kidney Disease Outcomes Quality Initiative (�KDOQI�) guidelines range of 3.5 to 5.5 mg/dL. In addition to the effects on serum phosphorus levels, Ferric Citrate�s pharmacodynamic properties resulted in increased ferritin, iron and transferrin saturation (�TSAT�), whereas these parameters remained relatively constant in patients treated with active control (Renvela^� and/or Phoslo^�). The most common adverse events for Ferric Citrate treated patients were gastrointestinal-related, including diarrhea, nausea, constipation, vomiting and cough. Recently, we were informed by the FDA that approval of the brand name, Zerenex, had been rescinded. We are working with the FDA to obtain an approved brand name on or prior to launch; however, a brand name is not a pre-requisite for the launch of an FDA-approved drug.

In addition, in March 2014, we submitted a Marketing Authorization Application (�MAA�) with the European Medicines Agency (�EMA�) seeking the approval of Ferric Citrate as a treatment for hyperphosphatemia in patients with CKD, including dialysis and non-dialysis dependent CKD (�NDD-CKD�). Also in March 2014, the EMA validated our MAA, confirming that the submission is sufficiently complete to begin the formal review process.

We have also completed a U.S.-based Phase 2 study of Ferric Citrate for the management of elevated serum phosphorus levels and iron deficiency anemia in subjects with Stage 3 to 5 NDD-CKD, and in September 2014 we initiated a pivotal Phase 3 study of Ferric Citrate for the treatment of iron deficiency anemia in patients with Stage 3 to 5 NDD-CKD.

In January 2014, we raised approximately $107.5 million, net of underwriting discounts and offering expenses of approximately $7.5 million, in an underwritten public offering. We have a shelf registration statement on Form S-3

�

filed and declared effective by the SEC in August 2013, which provides for the offering of up to $150 million of common stock and warrants in the aggregate. Subsequent to the underwritten public offering completed in January 2014, there remains approximately $34.9 million of our common stock and warrants available for sale on this shelf registration statement. See Note 3 for additional information.

In January 2014, our Japanese partner, Japan Tobacco Inc. (�JT�) and Torii Pharmaceutical Co. Ltd. (�Torii�), received manufacturing and marketing approval of Ferric Citrate from the Japanese Ministry of Health, Labour and Welfare. Ferric Citrate, launched in May 2014 and being marketed in Japan by JT�s subsidiary, Torii, under the brand name Riona^�, is indicated as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including dialysis and NDD-CKD.�Under the license agreement with JT and Torii, we received a non-refundable payment of $10.0 million in February 2014 for the achievement of the marketing approval milestone.�We also receive royalty payments based on a tiered double-digit percentage of net sales of Riona^��in Japan escalating up to the mid-teens, as well as up to an additional $55.0 million upon the achievement of certain annual net sales milestones. We owe a mid-single digit percentage of net sales royalty to the licensor of Ferric Citrate associated with net sales of Riona^� in Japan. See Note 4 for additional information.

Our major sources of cash have been proceeds from various public and private offerings of our common stock, option and warrant exercises, interest income, and from the upfront and milestone payments from our Sublicense Agreement with JT and Torii and miscellaneous payments from our other prior licensing activities. We have not yet commercialized any drug, and though we expect commercial launch of our first product later this year, we may not become profitable. Our ability to achieve profitability depends on a number of factors, including our ability to complete our development efforts, obtain additional regulatory approvals for our drug, successfully complete any post-approval regulatory obligations and successfully manufacture and commercialize our drug alone or in partnership. We may continue to incur substantial operating losses even after we begin to generate revenues from our drug. We currently expect that our existing capital resources combined with future anticipated cash flows will be sufficient to operate our business plan. The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to, the timing and expenditures associated with the build-up of inventory and capacity expansion, the timing and expenditures associated with the regulatory review process for our EU MAA filing, the timing and expenditures associated with commercial activities related to Ferric Citrate, and the timing, design and conduct of clinical trials for Ferric Citrate. As a result of these factors, we may need to seek significant additional financings to provide the cash necessary to execute our current operations, including beyond the initial commercialization of Ferric Citrate, and to develop any drug candidates we may in-license or acquire.

Our common stock is listed on the NASDAQ Capital Market and trades under the symbol �KERX.�

Recently Issued Accounting Standards

In August 2014, the Financial Accounting Standards Board issued a new standard, Accounting Standards Update No.�2014-15, Disclosure of Uncertainties about an Entity�s Ability to Continue as a Going Concern. This new standard will explicitly require management to assess an entity�s ability to continue as a going concern and to provide footnote disclosures in certain cases. Currently there is no guidance in GAAP about management�s responsibility to evaluate whether there is substantial doubt about an entity�s ability to continue as a going concern. The new standard applies to all entities and provides an explicit requirement that management assesses and discloses going concern uncertainties. Previous guidance in auditing standards required auditors to evaluate going concern. The new standard will be effective for all entities in the first annual period ending after December�15, 2016, which is December�31, 2016 for calendar year-end entities. Earlier application is permitted.

Cash and Cash Equivalents

We treat liquid investments with original maturities of three months or less when purchased as cash and cash equivalents.

Investment Securities

We classify our short-term debt securities as held-to-maturity. Held-to-maturity securities are those securities in which we have the ability and intent to hold the security until maturity. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective

�

interest method. Available-for-sale investment securities are recorded at fair value (see Note 2 � Fair Value Measurements). Other-than-temporary impairment charges are included in interest and other income, net, and unrealized gains (losses), if determined to be temporary, are included in accumulated other comprehensive income (loss) in stockholders� equity.

The following table summarizes our investment securities at September�30, 2014, and December�31, 2013:

�


(in thousands)	��	September�30, 2014		�	��	December�31, 2013		�
Short-term investments (held to maturity):	��				��
Obligations of domestic governmental agencies (mature between October 2014 and January 2015)	��	$	34,101	��	��	$	��	��
	��	�	�	�	��	�	�	�
Total short-term investment securities	��	$	34,101	��	��	$	��	��
	��	�	�	�	��	�	�	�

Inventory

Inventories are stated at the lower of cost or estimated realizable value. We capitalize inventory costs associated with a product after regulatory approval when, based on management�s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. We received FDA approval for Ferric Citrate on September�5, 2014 and on that date began capitalizing inventory purchases of saleable product from approved suppliers. Until a supplier is approved, all product purchased from such supplier is included as a component of research and development expense. At September�30, 2014, we had approximately $0.9 million in inventory.

Revenue Recognition

We recognize license revenue in accordance with the revenue recognition guidance of the FASB Accounting Standards Codification (the �Codification�). We analyze each element of our licensing agreement to determine the appropriate revenue recognition. The terms of the license agreement may include payments to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. We recognize revenue from upfront payments over the period of significant involvement under the related agreements unless the fee is in exchange for products delivered or services rendered that represent the culmination of a separate earnings process and no further performance obligation exists under the contract. We recognize milestone payments as revenue upon the achievement of specified milestones only if (1)�the milestone payment is non-refundable, (2)�substantive effort is involved in achieving the milestone, (3)�the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement of the milestone, and (4)�the milestone is at risk for both parties. If any of these conditions are not met, we defer the milestone payment and recognize it as revenue over the estimated period of performance under the contract.

License Expenses

License expenses include royalty and other expenses due to the licensor of Ferric Citrate related to our license agreement with JT and Torii. With regard to royalty expense, such expense is directly related to the royalty revenue received from JT and Torii and is recognized in the same period as the revenue is recorded. Other expenses are recognized in the period they are incurred.

Stock-Based Compensation

We recognize all share-based payments to employees and to non-employee directors for service on our board of directors as compensation expense in the consolidated financial statements based on the grant date fair values of such payments. Stock-based compensation expense recognized each period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

�

For share-based payments to consultants and other third-parties, compensation expense is determined at the �measurement date.� The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date.

Income Taxes

As of September�30, 2014, we have U.S. net operating loss carryforwards of approximately $466.9 million which expire from 2019 through 2033. We have established a 100% valuation allowance against our net deferred tax assets due to our history of pre-tax losses and the likelihood that the deferred tax assets will not be realizable. Due to our historical equity transactions, the utilization of certain tax loss carryforwards may be subject to annual limitations imposed by Internal Revenue Code Section�382 relating to the change of control provisions.

We are not aware of any unrecorded tax liabilities which would materially impact our financial position or our results of operations.

Net Loss Per Share

Basic net loss per share is computed by dividing the losses allocable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share does not reflect the effect of shares of common stock to be issued upon the exercise of stock options, as their inclusion would be anti-dilutive for all periods presented. The options outstanding as of September�30, 2014 and 2013, which are not included in the computation of net loss per share amounts, were 5,109,047 and 4,042,600, respectively.

Comprehensive Loss

Comprehensive loss is the same as net loss for all periods presented.

Segment Reporting

We operate in only one reportable segment: the Products segment.

Impairment of Goodwill

Goodwill is reviewed for impairment annually, or when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process. The first step compares the fair value of the reporting unit with the unit�s carrying value, including goodwill. When the carrying value of the reporting unit is greater than fair value, the unit�s goodwill may be impaired, and the second step must be completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting unit�s goodwill is compared with the carrying amount of the unit�s goodwill. If the carrying amount is greater than the implied fair value, the carrying value of the goodwill must be written down to its implied fair value. As of December�31, 2013, management concluded that there was no impairment of our goodwill. For the period ending September�30, 2014, management determined that there were no impairment indicators that would trigger a goodwill impairment analysis.

NOTE 2 � FAIR VALUE MEASUREMENTS

We measure certain financial assets and liabilities at fair value on a recurring basis in the financial statements. The hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

�

Level 1 � quoted prices in active markets for identical assets and liabilities;

�

Level 2 � inputs other than Level 1 quoted prices that are directly or indirectly observable; and

�

Level 3 � unobservable inputs that are not corroborated by market data.

We review investment securities for impairment and to determine the classification of the impairment as temporary or other-than-temporary. Losses are recognized in our consolidated statement of operations when a decline in fair value is determined to be other-than-temporary. We review our investments on an ongoing basis for indications of possible impairment. Once identified, the determination of whether the impairment is temporary or other-than-temporary requires significant judgment.

The following table provides the fair value measurements of applicable financial assets as of September�30, 2014:

�

��

Financial assets at fair value
as of September�30, 2014

�

(in thousands)

��

Level 1

�

��

Level�2

�

��

Level�3

�

Money market funds (1)

��

72,909

��

Obligations of domestic governmental agencies (held-to-maturity) (2)

��

�

34,101

��

�

��

�

��

�

��

�

��

�

Total

��

107,010

��

�

��

�

��

�

(1)	Included in cash and cash equivalents on our consolidated balance sheet. The carrying amount of money market funds approximates fair value.

(2)	Amortized cost approximates fair value.

NOTE 3 � STOCKHOLDERS� EQUITY

Common Stock

On January�22, 2014, we announced the pricing of an underwritten public offering, whereby we sold 7,935,000 shares of our common stock at a price of $14.50 per share for gross proceeds of approximately $115.1 million. Net proceeds from this offering were approximately $107.5 million, net of underwriting discounts and offering expenses of approximately $7.5 million. The shares were sold under a Registration Statement (No. 333-190353) on Form S-3, filed by us with the SEC. This shelf registration statement on Form S-3, filed and declared effective by the SEC in August 2013, provides for the offering of up to $150 million of common stock and warrants in the aggregate. Subsequent to this underwritten public offering, there remains approximately $34.9 million of our common stock and warrants available for sale on this shelf registration statement.

Equity Incentive Plans

Total shares available for the issuance of stock options or other stock-based awards under our stock option and incentive plans were 303,731 shares at September�30, 2014.

Stock Options

The following table summarizes stock option activity for the nine months ended September�30, 2014:

�

��

Number
of shares

�

Weighted-
average
exercise
price

�

��

Weighted-
average
contractual
term

�

��

Aggregate
intrinsic
value

�

��

�

��

(in years)

�

��

�

Outstanding at December 31, 2013

��

�

3,845,370

��

�

5.75

��

�

6.2

��

28,361,438

��

Granted

��

�

1,953,050

��

�

14.43

��

Exercised

��

�

(554,401

)�

�

6.51

��

4,870,250

��

�

��

�

Forfeited

��

�

(134,972

)�

�

10.29

��

Expired

��

�

��

�

��

�

��

Outstanding at September 30, 2014

��

�

5,109,047

��

�

8.87

��

�

7.0

��

27,074,455

��

�

��

�

��

�

Vested and expected to vest at September�30, 2014

��

�

5,026,185

��

�

8.81

��

�

7.0

�

��

26,916,174

��

�

��

�

��

�

Exercisable at September�30, 2014

��

�

2,635,552

��

�

5.37

��

�

4.9

��

22,349,631

��

�

��

�

��

�

Upon the exercise of stock options, we issue new shares of our common stock. As of September�30, 2014, 140,000 options issued to employees are unvested, milestone-based options.

Restricted Stock

Certain employees, directors and consultants have been awarded restricted stock under our incentive plans. The time-vesting restricted stock grants vest primarily over a period of three years. The following table summarizes restricted share activity for the nine months ended September�30, 2014:

�

��

Number of
shares

�

Weighted
average
grant�date
fair value

�

��

Aggregate
intrinsic
value

�

Outstanding at December 31, 2013

��

�

1,420,930

��

�

5.27

��

18,401,044

��

Granted

��

�

890,558

��

�

14.14

��

Vested

��

�

(897,284

)�

�

4.87

��

14,308,137

��

�

��

�

Forfeited

��

�

(49,905

)�

�

8.14

��

�

��

Outstanding at September 30, 2014

��

�

1,364,299

��

�

11.22

��

18,759,111

��

�

��

�

As of September�30, 2014, 55,000 shares of restricted stock issued to employees are unvested, milestone-based shares.

On September�14, 2009, we entered in an employment agreement with Ron Bentsur, our Chief Executive Officer, which was amended on January�13, 2012, and further amended on September�11, 2013. The agreement, as amended, terminates on May�20, 2015, subject to certain early termination events.�As of September�30, 2014, Mr.�Bentsur has been granted a total of 750,000 shares of restricted stock based on the achievement of certain milestone awards described in his employment agreement. In addition, as of September�30, 2014, Mr.�Bentsur has the opportunity to earn certain milestone awards as follows:

(1)�500,000 shares of fully vested common stock�will be granted to Mr.�Bentsur, upon the first to occur of (a)�our first commercial sale of Ferric Citrate in the U.S. off an approved NDA, (b)�our receipt of the first royalty upon the commercial sale of Ferric Citrate in the U.S. by a partner to whom we have sold exclusive or non-exclusive commercial rights, or (c)�our complete outlicensing of the entire product rights of Ferric Citrate in the U.S.

(2)�100,000 shares of restricted stock�will be granted to Mr.�Bentsur upon each event of our outlicensing Ferric Citrate in a foreign market, other than Japan, resulting in a greater than $10 million non-refundable cash payment to us with a gross deal value to us of at least $50 million.�Such restricted stock will vest in equal installments over each of the first three anniversaries of the date of grant, provided that Mr.�Bentsur remains an employee during such vesting period.

Stock-Based Compensation

We incurred $8.2 million and $0.7 million of non-cash compensation expense related to equity incentive grants during the three months ended September�30, 2014 and 2013, respectively, and $13.4 million and $2.0 million during the nine months ended September�30, 2014 and 2013, respectively. The following table reflects stock-based compensation expense for the three- and nine-month periods ended September�30, 2014 and 2013:

�

Stock-Based Compensation

��

Three�months�ended
September�30,

�

��

Nine months ended
September�30,

�

(in thousands)

��

��2014��

�

��

��2013��

�

��

��2014��

�

��

��2013��

�

Research and development

��

5,008

��

319

��

6,078

��

753

��

Selling, general and administrative

��

�

3,232

��

�

422

��

�

7,318

��

�

1,207

��

�

��

�

��

�

��

�

Total stock-based compensation expense

��

8,240

��

741

��

13,396

��

1,960

��

�

��

�

��

�

��

�

The three and nine months ended September�30, 2014, included $4.6 million and $0.4 million of stock-based compensation in research and development and selling, general and administrative expense, respectively, related to the vesting of milestone-based stock options and restricted shares upon the FDA approval of Ferric Citrate.

Stock-based compensation costs capitalized as part of inventory were immaterial for the nine months ended September�30, 2014.

The fair value of stock options granted is estimated at the date of grant using the Black-Scholes pricing model. The expected term of options granted is derived from historical data, the expected vesting period and the full contractual term. Expected volatility is based on the historical volatility of our common stock. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. We have assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future.

�

Black-Scholes Option Valuation Assumptions

��

Three�months�ended
September�30,

�

��

Nine�months�ended
September�30,

�

��

��2014��

�

��

��2013��

�

��

��2014��

�

��

��2013��

�

Risk-free interest rates

��

�

1.9%

��

�

1.1%

��

�

2.0%

��

�

0.6%

��

Dividend yield

��

�

��

�

��

�

��

�

��

Volatility

��

�

101.3%

��

�

100.0%

��

�

103.5%

��

�

102.6%

��

Weighted-average expected term

��

�

6.0�years

��

�

4.0�years

��

�

6.0�years

��

�

3.8�years

��

The weighted average grant date fair value of options granted for the three months ended September�30, 2014 and 2013 was $12.07 and $6.74 per option, respectively, and for the nine months ended September�30, 2014 and 2013 was $11.64 and $3.62 per option. We used historical information to estimate forfeitures within the valuation model. As of September�30, 2014, there was $19.5 million and $11.8 million of total unrecognized compensation cost related to non-vested stock options and restricted stock, respectively, which is expected to be recognized over weighted-average periods of 2.5 years and 2.3 years, respectively. These amounts do not include, as of September�30, 2014, 140,000 options outstanding and 55,000 shares of restricted stock outstanding which are milestone-based and vest upon certain corporate milestones, such as drug launch and change in control. Stock-based compensation will be measured and recorded if and when it is probable that the milestone will occur.

NOTE 4 � LICENSE AGREEMENTS

In November 2005, we entered into a license agreement with Panion�& BF Biotech, Inc. (�Panion�). Under the license agreement, we acquired the exclusive worldwide rights, excluding certain Asian-Pacific countries, for the development and marketing of Ferric Citrate. To date, we have paid an aggregate of $9.6 million to Panion, including the $3.0 million milestone payment paid upon the FDA approval of Ferric Citrate, and Panion is eligible to receive one additional milestone payment of $2.0 million upon our successful achievement of EMA market approval, in addition to royalty payments based on a mid-single digit percentage of net sales of Ferric Citrate.

In September 2007, we entered into a Sublicense Agreement with JT and Torii, JT�s pharmaceutical business subsidiary, under which JT and Torii obtained the exclusive sublicense rights for the development and commercialization of Ferric Citrate in Japan, which is being developed in the U.S. under the trade name Ferric Citrate. JT and Torii are responsible for the future development and commercialization costs in Japan. Effective as of June�8, 2009, we entered into an Amended and Restated Sublicense Agreement (the �Revised Agreement�) with JT and Torii, which, among other things, provided for the elimination of all significant on-going obligations under the sublicense agreement.

In January 2014, JT and Torii received manufacturing and marketing approval of Ferric Citrate from the Japanese Ministry of Health, Labour and Welfare. Ferric Citrate, launched in May 2014 and being marketed in Japan by JT�s subsidiary, Torii Pharmaceutical Co., Ltd., under the brand name Riona^�, is indicated as an oral treatment for the improvement of hyperphosphatemia in patients with CKD.�Under the terms of the license agreement with JT and Torii, we received a non-refundable payment of $10.0 million in February 2014 for the achievement of the marketing approval milestone. As a result, we recorded license revenue of $10.0 million in accordance with our revenue recognition policy, which is included in the nine months ended September�30, 2014.�We also receive royalty payments based on a tiered double-digit percentage of net sales of Riona^��in Japan escalating up to the mid-teens, as well as up to an additional $55.0 million upon the achievement of certain annual net sales milestones. In accordance with our

�

revenue recognition policy, royalty revenues are recognized in the quarter that JT and Torii provide their written report and related information to us regarding sales of Riona^�, which generally will be one quarter following the quarter in which the underlying sales by JT and Torii occurred. We record the associated mid-single digit percentage of net sales royalty expense due Panion, the licensor of Ferric Citrate, in the same period as the royalty revenue from JT and Torii is recorded.

NOTE 5 � LEGAL PROCEEDINGS

On February�1, 2013, a lawsuit was filed against us and our chief executive officer on behalf of a putative class of all of our shareholders (other than the defendants) who acquired our shares between June�1, 2009 and April�1, 2012. Smith v. Keryx Biopharmaceuticals, Inc., et al., Case No.�1:13-CV-0755-TPG (S.D.N.Y.). On February�26, 2013, a substantially similar lawsuit was filed against us and our chief executive officer as well as our chief financial officer. Park v. Keryx Biopharmaceuticals, Inc., et al., Case No.�1:13-CV-1307-TPG (S.D.N.Y.). On June�10, 2013, the Court entered an Order consolidating the two lawsuits and appointing a lead plaintiff. The case was styled In re Keryx Biopharmaceuticals, Inc. Securities Litigation, Case No.�1:13-CV-0755-KBF (S.D.N.Y.). On July�10, 2013, the lead plaintiff filed a Consolidated Amended Complaint that, in substance, repeated the claims alleged in the consolidated lawsuits. The Consolidated Amended Complaint asserted claims against (i)�us for alleged violations of Section�10(b) of the Securities Exchange Act of 1934 (�Exchange Act�) and Rule 10b-5 promulgated thereunder and (ii)�our chief executive officer for alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5. The claims in the Consolidated Amended Complaint were premised on general allegations that we and the individual defendant participated directly or indirectly in the preparation and/or issuance of purportedly false and misleading earnings reports, SEC filings, press releases, and other public statements, which allegedly caused our stock to trade at artificially inflated prices. On August�26, 2013, we filed a motion to dismiss the Consolidated Amended Complaint. On February�14, 2014, the Court entered an Opinion and Order granting the motion to dismiss. The Court entered Judgment for the Defendants on February�24, 2014. The lead plaintiff did not appeal the Judgment and this matter is now concluded.

ITEM�2. MANAGEMENT�S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context requires otherwise, references in this report to �Keryx,� the �Company,� �we,� �us� and �our� refer to Keryx Biopharmaceuticals, Inc. and our subsidiaries.

The following discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our results could differ materially from the results anticipated by our forward-looking statements as a result of many known or unknown factors, including, but not limited to, those factors discussed in �Risk Factors.� See also the �Special Cautionary Notice Regarding Forward-Looking Statements� set forth at the beginning of this report.

You should read the following discussion and analysis in conjunction with the unaudited consolidated financial statements, and the related footnotes thereto, appearing elsewhere in this report, and in conjunction with management�s discussion and analysis and the audited consolidated financial statements included in our annual report on Form 10-K for the year ended December�31, 2013.

OVERVIEW

We are a biopharmaceutical company focused on bringing innovative therapies to market for patients suffering from renal disease. We are developing Ferric Citrate, an oral, ferric iron-based compound. In September 2014, we announced that the U.S. Food and Drug Administration (�FDA�) approved Ferric Citrate (formerly known as Zerenex) for the control of serum phosphorus levels in patients with chronic kidney disease, or CKD, on dialysis. The U.S. approval of Ferric Citrate was based on data from our Phase 3 registration program. In the Phase 3 clinical trials, Ferric Citrate effectively reduced serum phosphorus levels to well within the National Kidney Foundation Kidney Disease Outcomes Quality Initiative, or KDOQI, guidelines range of 3.5 to 5.5 mg/dL. In addition to the effects on serum phosphorus levels, Ferric Citrate�s pharmacodynamic properties resulted in increased ferritin, iron and transferrin saturation, or TSAT, whereas these parameters remained relatively constant in patients treated with active control (Renvela^� and/or Phoslo^�). The most common adverse events for Ferric Citrate treated patients were gastrointestinal-

�

related, including diarrhea, nausea, constipation, vomiting and cough. Recently, we were informed by the FDA that approval of the brand name, Zerenex, had been rescinded. We are working with the FDA to obtain an approved brand name on or prior to launch; however, a brand name is not a pre-requisite for the launch of an FDA-approved drug.

In addition, in March 2014, we submitted a Marketing Authorization Application, or MAA, with the European Medicines Agency, or EMA, seeking the approval of Ferric Citrate as a treatment for hyperphosphatemia in patients with CKD, including dialysis and non-dialysis dependent CKD, or NDD-CKD. Also in March 2014, the EMA validated our MAA, confirming that the submission is sufficiently complete to begin the formal review process.

We have also completed a U.S.-based Phase 2 study of Ferric Citrate for the management of elevated serum phosphorus levels and iron deficiency anemia in subjects with Stage 3 to 5 NDD-CKD, and in September 2014, we initiated a pivotal Phase 3 study of Ferric Citrate for the treatment of iron deficiency anemia in patients with Stage 3 to 5 NDD-CKD.

Currently, our only drug product is Ferric Citrate. We may engage in business development activities that include seeking strategic relationships for Ferric Citrate, as well as evaluating other compounds and companies for in-licensing or acquisition. To date, we have not generated any product sales from Ferric Citrate or any other drug product. We expect commercial launch of Ferric Citrate later this year. We have generated, and expect to continue to generate, revenue from the sublicensing of rights to Ferric Citrate in Japan to our Japanese partner, JT and Torii.

RECENT DEVELOPMENTS

Ferric Citrate

In July 2014, we announced the publication of results from the long-term pivotal Phase 3 study of Ferric Citrate in the Journal of the American Society of Nephrology.

In July 2014, we completed the long-term, open-label extension, or OLE, study for Ferric Citrate in dialysis-dependent CKD patients. Patients who had participated in and successfully completed the long-term pivotal Phase 3 study were eligible for enrollment in the 48-week OLE study, providing for cumulative exposure to Ferric Citrate of up to two years. Patients in the OLE study (n=168) were titrated to achieve and maintain serum phosphorus levels within a range of 3.5 to 5.5 mg/dL, with a maximum daily dose of 12 grams per day of Ferric Citrate. The safety profile observed in the OLE study was consistent with that seen in the long-term pivotal Phase 3 study and there were no clinically meaningful changes in liver enzymes or aluminum levels over the course of the study. The full data from this study was submitted as an abstract to the American Society of Nephrology meeting.

In September 2014, we announced that the FDA approved Ferric Citrate for the control of serum phosphorus levels in patients with CKD on dialysis. The U.S. approval of Ferric Citrate was based on data from our Phase 3 registration program. In the Phase 3 clinical trials, Ferric Citrate effectively reduced serum phosphorus levels to well within the KDOQI guidelines range of 3.5 to 5.5 mg/dL. In addition to the effects on serum phosphorus levels, Ferric Citrate�s pharmacodynamic properties resulted in increased ferritin, iron and TSAT; whereas these parameters remained relatively constant in patients treated with active control (Renvela^� and/or Phoslo^�). The most common adverse events for Ferric Citrate treated patients were gastrointestinal-related, including diarrhea, nausea, constipation, vomiting and cough. Recently, we were informed by the FDA that approval of the brand name, Zerenex, had been rescinded. We are working with the FDA to obtain an approved brand name on or prior to launch; however, a brand name is not a pre-requisite for the launch of an FDA-approved drug.

In September 2014, we announced the initiation of a pivotal Phase 3 study of Ferric Citrate for the treatment of iron deficiency anemia in patients with Stage 3-5 NDD-CKD. This study�s primary endpoint is the between group comparison of the proportion of patients achieving a 1 g/dL or greater increase in hemoglobin at any point during the 16-week Randomized Period. In our completed 12-week Phase 2 study in NDD-CKD, a post-hoc analysis of this endpoint demonstrated that the proportion of patients achieving a 1 g/dL or greater increase in hemoglobin at any time point during the study was 40% in the Ferric Citrate arm vs. 15% in the placebo arm (p-value <0.001).�Secondary endpoints in the Phase 3 study include change from baseline to end of Randomized Period for hemoglobin, ferritin, TSAT and serum phosphorus.

�

In October 2014, we announced that the U.S. Patent and Trademark Office issued U.S. Patent No.�8,846,976. The patent, which expires in 2024, claims a method of treating hyperphosphatemia comprised of administering a therapeutically effective amount of an orally administrable form of Ferric Citrate to a subject, wherein the orally administrable form is prepared from a ferric citrate active pharmaceutical ingredient having an intrinsic dissolution rate of at least 1.88/mg/cm2/min. In addition, U.S. Patent No.�8,846,976 contains claims directed to the�FDA�approved dosing and daily administration of Ferric Citrate. This newly issued patent further enhances our key patent family, which includes U.S. Patent Nos. 7,767,851, 8,299,298, 8,338,642, 8,609,896, 8,754,257 and 8,754,258, which expire in 2024, and U.S. Patent No.�8,093,423, which expires in 2028, before patent term extension. Each of these patents contains composition and method of use claims covering Ferric Citrate.

In October 2014, following the regulatory approval of ferric citrate in Japan earlier this year, the Japan Patent office granted patent term extensions for patents #4964585 and #4173553, which extended the terms of these patents in Japan to November 2025 and November 2022, respectively.

GENERAL CORPORATE

We have devoted substantially all of our efforts to the identification, in-licensing, development and partnering of drug candidates, as well as pre-commercial activities related to Ferric Citrate, and have incurred negative cash flow from operations each year since our inception. We have spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our product development efforts, our clinical trials, pre-commercial/commercial, partnership and licensing activities. We have not yet commercialized any drug, and though we expect commercial launch of our first product later this year, we may not become profitable. Our ability to achieve profitability depends on a number of factors, including our ability to complete our development efforts, obtain additional regulatory approvals for our drug, successfully complete any post-approval regulatory obligations and successfully manufacture and commercialize our drug. We may continue to incur substantial operating losses even after we begin to generate revenues from our drug.

Our license revenues consist of license fees and milestone payments arising from our agreement with JT and Torii. We recognize license revenue in accordance with the revenue recognition guidance of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or the Codification. We analyze each element of our licensing agreement to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. We recognize revenue from upfront payments over the period of significant involvement under the related agreements unless the fee is in exchange for products delivered or services rendered that represent the culmination of a separate earnings process and no further performance obligation exists under the contract. We recognize milestone payments as revenue upon the achievement of specified milestones only if (1)�the milestone payment is non-refundable, (2)�substantive effort is involved in achieving the milestone, (3)�the amount of the milestone is reasonable in relation to the effort expended or the risk associated with the achievement of the milestone, and (4)�the milestone is at risk for both parties. If any of these conditions are not met, we defer the milestone payment and recognize it as revenue over the estimated period of performance under the contract.

For arrangements for which royalty revenue information becomes available and collectability is reasonably assured, we recognize revenue during the applicable period earned.�When collectability is reasonably assured but a reasonable estimate of royalty revenue cannot be made, the royalty revenue is recognized in the quarter that the licensee provides the written report and related information to us. Based on our agreement with JT and Torii, and in accordance with our revenue recognition policy, royalty revenues are recognized in the quarter that JT and Torii provide their written report and related information to us regarding sales of Riona^�, which generally will be one quarter following the quarter in which the underlying sales by JT and Torii occurred.

We have not earned any revenues from the commercial sale of any drug. We expect commercial launch of Ferric Citrate later this year.

Our license expenses consist of royalty and other expenses due to the licensor of Ferric Citrate related to our license agreement with JT and Torii. With regard to royalty expense, such expense is directly related to the royalty revenue received from JT and Torii and is recognized in the same period as the revenue is recorded. Other expenses are recognized in the period they are incurred.

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Our research and development expenses consist primarily of salaries and related personnel costs, including stock-based compensation, fees paid to consultants and outside service providers for clinical and laboratory development, manufacturing, including pre-approval inventory build-up, regulatory, facilities-related and other expenses relating to the design, development, manufacture, testing, and enhancement of our drug candidates and technologies, as well as expenses related to in-licensing of new product candidates. We expense our research and development costs as they are incurred.

Our selling, general and administrative expenses consist primarily of salaries and related expenses, including stock-based compensation, for executive, finance, sales, marketing and other administrative personnel, recruitment expenses, professional fees and other corporate expenses, including investor relations, legal activities, pre-commercial/commercial activities and facilities-related expenses.

Our results of operations include non-cash compensation expense as a result of the grants of stock options and restricted stock. Compensation expense for awards of options and restricted stock granted to employees and directors represents the fair value of the award recorded over the respective vesting periods of the individual awards. The expense is included in the respective categories of expense in the consolidated statements of operations. We expect to continue to incur significant non-cash compensation expenses.

For awards of options and restricted stock to consultants and other third-parties, compensation expense is determined at the �measurement date.� The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date. This results in a change to the amount previously recorded in respect of the equity award grant, and additional expense or a reversal of expense may be recorded in subsequent periods based on changes in the assumptions used to calculate fair value, such as changes in market price, until the measurement date is reached and the compensation expense is finalized.

In addition, certain options and restricted stock issued to employees, consultants and other third-parties vest upon the achievement of certain milestones, therefore the total expense is uncertain until the milestone is met.

Clinical trials are lengthy and expensive. Even though our trials demonstrated that Ferric Citrate is effective in the control of serum phosphorus levels in patients with CKD on dialysis, there is no guarantee that we will be able to record meaningful commercial sales of Ferric Citrate in the future. In addition, we expect losses to continue as we continue to fund the development of Ferric Citrate, including, but not limited to, supplemental new drug application submissions, building of inventory, pre-commercial and commercial activities, ongoing and additional clinical trials, and the potential acquisition and development of additional drug candidates in the future. As we continue our development efforts, we may enter into additional third-party collaborative agreements and may incur additional expenses, such as licensing fees and milestone payments. In addition, we are continuing to establish the commercial infrastructure required to manufacture, market and sell Ferric Citrate, which will result in us incurring additional expenses. As a result, our quarterly results may fluctuate and a quarter-by-quarter comparison of our operating results may not be a meaningful indication of our future performance.

RESULTS OF OPERATIONS

Three months ended September�30, 2014 and September�30, 2013

License Revenue. For the three months ended September�30, 2014, we recognized $0.3 million in license revenue on royalty payments from sales of Riona^��in Japan. There was no license revenue for the three months ended September�30, 2013. We receive royalty payments based on a tiered double-digit percentage of net sales of Riona^��in Japan escalating up to the mid-teens for sales made by Torii. We may also receive up to an additional $55 million upon the achievement of certain annual net sales milestones.

License Expenses. For the three months ended September�30, 2014, we recognized $0.2 million in license expenses related to royalties due to the licensor of Ferric Citrate relating to sales of Riona^��in Japan. There were no license expenses for the three months ended September�30, 2013. We owe a mid-single digit percentage of net sales royalty to the licensor of Ferric Citrate associated with net sales of Riona^� in Japan.

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Research and Development Expenses. Research and development expenses increased by $8.4 million to $19.1 million for the three months ended September�30, 2014, as compared to $10.7 million for the three months ended September�30, 2013. Stock-based compensation expense increased by $4.7 million to $5.0 million for the three months ended September�30, 2014 as compared to $0.3 million for the three months ended September�30, 2013, primarily related to $4.6 million of stock-based compensation expense due to the vesting of milestone-based stock options and restricted shares upon the FDA approval of Ferric Citrate. The increase in research and development expenses was also due to a $3.8 million increase in research and development expenses related to our Ferric Citrate program, including costs associated with the manufacturing of pre-approval inventory. The three months ended September�30, 2014, also includes a $3.0 million one-time milestone payment to Panion, the licensor of Ferric Citrate, for our achievement of FDA approval of Ferric Citrate in September 2014. We expect our research and development expenses in the fourth quarter of 2014 to decrease as compared to the third quarter of 2014 due to the inclusion in the third quarter of milestone-based expenses for stock-based compensation and a one-time payment to Panion incurred upon FDA approval of Ferric Citrate, partially offset by the continuous build of inventory by additional suppliers not yet approved by the FDA and an increase in expenses associated with our pivotal Phase 3 study of Ferric Citrate in NDD-CKD patients that began in September.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $11.4 million to $16.5 million for the three months ended September�30, 2014, as compared to $5.1 million for the three months ended September�30, 2013. The increase was primarily related to a $6.2 million increase in pre-commercial/commercial activities and associated personnel costs in preparation for the commercialization of Ferric Citrate. Stock-based compensation expense increased by $2.8 million to $3.2 million for the three months ended September�30, 2014, as compared to $0.4 million for the three months ended September�30, 2013, primarily related to increased selling, general and administrative personnel and the recording of the fair value of equity awards granted, which are expensed over the vesting periods of the individual awards. We expect our selling, general and administrative costs to increase in the fourth quarter of 2014 related to commercial preparations and the launch of Ferric Citrate.

Interest and Other Income, Net. Interest and other income, net, increased by $28,000 to $109,000 for the three months ended September�30, 2014, as compared to $81,000 for the three months ended September�30, 2013. The increase was due to a higher level of invested funds in our investment portfolio following our January 2014 public offering.

Nine months ended September�30, 2014 and September�30, 2013

License Revenue. License revenue for the nine months ended September�30, 2014 was $10.3 million due to the recognition of a $10.0 million non-refundable milestone payment in January 2014 related to JT and Torii�s achievement of marketing approval in Japan and $0.3 million of royalty payments from sales of Riona^��in Japan. License revenue for the nine months ended September�30, 2013 was $7.0 million due to the recognition of a non-refundable milestone payment received in January 2013 from JT and Torii following their filing of their NDA with the Japanese Ministry of Health, Labour and Welfare for marketing approval of Ferric Citrate in Japan. We receive royalty payments based on a tiered double-digit percentage of net sales of Riona^��in Japan escalating up to the mid-teens for sales made by Torii. We may also receive up to an additional $55 million upon the achievement of certain annual net sales milestones.

License Expenses. For the nine months ended September�30, 2014, we recognized $0.2 million in license expenses related to royalties due to the licensor of Ferric Citrate relating to sales of Riona^��in Japan. There were no license expenses for the nine months ended September�30, 2013. We owe a mid-single digit percentage of net sales royalty to the licensor of Ferric Citrate associated with net sales of Riona^� in Japan.

Research and Development Expenses. Research and development expenses increased by $21.4 million to $45.7 million for the nine months ended September�30, 2014, as compared to $24.3 million for the nine months ended September�30, 2013. The increase in research and development expenses was due primarily to a $15.9 million increase in research and development expenses related to our Ferric Citrate program, including costs associated with the manufacturing of pre-approval inventory and the submission of our MAA filing. The nine months ended September�30, 2014,

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also includes a $2.0 million one-time milestone payment to Panion, the licensor of Ferric Citrate, for JT and Torii�s achievement of the Japanese marketing approval milestone in January 2014 and a $3.0 million one-time milestone payment to Panion for our achievement of FDA approval of Ferric Citrate in September 2014. Stock-based compensation expense increased by $5.3 million to $6.1 million for the nine months ended September�30, 2014, as compared to $0.8 million for the nine months ended September�30, 2013, primarily related to $4.6 million of stock-based compensation expense due to the vesting of milestone-based stock options and restricted shares upon the FDA approval of Ferric Citrate. We expect our research and development expenses in the fourth quarter of 2014 to decrease as compared to the third quarter of 2014 due to the inclusion in the third quarter of milestone-based expenses for stock-based compensation and a one-time payment to Panion incurred upon FDA approval of Ferric Citrate, partially offset by the continuous build of inventory by additional suppliers not yet approved by the FDA and an increase in expenses associated with our pivotal Phase 3 study of Ferric Citrate in NDD-CKD patients that began in September.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $23.9 million to $36.0 million for the nine months ended September�30, 2014, as compared to $12.1 million for the nine months ended September�30, 2013. The increase was primarily related to an $11.7 million increase in pre-commercial/commercial activities and associated personnel costs in preparation for the commercialization of Ferric Citrate. Stock-based compensation expense increased by $6.1 million to $7.3 million for the nine months ended September�30, 2014, as compared to $1.2 million for the nine months ended September�30, 2013, primarily related to increased selling, general and administrative personnel and the recording of the fair value of equity awards granted, which are expensed over the vesting periods of the individual awards. We expect our selling, general and administrative costs to increase in the fourth quarter of 2014 related to commercial preparations and the launch of Ferric Citrate.

Interest and Other Income, Net. Interest and other income, net, increased by $79,000 to $359,000 for the nine months ended September�30, 2014, as compared to $280,000 for the nine months ended September�30, 2013. The increase was due to a higher level of invested funds in our investment portfolio following our January 2014 public offering.

LIQUIDITY AND CAPITAL RESOURCES

In January 2014, our Japanese partner, JT and Torii, received manufacturing and marketing approval of Ferric Citrate from the Japanese Ministry of Health, Labour and Welfare. Ferric Citrate, launched in May 2014 and being

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marketed in Japan by JT�s subsidiary, Torii, under the brand name Riona^�, is indicated as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including dialysis and NDD-CKD.�Under the license agreement with JT and Torii, we received a non-refundable payment of $10.0 million in February 2014 for the achievement of the marketing approval milestone.�We also receive royalty payments based on a tiered double-digit percentage of net sales of Riona^��in Japan escalating up to the mid-teens, as well as up to an additional $55.0 million upon the achievement of certain annual net sales milestones. We owe a mid-single digit percentage of net sales royalty to the licensor of Ferric Citrate associated with net sales of Riona^� in Japan.

As of September�30, 2014, we had $118.4 million in cash, cash equivalents, short-term investments and interest receivable, an increase of $62.7 million from December�31, 2013. We currently expect that our existing capital resources combined with future anticipated cash flows will be sufficient to operate our business plan. The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to, the timing and expenditures associated with the build-up of inventory and capacity expansion, the timing and expenditures associated with the regulatory review process for our EU MAA filing, the timing and expenditures associated with commercial activities related to Ferric Citrate, and the timing, design and conduct of clinical trials for Ferric Citrate. As a result of these factors, we may need to seek additional financings to provide the cash necessary to execute our current operations, including beyond the initial commercialization of Ferric Citrate, and to develop any drug candidates we may in-license or acquire.

Net cash used in operating activities for the nine months ended September�30, 2014 was $47.4 million, as compared to $22.1 million for the nine months ended September�30, 2013. This increase in net cash used in operating activities was primarily related to increased Ferric Citrate development and pre-commercial expenditures.

For the nine months ended September�30, 2014, net cash used in investing activities was $35.3 million, as compared to $49,000 for the nine months ended September�30, 2013. The increase in net cash used in investing activities was primarily due to our investments in held-to-maturity short-term securities following our public offering of common stock in January 2014.

For the nine months ended September�30, 2014, net cash provided by financing activities was $111.1 million as compared to $75.2 million for the nine months ended September�30, 2013. The increase was primarily related to $107.5 million of net proceeds received from our public offering of common stock in January 2014, as compared to $74.8 million of net proceeds received from our public offering of common stock in January 2013.

OFF-BALANCE SHEET ARRANGEMENTS

We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support, or engages in leasing, hedging, or research and development services on our behalf.

OBLIGATIONS AND COMMITMENTS

As of September�30, 2014, we have the following operating lease obligations, which include our office leases in New York and Boston.

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Payment due by period (in thousands)

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Total

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Less�than
1 year

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1-3
years

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3-5
years

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Contractual obligations

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Operating leases

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2,685

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1,521

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1,164

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2,685

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1,521

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1,164

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CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities and related disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the applicable period. Actual results may differ from these estimates under different assumptions or conditions.

We define critical accounting policies as those that are reflective of significant judgments and uncertainties and which may potentially result in materially different results under different assumptions and conditions. In applying these critical accounting policies, our management uses its judgment to determine the appropriate assumptions to be used in making certain estimates. These estimates are subject to an inherent degree of uncertainty. Our critical accounting policies include the following:

Stock Compensation. We have granted stock options and restricted stock to employees, directors and consultants, as well as warrants to other third parties. For employee and director grants, the value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model takes into account volatility in the price of our stock, the risk-free interest rate, the estimated life of the option, the closing market price of our stock and the exercise price. We base our estimates of our stock price volatility on the historical volatility of our common stock and our assessment of future volatility; however, these estimates are neither predictive nor indicative of the future performance of our stock. For purposes of the calculation, we assumed that no dividends would be paid during the life of the options and warrants. The estimates utilized in the Black-Scholes calculation involve inherent uncertainties and the application of management judgment. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those equity awards expected to vest. As a result, if other assumptions had been used, our recorded stock-based compensation expense could have been materially different from that reported. In addition, because some of the options and warrants issued to employees, consultants and other third-parties vest upon the achievement of certain milestones, the total expense is uncertain.

Total compensation expense for options and restricted stock issued to consultants is determined at the �measurement date.� The expense is recognized over the vesting period for the options and restricted stock. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record stock-based compensation expense based on the fair value of the equity awards at the reporting date. These equity awards are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date. This results in a change to the amount previously recorded in respect of the equity award grant, and additional expense or a reversal of expense may be recorded in subsequent periods based on changes in the assumptions used to calculate fair value, such as changes in market price, until the measurement date is reached and the compensation expense is finalized.

Accruals for Clinical Research Organization and Clinical Site Costs. We make estimates of costs incurred in relation to external clinical research organizations, or CROs, and clinical site costs. We analyze the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period. We review and accrue CRO expenses and clinical trial study expenses based on work performed and rely upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment of patients, and the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract.

Revenue Recognition. We recognize license revenue in accordance with the revenue recognition guidance of the Codification. We analyze each element of our licensing agreement to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. We recognize revenue from upfront payments over the period of significant involvement under the related agreements unless the fee is in exchange

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for products delivered or services rendered that represent the culmination of a separate earnings process and no further performance obligation exists under the contract. We recognize milestone payments as revenue upon the achievement of specified milestones only if (1)�the milestone payment is non-refundable, (2)�substantive effort is involved in achieving the milestone, (3)�the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement of the milestone, and (4)�the milestone is at risk for both parties. If any of these conditions are not met, we defer the milestone payment and recognize it as revenue over the estimated period of performance under the contract.

We recognize other revenues at the time such fees and payments are earned.

Inventory. Inventories are stated at the lower of cost or estimated realizable value. We capitalize inventory costs associated with a product after regulatory approval when, based on management�s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. We received FDA approval for Ferric Citrate on September�5, 2014 and on that date began capitalizing inventory purchases of saleable product from approved suppliers. Until a supplier is approved, all product purchased from such supplier is included as a component of research and development expense. At September�30, 2014, we had approximately $0.9 million in inventory.

Accounting Related to Goodwill. As of September�30, 2014, there was approximately $3.2 million of goodwill on our consolidated balance sheet. Goodwill is reviewed for impairment annually, or when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process. The first step compares the fair value of the reporting unit with the unit�s carrying value, including goodwill. When the carrying value of the reporting unit is greater than fair value, the unit�s goodwill may be impaired, and the second step must be completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting unit�s goodwill is compared with the carrying amount of the unit�s goodwill. If the carrying amount is greater than the implied fair value, the carrying value of the goodwill must be written down to its implied fair value.

We are required to perform impairment tests annually, at December�31, and whenever events or changes in circumstances suggest that the carrying value of an asset may not be recoverable. For all of our acquisitions, various analyses, assumptions and estimates were made at the time of each acquisition that were used to determine the valuation of goodwill and intangibles. In future years, the possibility exists that changes in forecasts and estimates from those used at the acquisition date could result in impairment indicators.

Accounting For Income Taxes. In preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves management estimation of our actual current tax exposure and assessment of temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we must include an expense within the tax provision in the consolidated statement of operations. Significant management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We have fully offset our deferred tax assets with a valuation allowance. Our lack of earnings history and the uncertainty surrounding our ability to generate taxable income prior to the reversal or expiration of such deferred tax assets were the primary factors considered by management in maintaining the valuation allowance.

RECENTLY ISSUED ACCOUNTING STANDARDS

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evaluate whether there is substantial doubt about an entity�s ability to continue as a going concern. The new standard applies to all entities and provides an explicit requirement that management assesses and discloses going concern uncertainties. Previous guidance in auditing standards required auditors to evaluate going concern. The new standard will be effective for all entities in the first annual period ending after December�15, 2016, which is December�31, 2016 for calendar year-end entities. Earlier application is permitted.

ITEM�3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of our investment activities is to preserve principal while maximizing our income from investments and minimizing our market risk. We currently invest in government and investment-grade corporate debt in accordance with our investment policy, which we may change from time to time. The securities in which we invest have market risk. This means that a change in prevailing interest rates, and/or credit risk, may cause the fair value of the investment to fluctuate. For example, if we hold a security that was issued with a fixed interest rate at the then-prevailing rate and the prevailing interest rate later rises, the fair value of our investment will probably decline. As of September�30, 2014, our portfolio of financial instruments consists of cash equivalents and short-term interest bearing securities, including government debt and money market funds. The average duration of all of our held-to-maturity investments held as of September�30, 2014, was less than 12 months. Due to the short-term nature of these financial instruments, we believe there is no material exposure to interest rate risk, and/or credit risk, arising from our portfolio of financial instruments.

ITEM�4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September�30, 2014, management carried out, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September�30, 2014, our disclosure controls and procedures were effective.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September�30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

PART II. OTHER INFORMATION

ITEM�1. LEGAL PROCEEDINGS

We, and our subsidiaries, are not a party to, and our property is not the subject of, any material pending legal proceedings, except as stated below.

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ITEM�1A. RISK FACTORS

You should carefully consider the following risks and uncertainties. If any of the following occurs, our business, financial condition and/or operating results could be materially harmed. These factors could cause the trading price of our common stock to decline, and you could lose all or part of your investment.

Risks related to our business and Industry

We have a limited operating history and have incurred substantial operating losses since our inception. We expect to continue to incur losses in the future and may never become profitable.

We have a limited operating history. You should consider our prospects in light of the risks and difficulties frequently encountered by early stage companies. In addition, we have incurred substantial operating losses since our inception and expect to continue to incur operating losses for the foreseeable future and may never become profitable. As of September�30, 2014, we had an accumulated deficit of $510.6 million. As we continue our research and development and initial commercial efforts, we will incur increasing losses. We may continue to incur substantial operating losses even after we begin to generate revenues from our drug, Ferric Citrate. Our ability to achieve profitability depends on a number of factors, including our ability to complete our development efforts, obtain additional regulatory approvals for our drug, successfully complete any post approval regulatory obligations and successfully manufacture and commercialize our drug.

We are highly dependent on the commercial success of Ferric Citrate in the U.S. for the foreseeable future; we may be unable to attain profitability and positive cash flow from operations.

In September�2014, the FDA approved Ferric Citrate (formerly known as Zerenex) for the control of serum phosphorus levels in patients with CKD on dialysis. The commercial success of Ferric Citrate will depend on a number of factors, including:

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the effectiveness of Ferric Citrate as a treatment for adult patients with CKD on dialysis;

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the size of the treatable patient population;

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the effectiveness of the sales, managed markets and marketing efforts by us and our competitors;

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the adoption of Ferric Citrate by physicians, which depends on whether physicians view it as a safe and effective treatment to lower serum phosphorus levels in patients with CKD on dialysis;

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our ability to both secure and maintain adequate reimbursement for, and optimize patient access to, Ferric Citrate by providing third party payers with a strong value proposition based on the existing burden of illness associated with CKD patients on dialysis and the benefits of Ferric Citrate;

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the occurrence of any side effects, adverse reactions or misuse, or any unfavorable publicity in these areas, associated with Ferric Citrate;

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the development or commercialization of competing products or therapies for the control of serum phosphorus levels in patients with CKD on dialysis; and

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our ability to identify reliable suppliers and successfully manufacture Ferric Citrate.

Our revenues from the commercialization of Ferric Citrate are subject to these and other factors, and therefore may be unpredictable from quarter-to-quarter. Ultimately, we may never generate sufficient revenues from Ferric Citrate to reach or maintain profitability or sustain our anticipated levels of operations.

Ferric Citrate may cause undesirable side effects or have other properties that could limit its commercial potential.

The most commonly reported adverse reactions in the clinical trials that supported the approval of Ferric Citrate in the U.S. were diarrhea (21%), nausea (11%), constipation (8%), vomiting (7%)�and cough (6%). Gastrointestinal adverse reactions were the most common reason for discontinuing Ferric Citrate (14%)�in clinical trials. If we or others identify previously unknown side effects, if known side effects are more frequent or severe than in the past, if we or others detect unexpected safety signals for Ferric Citrate or any products perceived to be similar to Ferric Citrate, or if any of the foregoing are perceived to have occurred, then in any of these circumstances:

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sales of Ferric Citrate may be impaired;

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regulatory approvals for Ferric Citrate may be restricted or withdrawn;

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we may decide to, or be required to, send drug warnings or safety alerts to physicians, pharmacists and hospitals, or may decide to conduct a product recall;

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reformulation of the product, additional nonclinical or clinical studies, changes in labeling or changes to or reapprovals of manufacturing facilities may be required;

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we may be precluded from pursuing additional development opportunities to enhance the clinical profile of Ferric Citrate within its indicated populations, as well as be precluded from studying Ferric Citrate in additional indications and populations and in new formulations; and

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government investigations or lawsuits, including class action suits, may be brought against us.

Any of the above occurrences would harm or prevent sales of Ferric Citrate, likely increase our expenses and impair our ability to successfully commercialize Ferric Citrate.

Furthermore, as we explore development opportunities to enhance the clinical profile of Ferric Citrate, any clinical trials conducted, if successful, may expand the patient populations treated with Ferric Citrate within or outside of its current indications or patient populations, which could result in the identification of previously unknown side effects, increased frequency or severity of known side effects, or detection of unexpected safety signals.�In addition, now that Ferric Citrate will soon be commercially available, it will be used in a wider population and in less rigorously controlled environments than in clinical studies.�As a result, regulatory authorities, healthcare practitioners, third party payers or patients may perceive or conclude that the use of Ferric Citrate is associated with serious adverse effects, undermining our commercialization efforts.

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We rely on third parties to manufacture and analytically test our drug. If these third parties do not successfully manufacture and test our drug, our business will be harmed.

We have limited experience in manufacturing products for clinical or commercial purposes. We intend to continue, in whole or in part, to use third parties to manufacture and analytically test our drug for use in clinical trials and for future commercial distribution. We may not be able to enter into future contract agreements with these third-parties on terms acceptable to us, if at all.

Our ability to conduct clinical trials, manufacture and commercialize our drug will depend on the ability of such third parties to manufacture our drug on a large scale at a competitive cost and in accordance with current Good Manufacturing Practice regulations, (�cGMPs�), and other regulatory requirements, including requirements from federal, state and local environmental and safety regulatory agencies and foreign regulatory requirements, if applicable. Significant scale-up of manufacturing may result in unanticipated technical challenges and will require validation studies that are subject to FDA inspection. Scale-up/technology transfer activities can be complex, and insufficient process knowledge can result in a poorly scaled up process with inadequate process control. A lack of process control can lead to increased deviations during the manufacturing process, out of specification test results, batch rejection and the possible distribution of drug products that do not conform to predetermined specifications. In addition, a variety of factors can affect a contract manufacturer�s qualifications to produce acceptable product, including deficiencies in the contractor�s quality unit, lack of training, a shortage of qualified personnel, capacity constraints and changes in the contractor�s commercial or quality related priorities. Any of these difficulties, if they occur, and are not overcome to the satisfaction of the FDA or other regulatory agency, could lead to significant delays and possibly the termination of the development program for our drug, particularly given that some of the third parties we intend to employ in the manufacturing process are single source providers. These risks become more acute as we scale up for commercial quantities, where a reliable source of active pharmaceutical ingredient (�API�) and a qualified contract manufacturer become critical to commercial success. For example, given the large quantity of materials required for Ferric Citrate production and the large quantities of Ferric Citrate that will be required for commercial success, the commercial viability of Ferric Citrate will also depend on adequate supply of starting materials that meet quality, quantity and cost standards and the ability of our contract manufacturers to produce the API and finished drug product on a commercial scale. Failure to achieve this level of supply can jeopardize and prevent the successful commercialization of the product. Moreover, issues that may arise in our scale-up/technology transfer of Ferric Citrate can lead to significant delays in our development and commercial timelines.

Our third-party manufacturers may not perform as required under the terms of our supply agreement or quality agreement, or may not remain in the contract manufacturing business for the time required by us to successfully manufacture and distribute our drug. In addition, our contract manufacturers will be subject to ongoing periodic and unannounced inspections by the FDA and corresponding foreign governmental agencies to ensure strict compliance with cGMPs, as well as other governmental regulations and corresponding foreign standards. While we periodically audit our contractors for adherence to regulatory requirements, and are ultimately held responsible for their regulatory compliance, we cannot assure you that unforeseen changes at these contractors will not occur that could change their regulatory standing. The same issues apply to contract analytical services which we use for quality, impurity and release testing of our drug. We are required by law to establish adequate oversight and control over raw materials, components and finished products furnished by our third-party manufacturers, which we establish by contract, supplier qualification and periodic audits, but unforeseen circumstances could affect our third-party manufacturers� compliance with applicable regulations and standards. As we continue to scale up production, we continue to develop analytical tools for Ferric Citrate drug substance and drug product testing. Failure to develop effective analytical tools could result in regulatory or technical delay or could jeopardize our ability to obtain FDA approval. Moreover, even with effective analytical methods available, there is no assurance that we will be able to analyze all the raw materials and qualify all impurities to the satisfaction of the FDA, possibly requiring additional analytical studies, analytical method development, or preclinical studies, which could significantly delay our ability to receive regulatory approvals for our drug. Additionally, changes in the analytical specifications required by the FDA or other regulatory authority, such as United States Pharmacopeial Convention standards, from time to time, could delay our ability to receive regulatory approvals for our drug or our commercial efforts. Switching or engaging multiple third-party contractors to produce our drug substance or drug product may be difficult and time consuming because the number of potential manufacturers may be limited and the process by which multiple manufacturers make the drug substance or drug product must meet established specifications at each manufacturing facility. It may be difficult and time consuming for us to find and engage replacement or multiple manufacturers quickly and on terms acceptable to us, if at all. For Ferric Citrate, the loss of any of our drug substance or drug product manufacturers would result in significant additional costs and delays in our development program. Moreover, if we need to add or change manufacturers after commercialization, the FDA and corresponding foreign regulatory agencies must approve any new manufacturers in advance, which will involve additional inspections to ensure compliance with FDA and foreign regulations and standards.

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If we do not establish or maintain manufacturing, drug development and marketing arrangements with third parties, we may be unable to commercialize our products.

We do not possess all of the capabilities to fully commercialize our product on our own. From time to time, we may need to contract with additional third parties, or renew or revise contracts with existing third parties, to:

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manufacture our drug;

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assist us in developing, testing and obtaining regulatory approval for and commercializing our compound and technologies; and

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market and distribute our drug.

We can provide no assurance that we will be able to successfully enter into agreements with such third parties on terms that are acceptable to us, if at all. If we are unable to successfully contract with third parties for these services when needed, or if existing arrangements for these services are terminated, whether or not through our actions, or if such third parties do not fully perform under these arrangements, we may have to delay, scale back or end one or more of our drug development programs or seek to develop or commercialize our product independently, which could result in significant delays. Furthermore, such failure could result in the termination of license rights to our product. If these manufacturing, development or marketing agreements take the form of a partnership or strategic alliance, such arrangements may provide our collaborators with significant discretion in determining the efforts and resources that they will apply to the development and commercialization of our product. We cannot predict the form or scope that any such collaboration might take, and we may pursue other strategic alternatives if terms or proposed collaborations are not attractive. To the extent that we rely on third parties to research, develop or commercialize our product, we are unable to control whether such product will be scientifically or commercially successful. Additionally, if these third parties fail to perform their obligations under our agreements with them or fail to perform their work in a satisfactory manner, in spite of our efforts to monitor and ensure the quality of such work, we may face delays in achieving the business or regulatory milestones required for commercialization of our current drug and any future drug candidate.

We will incur significant liability if it is determined that we are promoting any �off-label� use of Ferric Citrate.

Physicians are permitted to prescribe drug products for uses that are not described in the product�s labeling and that differ from those approved by the FDA or other applicable regulatory agencies. Such �off-label� uses are common across medical specialties. Although the FDA and other regulatory agencies do not regulate a physician�s choice of treatments, the FDA and other regulatory agencies do restrict communications on the subject of off-label use. Companies are not permitted to promote drugs for off-label uses or promote drugs using marketing claims that are not otherwise consistent with the FDA-approved labeling, including comparative or superiority claims that are not consistent with the FDA-approved labeling or supported by substantial evidence. Accordingly, we may not promote Ferric Citrate in the U.S. for use in any indications other than for the control of serum phosphorus levels in patients with CKD on dialysis and all promotional claims must be consistent with the FDA-approved labeling for Ferric Citrate. The FDA and other regulatory and enforcement authorities actively enforce laws and regulations prohibiting promotion of off-label uses and the promotion of products for which marketing approval has not been obtained as well as the false advertising or misleading promotion of drugs. A company that is found to have improperly promoted off-label uses or to have otherwise engaged in false or misleading promotion of drugs will be subject to significant liability, including civil and administrative remedies as well as criminal sanctions.

Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific exchange concerning their products in certain circumstances. We intend to engage in medical education activities and communicate with healthcare providers in compliance with all applicable laws, regulatory guidance and industry best practices. Although we believe we have put in place a robust compliance program designed to ensure that all such activities are performed in a legal and compliant manner, Ferric Citrate is our first commercial product, so our implementation of our compliance program in connection with commercialization activities is still relatively new.

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If we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected.

As a manufacturer of pharmaceuticals, even though we do not (and do not expect in the future to) control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payers, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients� rights are and will be applicable to our business. We are subject to healthcare fraud and abuse and patient privacy regulation by both the federal government and the states in which we conduct our business.�The regulations include:

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federal healthcare program anti-kickback laws, which prohibit, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

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federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, and which may apply to entities like us which provide coding and billing advice to customers;

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the federal Health Insurance Portability and Accountability Act of 1996, which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;

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the Federal Food, Drug, and Cosmetic Act, which among other things, strictly regulates drug product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples;

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state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts;

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the federal Foreign Corrupt Practices Act which prohibits corporations and individuals from paying, offering to pay, or authorizing the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity; and

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the federal Physician Payments Sunshine Act, which was passed as part of the Patient Protection and Affordable Care Act of 2010, and similar state laws in certain states, that require pharmaceutical and medical device companies to monitor and report payments, gifts, the provision of samples and other remuneration made to physicians and other healthcare professionals and healthcare organizations.

If our operations are found to be in violation of any of the laws described above or any other laws, rules�or regulations that apply to us, we will be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results.

In preparation for the commercial launch of Ferric Citrate, we assembled an experienced compliance team who compiled a program based on industry best practices that is designed to ensure that our commercialization of Ferric Citrate complies with all applicable laws, regulations and industry standards. We also hire, manage and incentivize our employees around a culture of compliance, trust, respect and ownership. Because our program is relatively new and the requirements in this area are constantly evolving, we cannot be certain that our program will eliminate all areas of potential exposure. Although compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management�s attention from the operation of our business, as well as damage our business or reputation. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security, fraud and reporting laws may prove costly.

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If our competitors develop and market products that are less expensive, more effective or safer than our drug product, or our drug product does not achieve market acceptance vis-�-vis existing treatments, our commercial opportunities may be reduced or eliminated.

The pharmaceutical industry is highly competitive. Our competitors include pharmaceutical companies and biotechnology companies, as well as universities and public and private research institutions. In addition, companies that are active in different but related fields represent substantial competition for us. Many of our competitors have significantly greater capital resources, larger research and development staffs and facilities and greater experience in drug development, regulation, manufacturing and marketing than we do. These organizations also compete with us to recruit qualified personnel, attract partners for joint ventures or other collaborations, and license technologies that are competitive with ours. As a result, our competitors may be able to more easily develop technologies and products that could render our drug product obsolete or noncompetitive. To compete successfully in this industry we must identify novel and unique drugs or methods of treatment and then complete the development of those drugs as treatments in advance of our competitors.

Ferric Citrate will compete in the U.S. with other FDA approved phosphate binders such as Renagel^� (sevelamer hydrochloride) and Renvela^� (sevelamer carbonate), both marketed by Genzyme Corporation (a wholly-owned subsidiary of Sanofi), PhosLo^� (calcium acetate), marketed by Fresenius Medical Care, Fosrenol^� (lanthanum carbonate), marketed by Shire Pharmaceuticals Group plc, and Velphoro^� (sucroferric oxyhydroxide), marketed by Fresenius Medical Care North America, as well as over-the-counter calcium carbonate products such as TUMS^� and metal-based options such as aluminum and magnesium. Our strategy to compete against these existing treatments depends in part on physicians and patients accepting that Ferric Citrate is differentiated in the marketplace versus these FDA approved phosphate binders. In addition, we may have to compete against existing treatments on price, which becomes more challenging as generic versions of these existing treatments come to market. For example, an authorized generic of Renvela^� was launched in the U.S. in April 2014 by Impax Laboratories, Inc. under a settlement agreement with Genzyme whereby Genzyme agreed to grant Impax a license to sell a one-time allotment of a specified number of bottles of an authorized generic version of Renvela^� tablets. Impax is also pursuing approval of its pending Abbreviated New Drug Application for generic Renvela^� with the FDA. In addition, a generic formulation of PhosLo^� manufactured by Roxane Laboratories, Inc. was launched in the U.S. in October 2008. In addition, upon the expiration of its core patents, generic formulations of Fosrenol^� may be launched. These generic formulations could have a material effect on the pricing of phosphate binders.

In addition, our commercial opportunities may be reduced or eliminated if our competitors develop and market products that are less expensive, more effective or safer than our drug product. Other companies have drug candidates in various stages of pre-clinical or clinical development to treat diseases for which we are also seeking to acquire and develop drug products. Even if we are successful in developing effective drugs, our product(s) may not compete successfully with products produced by our competitors.

If we lose our key personnel or are unable to attract and retain additional personnel, our operations could be disrupted and our business could be harmed.

As of October�31, 2014, we had 92 full and part-time employees. To successfully develop and commercialize our drug, we must be able to attract and retain highly skilled personnel. Our limited resources may hinder our efforts to attract and retain highly skilled personnel. In addition, if we lose the services of our current personnel, in particular, Ron Bentsur, our Chief Executive Officer and Greg Madison, our Chief Operating Officer, our ability to continue to execute on our business plan could be materially impaired. Although we have employment agreements with Mr.�Bentsur and Mr.�Madison, such agreements do not prevent either of them from terminating their respective employment with us.

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Risks associated with our product development efforts

If we do not receive regulatory approvals to market our product candidate in a timely manner, or at all, our business will be materially harmed and our stock price may be adversely affected.

We are developing Ferric Citrate, an oral, ferric iron-based compound that has the capacity to bind to phosphate and form non-absorbable complexes. In May 2011, we announced positive Scientific Advice from the European Medicines Agency, or EMA, for the development of Ferric Citrate for the management and control of serum phosphorus in CKD patients undergoing dialysis, and in non-dialysis dependent CKD patients. The Scientific Advice from the EMA indicates that our successful Phase 3 program in dialysis in the U.S., in conjunction with safety data generated from other clinical studies with Ferric Citrate, will be considered sufficient to support a European marketing authorization application, or MAA, to the EMA for the indication in CKD patients on dialysis. The Scientific Advice also provided us with a regulatory path forward in the non-dialysis dependent CKD setting in Europe. As a result, we believe that since our Phase 3 program in dialysis, and Phase 2 study in non-dialysis dependent CKD, in the U.S. were successful, we will not need to conduct any additional clinical trials to assess the safety or efficacy of Ferric Citrate in order to obtain European approval in CKD, including the dialysis and non-dialysis dependent CKD, or NDD-CKD, settings. Accordingly, in March 2014, we submitted a MAA with the EMA for both dialysis and NDD-CKD, which was validated by the EMA in March 2014. Scientific Advice is legally non-binding and is based on the current scientific knowledge, which may be subject to future changes. Many companies which have been provided with positive Scientific Advice by the EMA have ultimately failed to obtain approval of an MAA for their drugs. Additionally, even if the primary endpoint in a Phase 3, or other pivotal, clinical trial is achieved, the Scientific Advice does not guarantee approval. The EMA may raise issues of safety, study conduct, bias, deviation from the protocol, statistical power and analyses, patient demographics, patient completion rates, changes in scientific or medical parameters or internal inconsistencies in the data prior to making its final decision, which may delay or prevent EMA approval of Ferric Citrate.

Obtaining approval of an MAA by the EMA is highly uncertain and like many product candidates, we may fail to obtain the approval even though our MAA has been validated by the EMA. The MAA review processes are extensive, lengthy, expensive and uncertain, and the EMA may delay, limit or deny approval of Ferric Citrate for many reasons, including:

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we may not be able to demonstrate to the satisfaction of the respective regulatory authority that Ferric Citrate is safe and effective for any indication;

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the data arising from the clinical trials, including the Phase 3 results for dialysis patients and our Phase 2 results for non-dialysis dependent CKD, the development program or the MAA for Ferric Citrate may not be satisfactory to the EMA;

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the EMA may disagree with the number, design, size, conduct or implementation of our clinical trials or conclude that the data fails to meet statistical or clinical significance;

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the EMA may not find the data from preclinical and clinical studies sufficient to demonstrate that Ferric Citrate �s clinical and other benefits outweigh its safety risks;

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the EMA may disagree with our interpretation of data from preclinical studies or clinical trials, and may reject conclusions from preclinical studies or clinical trials, or determine that primary or secondary endpoints from clinical trials were not met, or reject safety conclusions from such studies;

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the EMA may not accept data generated at one or more of our clinical trial sites;

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the EMA may determine that we did not properly oversee our clinical trials or follow the regulatory authority�s advice or recommendations in conducting our clinical trials;

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an advisory committee, if convened by the EMA, may recommend against approval of our application or may recommend that the respective regulatory authority require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions, or even if an advisory committee, if convened, makes a favorable recommendation, the respective regulatory authority may still not approve Ferric Citrate;

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data and analyses submitted to the EMA in response to questions raised during the review processes may not be satisfactory to the respective regulatory authority, and this may lead to significant delays in the approval of Ferric Citrate or to the rejection of the Ferric Citrate MAA; and

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the EMA may identify deficiencies in the chemistry, manufacturing and controls, or CMC, sections of our MAA, our manufacturing processes, facilities or analytical methods or those of our third party contract manufacturers, and this may lead to significant delays in the approval of Ferric Citrate or to the rejection of the Ferric Citrate MAA.

Additionally, our March 2014 MAA submission to the EMA was our first MAA filing in Europe. During the regulatory review process, regulatory agencies will typically ask questions of drug sponsors, such as the Day 120

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questions which we recently received from the EMA. We will endeavor to answer all such questions in a timely and complete fashion; however, we cannot assure you that our answers to such questions will be complete and to the satisfaction of the regulatory agencies. If certain questions asked have not been fully and satisfactorily answered by us, approval of our filings may be delayed, or the filings may be rejected.

Accordingly, we may not receive the regulatory approvals needed to market Ferric Citrate. Any failure or delay in completion of the development program or the EMA review processes would delay or foreclose commercialization of Ferric Citrate and severely harm our business and financial condition.

If we are unable to successfully complete our clinical trial programs, or if such clinical trials take longer to complete than we project, our ability to execute our current business strategy will be adversely affected.

Whether or not and how quickly we complete our clinical trials is dependent in part upon the rate at which we are able to engage clinical trial sites and, thereafter, the rate of enrollment of patients, and the rate we collect, clean, lock and analyze the clinical trial database. Patient enrollment is a function of many factors, including the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the study, the existence of competitive clinical trials, and whether existing or new drugs are approved for the indication we are studying. We are aware that other companies are currently conducting or planning clinical trials that seek to enroll patients with the same disease that we are studying. If we experience delays in identifying and contracting with sites and/or in patient enrollment in our clinical trial programs, we may incur additional costs and delays in our development programs, and may not be able to complete our clinical trials in a cost-effective or timely manner or at all. In addition, conducting multi-national studies adds another level of complexity and risk. As a result, we may be subject to events affecting countries outside the U.S.

Negative or inconclusive results from the clinical trials we conduct, such as the ongoing Phase 3 study of Ferric Citrate for the treatment of iron deficiency anemia in patients with NDD-CKD, or unanticipated adverse medical events could cause us to have to repeat or terminate the clinical trials. For example, in May 2012, we abandoned our development efforts and terminated our license for KRX-0401 (perifosine) following negative results from the Phase 3 trial. We may also opt to change the delivery method, formulation or dosage which could affect efficacy results for the drug. Accordingly, we may not be able to complete our current or future clinical trials within an acceptable time frame, if at all.

Pre-clinical testing and clinical development are long, expensive and uncertain processes. If our drug does not receive the necessary regulatory approvals, we will be unable to commercialize our drug, Ferric Citrate in Europe.

We have not received, and may never receive, regulatory approval for the commercial sale of Ferric Citrate by the EMA. We may need to conduct significant additional research and human testing before we receive product approval with the EMA or with regulatory authorities of other countries. Pre-clinical testing and clinical development are long, expensive and uncertain processes. Satisfaction of regulatory requirements typically depends on the nature, complexity and novelty of the product. It requires the expenditure of substantial resources. Data obtained from pre-clinical and clinical tests can be interpreted in different ways, which could delay, limit or prevent regulatory approval. The EMA or a regulatory authority of another country, as applicable, may pose additional questions or request further toxicological, drug-drug interaction, pre-clinical or clinical data or substantiation. For example, while Ferric Citrate is a Generally Recognized as Safe, or GRAS, substance in the U.S., and the EMA has not requested that we conduct a two-year carcinogenicity study in animals, there is no assurance that the EMA or some other regulatory authority will not ask us to conduct such a study in order to obtain regulatory approval. In addition, the EMA has not requested us to conduct reproductive toxicity, genotoxicity and single-dose toxicity studies and we are referencing such studies from the published scientific literature in our regulatory submissions. However, we can provide no assurance that the EMA will not ask us to conduct additional studies. We recently received Day 120 questions from the EMA on our MAA. We are working on responses to the EMA�s questions and intend to submit such responses in a timely manner, but we cannot assure you that we will answer these questions to the EMA�s satisfaction or that the EMA will not have additional questions as part of the MAA review. Consequently, it may take us many years to complete the testing of our drug and failure can occur at any stage of this process. Negative, inconclusive, or insufficient results or medical events during a pre-clinical or clinical trial could cause us to delay or terminate our development efforts. Furthermore, interim results of preclinical or clinical studies do not necessarily predict their final results, and acceptable results in early studies might not be obtained in later studies.

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Safety signals detected during clinical studies and pre-clinical animal studies, such as the gastrointestinal bleeding and liver toxicities that have been seen in some high-dose Ferric Citrate canine studies, may require us to perform additional safety studies or analyses, which could delay the development of the drug or lead to a decision to discontinue development of the drug. We have submitted to the EMA data from our short-term and long-term rat and canine pre-clinical studies for Ferric Citrate. While the EMA has reviewed the data from these studies and we have conducted our Phase 3 clinical program for CKD patients on dialysis, and Phase 2 study in non-dialysis dependent CKD patients, we can provide no assurance that the EMA will not raise any safety concerns in the future from these studies. Drug candidates in the later stages of clinical development may fail to show the desired traits of safety and efficacy despite positive results in earlier clinical testing. Moreover, the risk remains that the safety and efficacy data from our pivotal Phase 3 program for dialysis dependent CKD patients may be insufficiently persuasive for the approval of the drug, or may raise safety concerns that may prevent approval of the drug, for the indication sought. The risk also remains that a clinical program conducted by one of our partners may raise efficacy or safety concerns that may prevent approval of the drug. In addition, qualitative, quantitative and statistical interpretation of any of the prior pre-clinical and clinical safety and efficacy data of our drug may be viewed as flawed by the EMA or any other regulatory agency. In addition, there can be no assurance that safety and/or efficacy concerns from the prior data were not overlooked or misinterpreted by us or our consultants, which in subsequent, larger studies might appear and prevent approval of such drug candidate. In addition, top-line results reported on completed clinical trials, such as those from our long-term open label extension, or OLE, study for Ferric Citrate in dialysis-dependent CKD patients, are based on a preliminary analysis of then available data (both safety and efficacy) and there is the risk that such findings and conclusions could change following a more comprehensive review of the data by a regulatory authority. For example, in January 2013, we announced successful top-line results from our long-term Phase 3 study of Ferric Citrate for the treatment of elevated serum phosphorus levels, or hyperphosphatemia, in patients with ESRD on dialysis. Updated results from the study were presented in June 2013 at the World Congress of Nephrology. We can provide no assurance that our findings and conclusions from our long-term Phase 3 study of Ferric Citrate or from our long-term OLE study for Ferric Citrate in dialysis-dependent CKD patients will not change following a more comprehensive review of the data by a regulatory authority.

Clinical trials have a high risk of failure. A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered significant setbacks in advanced clinical trials, even after achieving what appeared to be promising results in earlier trials. We experienced such a setback with our Phase 3 KRX-0401 (perifosine) results in April 2012, and we can provide no assurance that we will not experience such setbacks with Ferric Citrate or any other drug candidate we develop. If we experience delays in the testing or approval process for our existing drug or if we need to perform more or larger clinical trials than originally planned, our financial results and the commercial prospects for our drug may be materially impaired. In addition, we have limited experience in conducting and managing the clinical trials necessary to obtain regulatory approval. Accordingly, we may encounter unforeseen problems and delays in the approval process. Although we engage, from time to time, clinical research organizations with experience in conducting regulatory trials, errors in the conduct, monitoring, data capture and analysis, and/or auditing could potentially invalidate the results.

Because all of our proprietary technologies are licensed or sublicensed to us by third parties, termination of these license rights would prevent us from developing and commercializing Ferric Citrate.

We do not own our drug, Ferric Citrate. We have licensed and sublicensed the rights, patent or otherwise, to Ferric Citrate from a third party, Panion�& BF Biotech, Inc., or Panion, who in turn licenses certain rights to Ferric Citrate from one of the inventors of Ferric Citrate. The license agreement with Panion requires us to meet development milestones and imposes development and commercialization due diligence requirements on us. In addition, under the agreement, we must pay royalties based on a mid-single digit percentage of net sales of product resulting from the licensed technologies (including Ferric Citrate) and pay the patent filing, prosecution and maintenance costs related to the license. If we do not meet our obligations in a timely manner or if we otherwise breach the terms of our license agreement (including upon certain insolvency events), Panion could terminate the agreement, and we would lose the rights to Ferric Citrate. In addition, if Panion breaches its agreement with the inventor from whom it licenses rights to Ferric Citrate, Panion could lose its license, which could impair or delay our ability to develop and commercialize Ferric Citrate. From time to time, we may have disagreements with our licensors or collaborators, or they and/or we may have disagreements with the original inventors, regarding the terms of our agreements or ownership of proprietary rights, which could lead to delays in the research, development and commercialization of our current drug and any future drug candidate, could require or result in litigation or arbitration, which would be time-consuming and expensive, or could lead to the termination of a license, or force us to negotiate a revised or new license agreement on

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terms less favorable than the original. In addition, in the event that the owners and/or licensors of the rights we license were to enter into bankruptcy or similar proceedings, we could potentially lose our rights to our drug or drug candidates or our rights could otherwise be adversely affected, which could prevent us from developing or commercializing our drugs. Finally, our rights to develop and commercialize Ferric Citrate, whether ourselves or with third parties, are subject to and limited by the terms and conditions of our licenses to Ferric Citrate and the licenses and sublicenses we grant to others.

Our reliance on third parties, such as clinical research organizations, or CROs, may result in delays in completing, or a failure to complete, clinical trials if such CROs fail to perform under our agreements with them.

In the course of product development, we engage CROs and other vendors to conduct and manage clinical studies and to assist us in guiding our products through the FDA review and approval process. If the CROs or applicable vendors fail to perform their obligations under our agreements with them or fail to perform clinical trials in a satisfactory or timely manner, we may face significant delays in completing our clinical trials, submitting our regulatory filings, or approval, as well as the commercialization of one or more drug candidates. Furthermore, any loss or delay in obtaining contracts with such entities may also delay the completion of our clinical trials and the market approval of drug candidate(s).

Other Risks Related to Our Business

Any acquisitions we make may require a significant amount of our available cash and may not be scientifically or commercially successful.

As part of our business strategy, we may effect acquisitions to obtain additional businesses, products, technologies, capabilities and personnel. If we make one or more significant acquisitions in which the consideration includes cash, we may be required to use a substantial portion of our available cash.

Acquisitions involve a number of operational risks, including:

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difficulty and expense of assimilating the operations, technology and personnel of the acquired business;

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our inability to retain the management, key personnel and other employees of the acquired business;

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our inability to maintain the acquired company�s relationship with key third parties, such as alliance partners;

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exposure to legal claims for activities of the acquired business prior to the acquisition;

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the diversion of our management�s attention from our core business; and

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the potential impairment of goodwill and write-off of in-process research and development costs, adversely affecting our reported results of operations.

The status of reimbursement from third-party payors for newly approved health care drugs is uncertain and failure to obtain adequate reimbursement could limit our ability to generate revenue.

Our ability to commercialize Ferric Citrate may depend, in part, on the extent to which reimbursement for the products will be available from:

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government and health administration authorities;

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private health insurers;

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managed care programs; and

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other third-party payors.

Significant uncertainty exists as to the coverage and reimbursement status of newly approved health care products. Third-party payors, including Medicare and Medicaid, are challenging the prices charged for medical products and services. Government and other third-party payors increasingly are attempting to contain health care costs by limiting both coverage and the level of reimbursement for new drugs and by refusing, in some cases, to provide coverage for uses of approved products for disease indications for which the FDA has not granted labeling approval. In 2003, Congress passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which for the

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first time established prescription drug coverage for Medicare beneficiaries, under Medicare Part D. Under this program, beneficiaries purchase insurance coverage from private insurance companies to cover the cost of their prescription drugs. However, third-party insurance coverage may not be available to patients for our product. If government and other third-party payors do not provide adequate coverage and reimbursement levels for our product, its market acceptance may be significantly reduced.

Health care reform measures could adversely affect our business.

The business prospects and financial condition of pharmaceutical and biotechnology companies are affected by the efforts of governmental and third-party payors to contain or reduce the costs of health care. In the U.S. and in foreign jurisdictions there have been, and we expect that there will continue to be, a number of legislative and regulatory proposals aimed at changing the health care system, such as proposals relating to the pricing of healthcare products and services in the U.S. or internationally, the reimportation of drugs into the U.S. from other countries (where they are then sold at a lower price), and the amount of reimbursement available from governmental agencies or other third party payors. For example, drug manufacturers are required to have a national rebate agreement with the Department of Health and Human Services, or HHS, in order to obtain state Medicaid coverage, which requires manufacturers to pay a rebate on drugs dispensed to Medicaid patients. On January�27, 2012, the Centers for Medicare and Medicaid Services, or CMS, issued a proposed regulation covering the calculation of Average Manufacturer Price, or AMP, which is the key variable in the calculation of these rebates.

Furthermore, in the U.S., health care reform legislation titled the Patient Protection and Affordable Care Act, or PPACA, was signed into law in March 2010. The impact of this legislation on our business is inherently difficult to predict as many of the details regarding the implementation of this legislation have not been determined. In a decision issued on June�29, 2012, the United States Supreme Court upheld the majority of PPACA. The Court�s decision allows implementation of key provisions impacting drug and device manufacturers to go forward. This includes PPACA changes to the Medicare Part D Program (including closing the �donut hole�), Medicaid Drug Rebate Program (including the definition of AMP), and expansion of the 340B Drug Discount Program. The decision also allows the FDA and CMS to continue with implementation efforts, including related to the Biologics Price Competition and Innovation Act and the Physician Payments Sunshine Act, both of which were enacted as part of the PPACA. Regulations to implement PPACA could result in a decrease in our stock price or limit our ability to raise capital or to obtain strategic partnerships or licenses. Government-financed comparative efficacy research could also result in new practice guidelines, labeling or reimbursement policies that discourages use of our product.

For example, in July 2010, CMS released its final rule to implement a bundled prospective payment system for end-stage renal disease facilities as required by the Medicare Improvements for Patients and Providers Act, or MIPPA. The final rule delayed the inclusion of oral medications without intravenous equivalents, such as phosphate binders, in the bundle until January�1, 2014; however, on January�3, 2013, the United States Congress passed legislation known as the American Taxpayer Relief Act of 2012, which, among other things, delayed by two years the implementation of oral-only end-stage renal disease related drugs, including phosphate binders, in the bundled ESRD prospective payment system, until January�1, 2016. In April 2014, the United States Congress passed legislation known as Protecting Access to Medicare Act of 2014, which, among other things, delays by eight years the implementation of oral-only ESRD related drugs, including phosphate binders, in the bundled ESRD prospective payment system, until January�1, 2024. If phosphate binders are included in the bundle beginning in 2024, separate Medicare reimbursement will no longer be available for phosphate binders, as it is today under Medicare Part D. While it is too early to project the impact bundling may have on the phosphate binder industry, the impact could potentially cause dramatic price reductions for phosphate binders, which could significantly reduce the commercial potential of Ferric Citrate.

On September�27, 2007, the Food and Drug Administration Amendments Act of 2007 was enacted, giving the FDA enhanced post-market authority, including the authority to require post-marketing studies and post-marketing clinical trials related to serious risks, labeling changes based on new safety information, and compliance with risk evaluation and mitigation strategies approved by the FDA. The FDA�s exercise of this authority may result in delays or increased costs during the period of product development, clinical trials and regulatory review and approval, which may also increase costs related to complying with new post-approval regulatory requirements, and increase potential FDA restrictions on the sale or distribution of approved products. Finally, on July�9, 2012, the Food and Drug Administration Safety and Innovation Act was enacted to, among other things, renew the drug user fee program, expand the FDA�s inspection records access and require manufacturers to establish appropriate oversight and controls over their suppliers and the supply chain, including raw material suppliers and contract manufacturers, as a part of cGMP compliance.

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We face product liability risks and may not be able to obtain adequate insurance.

The use of our drug or future drug candidates in clinical trials, and the future sale of any approved drug and new technology, exposes us to liability claims. Although we are not aware of any historical or anticipated product liability claims against us, if we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to cease clinical trials of our drug candidate or limit commercialization of any approved product.

We intend to expand our insurance coverage to include the commercial sale of any approved products if marketing approval is obtained; however, insurance coverage is becoming increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost. We also may not be able to obtain additional insurance coverage that will be adequate to cover product liability risks that may arise. Regardless of merit or eventual outcome, product liability claims may result in:

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decreased demand for a product;

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injury to our reputation;

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our inability to continue to develop a drug candidate;

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withdrawal of clinical trial volunteers; and

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loss of revenues.

Consequently, a product liability claim or product recall may result in losses that could be material.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our suppliers and business partners, as well as personally identifiable information of Ferric Citrate patients, clinical trial participants and employees. We also have outsourced elements of our information technology structure, and as a result, we are managing independent vendor relationships with third parties who may or could have access to our confidential information.�Similarly, our business partners and other third party providers possess certain of our sensitive data. The secure maintenance of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. We, our partners, vendors and other third party providers could be susceptible to third party attacks on our, and their, information security systems, which attacks are of ever increasing levels of sophistication and are made by groups and individuals with a wide range of motives and expertise, including criminal groups. Any such breach could compromise our, and their, networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, and damage our reputation, any of which could adversely affect our business.

Risks related to our financial condition

Our existing capital resources may not be adequate to finance our operating cash requirements for the length of time that we have estimated.

We currently expect that our existing capital resources combined with future anticipated cash flows will be sufficient to operate our business plan. The actual amount of cash that we will need to operate is subject to many factors, including, but not limited to, the timing and expenditures associated with the build-up of inventory and capacity expansion, the timing and expenditures associated with the regulatory review process for our EU MAA filing, the timing and expenditures associated with pre-commercial/commercial activities related to Ferric Citrate, and the timing, design and conduct of clinical trials for Ferric Citrate. As a result of these factors, we may need to seek additional financings to provide the cash necessary to execute our current operations, including beyond the initial commercialization of Ferric Citrate, and to develop any drug candidates we may in-license or acquire.

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Our forecast of the period of time through which our existing capital resources will be adequate to support our current operations is a forward-looking statement that involves risks and uncertainties. The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control. These factors include, but are not limited to, the following:

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the timing and expenditures associated with the build-up of inventory and capacity expansion;

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the timing and expenditures associated with the regulatory review process for our EU MAA filing;

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the timing and expenditures associated with pre-commercial/commercial activities related to Ferric Citrate;

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the timing, design and conduct of, and results from, clinical trials for Ferric Citrate;

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the timing of expenses associated with manufacturing and product development of Ferric Citrate and those proprietary drug candidates that may be in-licensed, partnered or acquired;

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the timing of the in-licensing, partnering and acquisition of new product opportunities;

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the progress of the development efforts of parties with whom we have entered, or may enter, into research and development agreements;

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our ability to achieve our milestones under our licensing arrangement;

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the timing and expenses associated with capital expenditures to expand our manufacturing capabilities;

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the timing and expenses associated with building our own commercial infrastructure to manufacture, market and sell our drug and those that may be in-licensed, partnered or acquired;

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the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and

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the timing and magnitude of cash received from product sales.

If our cash is insufficient to meet future operating requirements, we will have to raise additional funds. If we are unable to obtain additional funds on terms favorable to us or at all, we may be required to cease or reduce our operating activities or sell or license to third parties some or all of our intellectual property. If we raise additional funds by selling additional shares of our capital stock, the ownership interests of our stockholders will be diluted. If we need to raise additional funds through the sale or license of our intellectual property, we may be unable to do so on terms favorable to us, if at all.

Risks related to our intellectual property and third-party contracts

If we are unable to adequately protect our intellectual property, third parties may be able to use our intellectual property, which could adversely affect our ability to compete in the market.

Our commercial success will depend in part on our ability, and the ability of our licensors, to obtain and maintain patent protection on our drug product and technologies, and to successfully defend these patents against third-party challenges. The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions. No consistent policy regarding the breadth of claims allowed in biotechnology patents has emerged to date. Accordingly, the patents we use may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products. Furthermore, others may independently develop similar or alternative drug products or technologies or design around our patented drug product and technologies which may have an adverse effect on our business. If our competitors prepare and file patent applications in the U.S. that claim technology also claimed by us, we may have to participate in interference or derivation proceedings in front of the U.S. Patent and Trademark Office to determine priority of invention, which could result in substantial cost, even if the eventual outcome is favorable to us. Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that before we commercialize any of our products, any related patent may expire or remain in existence for only a short period following commercialization, thus reducing any advantage of the patent. The patents we use may be challenged or invalidated or may fail to provide us with any competitive advantage. As many of the patents we use are licensed or sublicensed from third parties, we may not be able to enforce such licensed patents against third party infringers without the cooperation of the patent owner and the licensor, which may not be forthcoming. In addition, we may not be successful or timely in obtaining any patents for which we submit applications.

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Additionally, the laws of foreign countries may not protect our intellectual property rights to the same extent as do the laws of the U.S. In addition, in jurisdictions outside the U.S. where we have patent rights, we may be unable to prevent unlicensed parties from selling or importing products or technologies derived elsewhere using our proprietary technology.

We also rely on trade secrets and know-how to protect our intellectual property where we believe patent protection is not appropriate or obtainable. Trade secrets are difficult to protect. While we require our employees, licensees, collaborators and consultants to enter into confidentiality agreements, this may not be sufficient to adequately protect our trade secrets or other proprietary information. In addition, we share ownership and publication rights to data relating to our drug product and technologies with our research collaborators and scientific advisors. If we cannot maintain the confidentiality of this information, our ability to receive patent protection or protect our trade secrets or other proprietary information will be at risk.

The intellectual property that we own or have licensed relating to our drug, Ferric Citrate, is limited, which could adversely affect our ability to compete in the market and adversely affect the value of Ferric Citrate.

The patent rights that we own or have licensed relating to Ferric Citrate are limited in ways that may affect our ability to exclude third parties from competing against us. In particular:

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Composition of matter patents can provide protection for pharmaceutical products to the extent that the specifically covered compositions are key, non-interchangeable components of the pharmaceutical product. The first composition of matter and method patent relating to Ferric Citrate in the United States (U.S. Patent No.�5,753,706) expires in February 2017. We license additional composition of matter and use patents expiring in 2024 with independent claims covering forms of ferric citrate (the active pharmaceutical ingredient, or API, of Ferric Citrate), pharmaceutical compositions that include the API, pharmaceutical compositions having ferric citrate in an amount effective to reduce serum phosphate levels, and methods of treating hyperphosphatemia and metabolic acidosis.

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Our methods of use patents, including U.S. Patent Nos. 7,767,851, 8,299,298 and 8,338,642 and (which expire in 2024), and U.S. Patent No.�8,093,423 (which expires in 2028) only protect the product when used or sold for the claimed methods. However, these types of patents do not limit a competitor from making and marketing a product that is identical to our product that is labeled for an indication that is outside of our patented methods, or for which there is a substantial use in commerce outside of our patented methods.

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We have filed applications under the Patent Term Extension provisions of 35 U.S.C. � 156 on the above mentioned patents for delays caused by FDA regulatory review. If granted we can utilize the patent term extension on one of these patents, however, we cannot assure you that we can obtain any extension of the term of these patents. If obtained, the maximum term of extension available under 35 U.S.C. � 156 would extend the term of the chosen patent by no more than five years. Upon expiration of these patents, competitors who obtain the requisite regulatory approval may potentially offer products with the same composition and/or method of use as our product, so long as the competitors do not infringe any other patents that we may hold.

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Our pending patent applications may not issue as patents and may not issue in all countries in which we develop, manufacture or potentially sell our product(s) or in countries where others develop, manufacture and potentially sell products using our technologies. Moreover, our pending patent applications, if issued as patents, may not provide additional protection for our product.

Obtaining proof of direct infringement by a competitor for a method of use patent can be difficult because the competitors making and marketing a product may not engage in the patented use. Additionally, obtaining proof that a competitor contributes to, or induces, infringement of a patented method by another can be difficult because, for example, an off-label use of a product could prohibit a finding of contributory infringement. In addition, proving inducement of infringement requires proof of intent by the competitor. If we are required to defend ourselves against claims or to protect our own proprietary rights against others, it could result in substantial costs to us and the distraction

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of our management. An adverse ruling in any litigation or administrative proceeding could prevent us from marketing and selling Ferric Citrate, increase the risk that a generic version of Ferric Citrate could enter the market to compete with Ferric Citrate, limit our development and commercialization of Ferric Citrate, or otherwise harm our competitive position and result in additional significant costs. In addition, any successful claim of infringement asserted against us could subject us to monetary damages or injunction, which could prevent us from making or selling Ferric Citrate. We also may be required to obtain licenses to use the relevant technology. Such licenses may not be available on commercially reasonable terms, if at all.

Moreover, physicians may prescribe a competitive identical product for indications other than the one for which the product has been approved, or off-label indications, that are covered by the applicable patents. Although such off-label prescriptions may directly infringe or contribute to or induce infringement of method of use patents, such infringement is difficult to prevent or prosecute.

In addition, any limitations of our patent protection described above may adversely affect the value of our product candidate and may inhibit our ability to obtain a corporate partner at terms acceptable to us, if at all.

In addition to patent protection, we may utilize pediatric exclusivity or other provisions of the Food, Drug and Cosmetic Act of 1938, as amended, or FDCA, such as new chemical entity exclusivity, or NCE, or new formulation exclusivity, to provide market exclusivity for a drug candidate.

In the U.S., the FDA has the authority to grant additional data protection for approved drugs where the sponsor conducts specified testing in pediatric or adolescent populations. If granted, this pediatric exclusivity provides an additional six months which are added to the term of data protection as well as to the term of a relevant patent, to the extent these protections have not already expired.

The FDCA provides a five-year period of non-patent marketing exclusivity within the U.S. to the first applicant to gain approval of an NDA for a New Chemical Entity, or NCE. A drug is an NCE if the FDA has not previously approved any other new drug containing the same active moiety, which consists of the molecule(s) or ion(s) responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application (for example, for new indications, dosages, or strengths of an existing drug). This three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay the submission or tentative approval of a full ANDA; however, an applicant submitting a full ANDA would be required to conduct sufficient studies to demonstrate that their generic product is bioequivalent to Ferric Citrate.

We may also seek to utilize market exclusivities in other territories, such as in the EU.

We cannot assure that our drug, Ferric Citrate, or any drug candidates we may acquire or in-license, will obtain such pediatric exclusivity, new chemical entity exclusivity or any other market exclusivity in the U.S., EU or any other territory, or that we will be the first to receive the respective regulatory approval for such drugs so as to be eligible for any market exclusivity protection.

Litigation or third-party claims could require us to spend substantial time and money defending such claims and adversely affect our ability to develop and commercialize our product.

We may be forced to initiate litigation to enforce our contractual and intellectual property rights, or we may be sued by third parties asserting claims based on contract, tort or intellectual property infringement. In addition, third parties may have or may obtain patents in the future and claim that Ferric Citrate or any other technologies infringe their patents. If we are required to defend against suits brought by third parties, or if we sue third parties to protect our rights, we may be required to pay substantial litigation costs, and our management�s attention may be diverted from operating our business. In addition, any legal action against our licensor or us that seeks damages or an injunction of

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our commercial activities relating to Ferric Citrate or other technologies could subject us to monetary liability, a temporary or permanent injunction preventing the development, marketing and sale of Ferric Citrate or such technologies, and/or require our licensor or us to obtain a license to continue to use Ferric Citrate or other technologies. We cannot predict whether our licensor or we would prevail in any of these types of actions or that any required license would be made available on commercially acceptable terms, if at all.

Risks Related to Our Common Stock

Future sales or other issuances of our common stock could depress the market for our common stock.

Sales of a substantial number of shares of our common stock, or the perception by the market that those sales could occur, could cause the market price of our common stock to decline or could make it more difficult for us to raise funds through the sale of equity in the future.

On August�2, 2013, we filed with the SEC a shelf registration statement on Form S-3 (File No.�333-190353), which the SEC declared effective on August�16, 2013, providing for the offering of up to $150 million of our common stock and warrants to purchase our common stock. Subsequent to the underwritten public offering that was completed on January�23, 2014, there remains approximately $34.9 million of our common stock and warrants available for sale on this shelf registration statement.

We may need to seek additional financing to provide cash necessary to execute our current operations, including beyond the initial commercialization of Ferric Citrate, and to develop any drug candidates we may in-license or acquire. Future issuances of common stock could depress the market for our common stock.

If we make one or more significant acquisitions in which the consideration includes stock or other securities, our stockholders� holdings may be significantly diluted. In addition, stockholders� holdings may also be diluted if we enter into arrangements with third parties permitting us to issue shares of common stock in lieu of certain cash payments upon the achievement of milestones.

Our stock price can be volatile, which increases the risk of litigation, and may result in a significant decline in the value of your investment.

The trading price of our common stock is likely to be highly volatile and subject to wide fluctuations in price in response to various factors, many of which are beyond our control. These factors include:

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developments concerning our drug or future drug candidates, including the safety and efficacy results from clinical trials and regulatory filings and approvals;

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announcements of technological innovations by us or our competitors;

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introductions or announcements of new products by us or our competitors;

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announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments involving us or our competitors;

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changes in financial estimates by securities analysts or inability to meet consensus analyst product sales estimates;

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actual or anticipated variations in quarterly or annual operating results;

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expectations regarding our financial condition;

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expiration or termination of licenses, research contracts or other collaboration agreements;

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developments relating to our intellectual property and those of our competitors, including but not limited to, the commercialization of generic products;

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expectations or investor speculation regarding the strength of our intellectual property position, or the availability of regulatory exclusivity;

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conditions or trends in the regulatory climate and the biotechnology and pharmaceutical industries;

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changes in the market valuations of similar companies;

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negative comments and sentiment in the media; and

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additions or departures of key personnel.

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In addition, equity markets in general, and the market for biotechnology and life sciences companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies traded in those markets. These broad market and industry factors may materially affect the market price of our common stock, regardless of our development and operating performance. In the past, following periods of volatility in the market price of a company�s securities, securities class-action litigation has often been instituted against that company. Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims and divert management�s attention and resources, which could seriously harm our business.

Certain anti-takeover provisions in our charter documents and Delaware law could make a third-party acquisition of us difficult. This could limit the price investors might be willing to pay in the future for our common stock.

Provisions in our amended and restated certificate of incorporation and bylaws could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, or control us. These factors could limit the price that certain investors might be willing to pay in the future for shares of our common stock. Our amended and restated certificate of incorporation allows us to issue preferred stock without the approval of our stockholders. The issuance of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of our common stock or could adversely affect the rights and powers, including voting rights, of such holders. In certain circumstances, such issuance could have the effect of decreasing the market price of our common stock. Our amended and restated bylaws eliminate the right of stockholders to call a special meeting of stockholders, which could make it more difficult for stockholders to effect certain corporate actions. Any of these provisions could also have the effect of delaying or preventing a change in control.

ITEM�6. EXHIBITS

The exhibits listed on the Exhibit Index are included with this report.

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��3.1	��	Amended and Restated Certificate of Incorporation of Keryx Biopharmaceuticals, Inc., as amended, filed as Exhibit 3.1 to the Registrant�s Annual Report on Form 10-Q for the quarter ended September�30, 2004, filed on August�12, 2004, and incorporated herein by reference.

��3.2	��	Amended and Restated Bylaws of Keryx Biopharmaceuticals, Inc., filed as Exhibit 3.2 to the Registrant�s Annual Report on Form 10-K for the year ended December 31, 2001, filed on March 26, 2002, and incorporated herein by reference.

��3.3	��	Amendment Number 2 to Amended and Restated Certificate of Incorporation of Keryx Biopharmaceuticals, Inc., dated July 24, 2007, filed as Exhibit 3.3 to the Registrant�s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, filed on August 9, 2007 and incorporated herein by reference.

��3.4	��	Amendment Number 3 to Amended and Restated Certificate of Incorporation of Keryx Biopharmaceuticals, Inc. dated June 18, 2013, filed as Exhibit 3.4 to the Registrant�s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, filed on August 2, 2013 and incorporated herein by reference.

10.1*	��	Manufacturing Services Agreement, dated January 17, 2014, by and between Keryx Biopharmaceuticals, Inc. and Norwich Pharmaceuticals, Inc.

10.2*	��	First Addendum to Manufacturing Services Agreement, dated October 24, 2014, by and between Keryx Biopharmaceuticals, Inc. and Norwich Pharmaceuticals, Inc.

31.1	��	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November 6, 2014.

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��31.2	��	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November�6, 2014.

��32.1	��	Certification of Chief Executive Officer pursuant to 18 U.S.C. �1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated November 6, 2014.

��32.2	��	Certification of Chief Financial Officer pursuant to 18 U.S.C. �1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated November 6, 2014.

��101	��	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii)�Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders� Equity, (iv)�Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.

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*	Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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KERYX BIOPHARMACEUTICALS, INC.

Date: November�6, 2014

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By:

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/s/ James F. Oliviero, CFA

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Chief Financial Officer

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Principal Financial and Accounting Officer

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EXHIBIT INDEX

The following exhibits are included as part of this Quarterly Report on Form 10-Q:

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��10.1*	��	Manufacturing Services Agreement, dated January�17, 2014, by and between Keryx Biopharmaceuticals, Inc. and Norwich Pharmaceuticals, Inc.

��10.2*	��	First Addendum to Manufacturing Services Agreement, dated October 24, 2014, by and between Keryx Biopharmaceuticals, Inc. and Norwich Pharmaceuticals, Inc.

��31.1	��	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November 6, 2014.

��31.2	��	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated November 6, 2014.

��32.1	��	Certification of Chief Executive Officer pursuant to 18 U.S.C. �1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated November 6, 2014.

��32.2	��	Certification of Chief Financial Officer pursuant to 18 U.S.C. �1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated November 6, 2014.

��101	��	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, (ii)�Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders� Equity, (iv)�Consolidated Statements of Cash Flows, and (v)�the Notes to Consolidated Financial Statements.

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*	Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed separately with the Securities and Exchange Commission.

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Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED. Confidential portions of this document have been redacted and have been separately filed with the Commission.

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LOGO

Manufacturing Services Agreement

January�17, 2014

Table of Contents

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ARTICLE 1	��	�	1	��

INTERPRETATION	��	�	1	��

1.1.��DEFINITIONS	��	�	1	��
1.2.��CURRENCY	��	�	5	��
1.3.��SCHEDULES	��	�	5	��
1.4.��KERYX AND ITS AFFILIATES	��	�	5	��

ARTICLE 2	��	�	6	��

NPI�S MANUFACTURING SERVICES	��	�	6	��

2.1��MANUFACTURING SERVICES	��	�	6	��
2.2��TECHNICAL SERVICES	��	�	8	��
2.3��PRESENTATIONS, PUBLICATIONS AND PUBLICITY	��	�	8	��
2.4��INSPECTION OF API; RISK OF LOSS	��	�	9	��

ARTICLE 3	��	�	9	��

CUSTOMER�S OBLIGATIONS	��	�	9	��

3.1��PAYMENT	��	�	9	��
3.2��SUPPLY OF API AND OTHER MATERIALS, TITLE; RISK OF LOSS	��	�	10	��
3.3��DISPOSAL OF UNUSED AND WASTE MATERIALS	��	�	10	��
3.4��CUSTOMER COMPLIANCE	��	�	10	��
3.5��NPI COMPLIANCE	��	�	10	��

ARTICLE 4	��	�	11	��

FEES AND COMPONENT COSTS	��	�	11	��

4.1��FIRST YEAR PRICING	��	�	11	��
4.2��PRICE ADJUSTMENTS - ANNUAL OR YEAR OVER YEAR PRICE ADJUSTMENTS	��	�	11	��
4.3��PRICE ADJUSTMENTS - WITHIN THE CURRENT YEAR	��	�	11	��
4.4��ADJUSTMENTS DUE TO TECHNICAL CHANGES	��	�	12	��
4.5��MULTI-COUNTRY PACKAGING REQUIREMENTS	��	�	13	��
4.6��API ACCOUNTABILITY REPORTS	��	�	13	��
4.7��PRACTICAL YIELD	��	�	13	��

ARTICLE 5	��	�	14	��

ORDERS, SHIPMENT, INVOICING AND PAYMENT	��	�	14	��

5.1��ORDERS AND FORECASTS	��	�	14	��
5.2��RELIANCE BY NPI	��	�	17	��
5.3��BATCHES	��	�	18	��
5.4��SHIPMENTS	��	�	18	��
5.5��STORAGE OF FINISHED PRODUCT	��	�	18	��
5.6��INVOICES AND PAYMENTS	��	�	18	��

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- i -



ARTICLE 6	��	�	19	��

PRODUCT CLAIMS AND RECALLS	��	�	19	��

6.1��DELAYED DELIVERY	��	�	19	��
6.2��PRODUCT CLAIMS	��	�	19	��
6.3��PRODUCT RECALLS AND RETURNS	��	�	20	��
6.4��NPI�S RESPONSIBILITY FOR DEFECTIVE AND RECALLED PRODUCTS	��	�	21	��
6.5��DISPOSITION OF DEFECTIVE OR RECALLED PRODUCTS	��	�	22	��
6.6��HEALTHCARE PROVIDER OR PATIENT QUESTIONS AND COMPLAINTS	��	�	22	��

ARTICLE 7	��	�	22	��

CO-OPERATION	��	�	22	��

7.1��QUARTERLY REVIEW	��	�	22	��
7.2��GOVERNMENTAL AGENCIES	��	�	22	��
7.3��RECORDS AND ACCOUNTING BY NPI	��	�	23	��
7.4��INSPECTION	��	�	23	��
7.5��ACCESS	��	�	23	��
7.6��NOTIFICATION OF REGULATORY INSPECTIONS	��	�	23	��
7.7��REPORTS	��	�	24	��
7.8��FDA FILINGS	��	�	24	��

ARTICLE 8	��	�	25	��

TERM AND TERMINATION	��	�	25	��

8.1��INITIAL TERM	��	�	25	��
8.2��TERMINATION	��	�	25	��
8.3��PRODUCT DISCONTINUATION	��	�	27	��
8.4��OBLIGATIONS ON TERMINATION	��	�	27	��

ARTICLE 9	��	�	28	��

REPRESENTATIONS, WARRANTIES AND COVENANTS	��	�	28	��

9.1��AUTHORITY	��	�	28	��
9.2��CUSTOMER WARRANTIES	��	�	29	��
9.3��NPI WARRANTIES	��	�	29	��
9.4��DEBARMENT	��	�	29	��
9.5��PERMITS	��	�	30	��
9.6��NO WARRANTY	��	�	30	��

ARTICLE 10	��	�	30	��

REMEDIES AND INDEMNITIES	��	�	30	��

10.1��CONSEQUENTIAL DAMAGES	��	�	30	��
10.2��LIMITATION OF LIABILITY	��	�	31	��
10.3��NPI INDEMNITIES	��	�	31	��
10.4��CUSTOMER INDEMNITIES	��	�	31	��
10.5��INDEMNIFICATION PROCEDURES	��	�	32	��

�

- ii -



ARTICLE 11	��	�	33	��

CONFIDENTIALITY	��	�	33	��

11.1��OBLIGATION	��	�	33	��
11.2��USE OF CONFIDENTIAL INFORMATION	��	�	33	��
11.3��OWNERSHIP OF CONFIDENTIAL INFORMATION	��	�	33	��
11.4��LEGAL DISCLOSURE	��	�	33	��
11.5��INJUNCTIVE RELIEF	��	�	34	��
11.6��TERM	��	�	34	��

ARTICLE 12	��	�	34	��

DISPUTE RESOLUTION	��	�	34	��

12.1��COMMERCIAL DISPUTES	��	�	34	��
12.2��TECHNICAL DISPUTE RESOLUTION	��	�	34	��

ARTICLE 13	��	�	35	��

INTELLECTUAL PROPERTY PROVISIONS	��	�	35	��

13.1��GRANT	��	�	35	��
13.2��OWNERSHIP	��	�	35	��
13.3��DISCLOSURE; ASSIGNMENT	��	�	35	��
13.4��PROSECUTION	��	�	36	��
13.5��NOTIFICATION OF IMPROVEMENTS	��	�	36	��
13.6��NO LICENSE	��	�	36	��

ARTICLE 14	��	�	37	��

MISCELLANEOUS	��	�	37	��

14.1��INSURANCE	��	�	37	��
14.2��INDEPENDENT CONTRACTORS	��	�	37	��
14.3��NO WAIVER	��	�	38	��
14.4��ASSIGNMENT	��	�	38	��
14.5��FORCE MAJEURE	��	�	38	��
14.6��ADDITIONAL PRODUCT	��	�	38	��
14.7��NOTICES	��	�	39	��
14.8��SEVERABILITY	��	�	39	��
14.9��ENTIRE AGREEMENT	��	�	39	��
14.10��OTHER TERMS	��	�	40	��
14.11��NO THIRD PARTY BENEFIT OR RIGHT	��	�	40	��
14.12��EXECUTION IN COUNTERPARTS	��	�	40	��
14.13��USE OF CUSTOMER NAME	��	�	40	��
14.14��GOVERNING LAW, VENUE	��	�	40	��
14.15��HEADINGS	��	�	41	��

�

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Exhibit 10.1

�

MANUFACTURING SERVICES AGREEMENT

This MANUFACTURING SERVICES AGREEMENT (the �Agreement�) is made this 17th day of January, 2014 (the �Effective Date�), by and between Keryx Biopharmaceuticals, Inc. (�CUSTOMER�), a Delaware corporation having its principal office located at 750 Lexington Avenue, 20^th Floor, New York, NY USA 10022, and Norwich Pharmaceuticals, Inc. (�NPI�; CUSTOMER and NPI are each a �Party� and are collectively the �Parties�), a Delaware corporation having its principal office at 6826 State Highway 12, Norwich, NY, USA 13815.

THIS AGREEMENT WITNESSES THAT in consideration of the rights conferred and the obligations assumed herein, and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each Party), and intending to be legally bound, the Parties agree as follows:

ARTICLE 1

INTERPRETATION

1.1. Definitions.

The following definitions will apply to this Agreement:

�

1.1.1.

�Active Pharmaceutical Ingredients� or �API� means the bulk active drug substances provided by CUSTOMER to NPI as set forth in Section�3.2;

�

1.1.2.

�Affiliate� shall mean, with respect to any Person, any individual, corporation or other business entity that, either directly or indirectly, controls such Person, is controlled by such Person, or is under common control with such Person. For purposes of this definition, �control� shall be presumed to exist if one of the following conditions is met: (a)�in the case of corporate entities, direct or indirect ownership of at least 50% of the stock or shares having the right to vote for the election of directors, and (b)�in the case of non-corporate entities, direct or indirect ownership of at least 50% of the equity interest with the power to direct the management and policies of such non-corporate entities.

�

1.1.3.

�Annual Report� means the annual report as described in Title 21 of the United States Code of Federal Regulations, Section�314.81(b)(2);

�

1.1.4.

�Annual Product Review Report� means the annual product review report as described in Title 21 of the United States Code of Federal Regulations, Section�211.180(e);

�

1.1.5.

�Applicable Laws� means in relation to any undertaking and any circumstance, all laws, regulations, standards determined by any governmental, supra-governmental

�

or regulatory authority and generally applicable industry or self-regulatory standards, codes of practice and guidelines or other applicable matters of a similar nature in force from time to time during the term of the Agreement, whether the same are regional, national or international, which apply to such undertaking or to such circumstance, including without limitation the laws of the State of New York, of the United States of America, and of competent foreign authorities as applicable, and Directive 2001/83/EC, Regulation (EC) 726/2004 and any applicable guidelines issued pursuant to such Directive and Regulation and cGMP;

�

1.1.6.

�Authority� means any governmental, supra-governmental or regulatory authority or agency that has responsibility to ensure compliance with Applicable Laws and cGMP�s, including without limitation the FDA and the EMA;

�

1.1.7.

�Batch� means the Product produced during the same cycle of manufacturing as set forth in Schedule B;

�

1.1.8.

�Business Day� means a day other than a Saturday, Sunday or a day that is a statutory holiday in the United States of America or the State of New York;

�

1.1.9.

�cGMPs� means (i)�current good manufacturing practices as described in Parts 210 and 211 of Title 21 of the United States� Code of Federal Regulations, (ii)�the then current good manufacturing practices for the manufacture of Products required by the standards, rules, principles and guidelines set out in Directive 2001/83/EC (as amended), Directive 2003/94/EC and EudraLex�Volume 4 of the Rules Governing Medicinal Products in the European Union entitled �EU Guidelines to Good Manufacturing Practice Medicinal Products for Human and Veterinary Use� and the equivalent laws for other jurisdictions within the Territory pertaining to manufacturing and quality control practice, all as updated, amended and revised from time to time, each as amended and updated from time to time;

�

1.1.10.

�Components� means, collectively, all packaging components, raw materials and ingredients (including labels, product inserts and other labeling for the Products), other than the API, required to be used in order to manufacture the Products in accordance with the Specifications;

�

1.1.11.

�Confidentiality Agreement� means the agreement about the non-disclosure of confidential information between NPI and CUSTOMER dated 7�August 2008;

�

1.1.12.

�Control,� �Controls� or �Controlled� means, when used in reference to Intellectual Property, other intangible property, or materials, that a Party owns or has a license or sublicense to such Intellectual Property, other intangible property or materials, and has the ability to grant a license or sublicense or other right to use such Intellectual Property, other intangible property or materials, as applicable, as provided for herein, without (i)�requiring the consent of a third party or (ii)�violating the terms of any agreement or other arrangement with any third party;

�

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�

1.1.13.

�CUSTOMER Intellectual Property� means (i)�any Intellectual Property that is Controlled by CUSTOMER as of the Effective Date or comes under the Control of CUSTOMER during the term of the Agreement, other than pursuant to this Agreement or (ii)�any CUSTOMER New Intellectual Property;

�

1.1.14.

�CUSTOMER New Intellectual Property� means any and all Intellectual Property, including all reports, communications, material, information, innovations, Inventions or discoveries (whether or not patentable or copyrightable) conceived, reduced to practice, made or developed by NPI solely or jointly with others in the course of performing the Manufacturing Services, to the extent it is specific to, dependent on, or useful in the development, manufacture, use or sale of CUSTOMER�s API or Products;

�

1.1.15.

�Deficiency Notice� has the meaning specified in Section�6.2;

�

1.1.16.

�EMA� means the European Medicines Agency, or any successor agency thereto;

�

1.1.17.

�FDA� means the United States Food and Drug Administration, or any successor agency thereto;

�

1.1.18.

�Firm First Year Commercial Pricing� means the actual amount charged for the Products during the first year following marketing approval for the Products, as opposed to the estimated pricing set forth in Schedule B to this Agreement;

�

1.1.19.

�Firm Orders� has the meaning specified in Section�5.1;

�

1.1.20.

�Intellectual Property� includes, without limitation, any and all intellectual property rights, under the law of any jurisdiction, including all patents, patent applications, formulae, trademarks, trademark applications, trade-names, copyrights, copyright registrations and applications for registration, Inventions, technology, industrial designs, trade secrets, know how, and all other intellectual property rights (including internet domain names), whether registered or not, including the goodwill related to the foregoing;

�

1.1.21.

�Invention� means any invention, innovation, improvement, development, discovery, computer program, device, trade secret, method, know-how, knowledge, data, documentation, experience, formulas and formulations, proprietary information, processes, test procedures, hardware, software process, technique, and other intellectual property of any kind, whether or not written or otherwise fixed in any form or medium, regardless of the media on which it is contained and whether or not patentable or copyrightable;

�

1.1.22.

�Inventory� means all inventories of Components and work-in-process produced or held by NPI for the manufacture of the Products, including the API;

�

1.1.23.

�Manufacturing Services� means the manufacturing, quality control, quality assurance and stability testing, packaging, warehousing and related services set forth in this Agreement;

�

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�

1.1.24.

�Materials� means all Components and other materials used in the manufacture of the Product, including API;

�

1.1.25.

�NPI Intellectual Property� means any Intellectual Property that (i)�is Controlled by NPI as of the Effective Date or comes under the Control of NPI during the term of the Agreement, or (ii)�is developed by NPI while performing any Manufacturing Services or otherwise generated or derived by NPI in connection with the conduct of its business that is not CUSTOMER Intellectual Property or CUSTOMER New Intellectual Property;

�

1.1.26.

�Price� means the amount payable in US Dollars to NPI for performing the Manufacturing Services and includes the cost of Components and certain cost items as set forth in Schedule B to this Agreement;

�

1.1.27.

�Product(s)� means the product(s) listed on Schedule A to this Agreement;

�

1.1.28.

�Quality Agreement� means the agreement (as set forth in Schedule E) between the Parties setting out the quality assurance standards for the Manufacturing Services to be performed by NPI for CUSTOMER;

�

1.1.29.

�Regulatory Authority� means the FDA, the EMA and any other foreign regulatory agencies competent to grant marketing approvals for pharmaceutical products including the Products in the Territory;

�

1.1.30.

�Specifications� means the file for each Product, which is to be provided by CUSTOMER to NPI in accordance with the procedures listed in Schedule A, and which shall contain information relating to each Product, including, without limitation:

�

specifications for API and Components;

�

manufacturing specifications, directions and processes;

�

storage requirements;

�

all environmental, health and safety information for each Product including material safety data sheets; and

�

the finished Product specifications, packaging specifications and shipping requirements for each Product;

all as updated, amended and revised from time to time by CUSTOMER in accordance with the terms of this Agreement.

�

1.1.31.

�Technical Dispute� has the meaning specified in Section�12.2;

�

- 4 -

�

1.1.32.

�Technical Services Agreement� or �TSA� means the Technical Services Agreement entered by the Parties having an effective date of December�9, 2009;

�

1.1.33.

�Territory� means the *, *, the territory from time to time covered by an * (at the date of this Agreement the * and *, * and *), *, *, * and *.

�

1.1.34.

�Third Party Rights� means the Intellectual Property of any third party;

�

1.1.35.

�Year� means in the first year of this Agreement the period from the Effective Date up to and including December�31 of the next calendar year, and thereafter will mean a calendar year.

1.2. Currency.

Unless otherwise indicated, all monetary amounts expressed in this Agreement are U.S. Dollars.

1.3. Schedules.

The following Schedules are attached to and are incorporated into this Agreement:

�


Schedule A	��	-	��	Product List and Specifications
Schedule B	��	-	��	Commercial Unit Price
Schedule C	��	-	��	Annual Stability Testing
Schedule D	��	-	��	Technical Dispute Resolution
Schedule E	��	-	��	Commercial Quality Agreement
Schedule�F	��	-	��	Material Lead Times for Minimum Order Quantities
Schedule�1.4	��	-	��	Customer Affiliates

1.4. Keryx and its Affiliates.

A reference to �CUSTOMER� in this Agreement shall, unless otherwise provided, include a reference to Keryx Biopharmaceuticals, Inc. and its Affiliates listed on Schedule 1.4 as may be amended and agreed to by the Parties from time to time; and Keryx Biopharmaceuticals, Inc. is entering into this Agreement on behalf of itself and such Affiliates. In particular but without limitation, this Agreement is entered into for the benefit of Keryx Biopharma UK Limited. In accordance with Section�14.11, each Affiliate of CUSTOMER listed on Schedule 1.4 shall have the right to enforce the terms of this Agreement on its own behalf.

�

*	Confidential material redacted and filed separately with the Commission.

�

- 5 -

ARTICLE 2

NPI�S MANUFACTURING SERVICES

2.1 Manufacturing Services.

NPI will perform the Manufacturing Services for the fees as specified in Schedules B and C in order to manufacture Products for CUSTOMER during the term of this Agreement. CUSTOMER may procure manufacturing services for the Products from any third party as it deems appropriate. In performing the Manufacturing Services, NPI and CUSTOMER agree that:

(a) Conversion of API and Components. NPI will convert API and Components into Products. If requested by CUSTOMER, NPI will, at CUSTOMER�s expense, audit and approve the API supplier to confirm cGMP compliance by the API supplier.

(b) Quality Control and Quality Assurance. NPI will perform the quality control and quality assurance oversight and testing as set forth in the Quality Agreement. Batch review and release to CUSTOMER will be the responsibility of NPI�s quality assurance group. NPI will perform its Batch review and release responsibilities in accordance with NPI�s standard operating procedures, this Agreement, the Technical Services Agreement and the Quality Agreement. Prior to or each time NPI ships Products to CUSTOMER, NPI will give CUSTOMER a certificate of analysis and certificate of compliance including a statement that the Products have been manufactured and tested in accordance with the Specifications, cGMPs and the Quality Agreement. CUSTOMER will have sole responsibility for the release of Products to the market. The form and style of Batch documents, including, but not limited to Batch production records, lot packaging records, equipment set up control, operating parameters, data printouts, raw material data, and laboratory notebooks are the exclusive property of NPI. Specific Product related information contained in those Batch documents is the exclusive property of CUSTOMER.

(c) Components. NPI will purchase and test all Components at NPI�s expense and will ensure that all Components conform to the Specifications, and all requirements of this Agreement, the Technical Services Agreement and the Quality Agreement.

(d) Stability Testing. NPI will conduct stability testing on the Products in accordance with the protocols set out in the Specifications for the separate fees and during the time periods specified in Schedule�C. NPI will not make any changes to these testing protocols without prior written approval from CUSTOMER. If a confirmed stability test failure occurs, NPI will notify CUSTOMER in writing within one (1)�Business Day, after which NPI and CUSTOMER will jointly determine the proceedings and methods to be undertaken to investigate the causes of the failure, including an allocation of the costs incurred as part of the investigation. NPI will give CUSTOMER all stability test data and results at CUSTOMER�s request.

(e) Packaging. NPI will package the Products in accordance with the Specifications. CUSTOMER will be responsible for the cost of artwork development. NPI will determine

�

- 6 -

and imprint the Batch numbers and expiration dates on the packaging materials for each Product shipped. The Batch numbers and expiration dates will be affixed on the Products and on the shipping carton of each Product in accordance with the Specifications, as required by cGMPs and the Quality Agreement. CUSTOMER may, in its sole discretion, make changes to labels, product inserts and other packaging for the Products. These changes will be submitted by CUSTOMER to all applicable governmental agencies and other third parties responsible for the approval of the Products. CUSTOMER will be responsible for the cost of labeling obsolescence when changes occur and as contemplated in Section�4.4. NPI�s name will not appear on the label or anywhere else on the Products unless: (i)�required by any Applicable Laws; or (ii)�NPI consents in writing to the use of its name. The approach, timing and costs related to e-pedigree, if applicable, will be mutually agreed upon by the Parties.

(f) Validation Activities. NPI will assist in the development and approval of the predicate protocols and validation reports, including design qualification protocols, validation master plans, and validation protocols for analytical methods and manufacturing procedures (including packaging procedures) for the Products for the fees set out in Schedule B.

(g) Product Rejection for Finished Product Specification Failure. Internal process specifications will be defined and mutually agreed upon by the Parties. If NPI manufactures Product in accordance with the agreed upon process specifications and a Batch or portion of Batch of Product fails to meet a finished Product Specification, the Parties will meet in good faith to discuss the root cause of the failure and allocate responsibility between the Parties for the cost of the failed Product. If the Parties are unable to reach agreement on the root cause and allocation of responsibility for the cost, the matter will be resolved as a Technical Dispute under Section�12.2.

(h) Compliance with Health, Safety and Environmental Guidelines. NPI is solely responsible for the safety and health of its employees, consultants and visitors and compliance with all Applicable Laws and regulatory acts related to health, safety and the environment, including providing its employees, consultants and visitors with all appropriate information and training concerning any potential hazards involved in the manufacture, packaging, storage and supply of Products and taking any precautionary measures to protect its employees from any such hazards.

(i) Use of Subcontractors. NPI shall not have the right to employ subcontractors to subcontract or delegate performance of any of its obligations under this Agreement without CUSTOMER�s prior written consent, which shall not be unreasonably withheld. Following CUSTOMER�s written consent, NPI will (a)�impose on such subcontractors the confidentiality, rights to intellectual property and other obligations specified in this Agreement and ensure their compliance with such obligations, (b)�supervise the performance of such subcontractors, and (c)�ensure that such subcontractors are licensed to the extent required by Applicable Laws.

(j) Non-compete. During the Term of this Agreement and continuing until the second anniversary of the date of termination or expiration of this Agreement, neither NPI nor its Affiliates shall provide manufacturing services to or manufacture, the Product, or any

�

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product having specifications that are substantially similar to the Specifications for the Product, which for clarity, must include ferric citrate as the active pharmaceutical ingredient, including without limitation, any product that is intended for use as a generic form of the Product (for clarity, with respect to the United States, this includes, without limitation, pharmaceuticals marketed under applications filed with FDA under 21 U.S.C. � 355(j) and 21 U.S.C. � 355(b)(2) that reference the Product), for any person or entity (including for NPI or any of its Affiliates) but the CUSTOMER. Notwithstanding the foregoing, this Section�2.1(j) shall be of no force or effect if this Agreement is terminated prior to the second anniversary of the Effective Date and the obligations in this Section�2.1(j) shall immediately terminate on the effective date of a termination by NPI under Section�8.2(a) as described in Section�8.4(f).

(k) Additional Items. Any additional tooling, excipients or packaging components will be the responsibility of the CUSTOMER. NPI will purchase and invoice to CUSTOMER as pass through costs (including freight) plus fifteen percent (15%)�as a handling charge.

2.2 Technical Services.

(a) Project Management. Each of CUSTOMER and NPI shall designate one (1)�individual to meet, in person or by telephone, on a regular basis as needed (but not less often than once every two (2)�weeks) to discuss NPI�s progress and activities as well as any problems that have arisen in connection with this Agreement. The Parties agree to use their commercially reasonable efforts in good faith to solve any problems that may arise as outlined in Section�12.2 (Technical Dispute Resolution). NPI acknowledges and agrees that its prompt performance of the Manufacturing Services is of critical performance to CUSTOMER and is a material inducement to CUSTOMER�s execution and performance of this Agreement.

(b) Cooperation. Both CUSTOMER and NPI will cooperate with each other in the filing of all documents with the FDA, the EMA or any other actions that may be required for the receipt of FDA, EMA or other regulatory approval for the commercialization of the Product by CUSTOMER. For the avoidance of doubt, subject to NPI�s obligations as manufacturer of the Product and its obligations under this Agreement, CUSTOMER shall remain solely responsible, at its expense, for filing any documents with FDA, the EMA, seeking approval for marketing of the Products from FDA, the EMA or any other Regulatory Authority, and maintaining any application for marketing authorization.

(c) Consequence of Completion of Services. During the term of this Agreement and on completion of the Manufacturing Services, NPI will update and confirm the Specifications for the Product to the extent required to reflect any needed changes to manufacturing and validation methods.

2.3 Presentations, Publications and Publicity.

(a) NPI shall not present or publish, nor submit for publication any work resulting from the Manufacturing Services without CUSTOMER�s prior written approval. Neither Party shall use the other Party�s name in any publicity, advertising or announcement or disclose the

�

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existence or terms of this Agreement, except that, CUSTOMER may identify NPI as the provider of the Manufacturing Services and disclose the existence or terms of this Agreement to comply with any requirements of any Authority and Applicable Laws, including but not limited to requirements of the U.S. Securities and Exchange Commission.

(b) For clarity, once NPI has reviewed and approved a disclosure, announcement or other communication, including but not limited to a disclosure required for regulatory filings, relating to this Agreement, including but not limited to the terms or existence of this Agreement (a �Disclosure�), CUSTOMER may continue to use, provide or publish the Disclosure or a disclosure that is substantially similar to the Disclosure without additional review or approval from NPI. Notwithstanding the foregoing, nothing in this Agreement shall limit the ability of CUSTOMER to provide accurate disclosures regarding the Product in connection with regulatory filings, legal disclosures and/or marketing of the Product.

2.4 Inspection of API; Risk of Loss

(a) Inspection. Subject to Section�3.2, NPI shall inspect the API received from CUSTOMER as set forth in the Quality Agreement and shall give CUSTOMER prompt written notice of any nonconformity.

(b) Risk of Loss. From the time the API is delivered to NPI�s loading dock to the time NPI returns the API to CUSTOMER or uses the API to perform the Manufacturing Services hereunder, NPI shall bear the risk of loss of the API arising from NPI�s negligence or material breach of this Agreement (including a failure to comply with the Product Warranty), and shall promptly reimburse CUSTOMER its demonstrated cost incurred for the API; provided, however, that NPI�s responsibility to reimburse CUSTOMER shall in no event exceed $* per Batch (based on $* per kilogram for API).

(c) API Storage. If NPI does not use API provided by CUSTOMER to perform the Manufacturing Services within six (6)�months of receipt, CUSTOMER will pay NPI $* per pallet, per month, one pallet minimum thereafter for storing the API.

ARTICLE 3

CUSTOMER�S OBLIGATIONS

3.1 Payment.

CUSTOMER will pay NPI fees in US Dollars for providing the Manufacturing Services and related Materials according to the Prices specified in Schedules�B and C or as

�

*	Confidential material redacted and filed separately with the Commission.

�

- 9 -

otherwise agreed to by the Parties in writing. Fees are due within forty-five (45)�days from the invoice date. These fees and Prices may be subject to adjustment under other parts of this Agreement. A failure by CUSTOMER to pay undisputed amounts hereunder shall be a material breach of this Agreement under Section�8.2, giving rise to NPI�s right to terminate this Agreement under Section�8.2(a), subject to the cure rights set forth therein.

3.2 Supply of API and Other Materials; Title; Risk of Loss.

(a) Supply. CUSTOMER, at CUSTOMER�s expense, will supply NPI with sufficient quantities of API and any other material or information as necessary or reasonably useful, as determined in CUSTOMER�s sole discretion, for NPI to provide the Manufacturing Services. CUSTOMER will deliver all such API and other material or information to NPI in a timely manner, and in any event no fewer than forty-five (45)�days prior to any scheduled production requiring use of the API. Following a notice of nonconformity under Section�2.4(a), CUSTOMER shall be responsible to replace any API that does not meet applicable Specifications.

(b) Title; Risk of Loss. CUSTOMER shall retain title to the API at all times and shall bear the risk of loss thereof except as provided in Section�2.4(b).

(c) Impurities. Any impurities needed for verification, validation, transfer and/or ongoing method execution are to be supplied by CUSTOMER.

3.3 Disposal of Unused and Waste Materials.

Subject to Section�6.5, CUSTOMER, at CUSTOMER�s expense, will be solely responsible for all costs associated with the proper destruction and/or disposal of all unused, defective, excess, or other Materials (including but not limited to CUSTOMER-owned API and unshipped finished Product), that relate to the manufacture of the Product. At CUSTOMER�s request, NPI will arrange for the proper disposal or destruction of all such Materials in accordance with Applicable Law, and will invoice CUSTOMER for the costs associated with such disposal or destruction of Materials as set forth in Section�5.6.

3.4 CUSTOMER Compliance.

CUSTOMER will comply with all Applicable Laws, cGMP requirements and the Quality Agreement, and will use reasonable care in receiving, inspecting, testing, handling and storing API and any other material or information supplied to NPI pursuant to Section�3.2, and will comply with and perform its other obligations with respect to API and such material and information as set forth herein.

3.5 NPI Compliance.

In its performance of this Agreement and the Manufacturing Services, NPI will comply with (i)�any marketing authorization for the Product in any part of the Territory, (ii)�all Applicable Laws, cGMP requirements and the Quality Agreement, and will use reasonable care in receiving, inspecting, testing, handling, manufacturing and storing API and Product, and will comply with and perform its other obligations with respect to the Manufacturing Services, API, Product and such material and information as set forth herein.

�

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ARTICLE 4

FEES AND COMPONENT COSTS

4.1 First Year Pricing.

The Prices for the Products for the first Year of this Agreement are listed in Schedule�B and are subject to adjustment after First Year Commercial Pricing is established (a)�during the course of any then-current such Year solely as set forth in Section�4.3 and (b)�after First Year Commercial Pricing is established, such prices are subject to adjustment as set forth in Sections 4.2(a), 4.2(b) and 4.3. The Prices for the Products are further subject to adjustments as set forth in Section�4.4 and 4.5 as and to the extent applicable.

4.2 Price Adjustments - Annual or Year over Year Price Adjustments.

The Prices for the Products during any Year after Firm First Year Commercial Pricing is established will be determined as follows:

(a) Manufacturing Costs. Effective at the beginning of each Year of this Agreement, the fees charged hereunder will be adjusted in accordance with increases and decreases in the United States Producer Price Index (PPI) in September of the preceding Year compared to the same month of the Year prior, unless the Parties otherwise agree in writing. For avoidance of doubt, no such adjustments shall be made to the fixed price aspects of the fees charged or for pass through costs (including the cost of Components).

(b) Component Costs. If there is a documented increase in Component costs for the manufacture of any Product for the Year, then NPI will be entitled to a proportionate Price adjustment to pass through the increase in the cost of the Components to CUSTOMER. NPI will use commercially reasonable efforts to obtain cost effective Components at all times. CUSTOMER shall have the right to audit NPI�s books and records related to such purchases on reasonable notice to NPI provided that no period may be audited more than once without good cause.

4.3 Price Adjustments � Within the Current Year.

During any Year of this Agreement, the Prices set forth in Schedule�B may be adjusted as follows:

(a) Extraordinary Changes in Component Costs. For any Component costs that are not directly passed-through for payment by CUSTOMER, if at any time market conditions result in NPI�s cost of Components being materially different than normal forecasted changes, then, at the end of each calendar quarter, NPI will invoice or credit

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CUSTOMER for the actual change in Component costs for such calendar quarter. Such changes will result in a surcharge (for increases) or a credit (for decreases) to CUSTOMER as applicable. The foregoing adjustment will apply if the cost of Components upon which the most recent fee quote was based (i)�increases or decreases by * percent (*%) or more for a single Component; or (ii)�the aggregate cost for all Components required to manufacture a Product increases or decreases by * percent (*%) or more of the total Component costs for the Product.

(b) For a Price adjustment under this Section�4.3, NPI will deliver to CUSTOMER budgetary pricing information, adjusted Component costs or other documentation reasonably sufficient to demonstrate that a Price adjustment is justified. If such supporting documentation is subject to confidentiality obligations between NPI and its suppliers, NPI will use commercially reasonable efforts to obtain necessary consent from suppliers to disclose such documentation to CUSTOMER and any adjustments will be dependent on such disclosure.

4.4 Adjustments Due to Technical Changes.

Amendments to the Specifications or the Quality Agreement will only be implemented following a technical and cost review by NPI and CUSTOMER, and are subject to CUSTOMER and NPI reaching agreement as to any applicable revisions, up or down, to the Prices specified in Schedules B or C that are necessitated by the amendment. Amendments to the Specifications, the Quality Agreement, or the manufacturing site requested by CUSTOMER will be implemented unless NPI notifies CUSTOMER that NPI cannot implement such changes due to pre-existing commitments to Third Parties, facilities or personnel limitations, Applicable Laws, government orders or regulations, or similar commitments, limitations or restrictions. Amendments to the Specifications, the Quality Agreement, or the manufacturing site requested by NPI will be implemented only following the written approval of CUSTOMER, such approval not to be unreasonably withheld. If CUSTOMER accepts a proposed Price change, such proposed change in the Specifications will be implemented, and the Price change will become effective only for those orders of Products that are manufactured under the revised Specifications. In addition, CUSTOMER agrees to purchase all Inventory (at the actual cost incurred by NPI, including all costs incurred in connection with the purchase and handling of the Inventory) utilized under the �old� Specifications and purchased or maintained by NPI in order to fill Firm Orders or in accordance with Section�5.2, if the Inventory can no longer be utilized under the revised Specifications. Open purchase orders for Components no longer required under any revised Specifications that were placed by NPI with suppliers in order to fill Firm Orders or under Section�5.2 will be cancelled where possible, and if the orders cannot be cancelled without penalty, will be assigned to and satisfied by CUSTOMER. For avoidance of doubt, the cost of any changes to the manufacturing site that are required for NPI to remain compliant with regulations that are generally applicable to manufacturers of pharmaceutical products shall not be passed through to CUSTOMER.

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*	Confidential material redacted and filed separately with the Commission.

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4.5 Multi-Country Packaging Requirements.

If CUSTOMER requests NPI to perform Manufacturing Services for the Product for countries outside the United States or the territory from time to time covered by an EU centralised marketing authorization, then CUSTOMER will inform NPI of the packaging requirements for each country, and NPI will prepare a quotation for consideration by CUSTOMER of i) any additional Component costs and change-over fees for the Product and ii) regulatory audits and filing reports for the Product on a country-by-country basis. The agreed additional packaging requirements and related packaging costs and change over fees will be set out in a written amendment to this Agreement.

4.6 API Accountability Reports.

Within fifteen (15)�days after the end of each month, NPI shall provide CUSTOMER with an SAP report showing for such month the following information: (a)�the amount of API received during such month; (b)�the amount of API lost or destroyed prior to processing; (c)�the amount of API provided to production and to quality assurance for testing and retained samples; (d)�the amount of API held in inventory at the end of such month and (e)�the amount of Product (amount of kilograms) produced during such month. If more than * percent (*%) of the amount of API received during any month is lost or destroyed or otherwise unaccounted for, NPI shall reimburse CUSTOMER for * percent (*%) of the then-current cost of the API that has been lost, destroyed, or unaccounted for, subject to Section 4.7 and the limit set forth in Section 2.4(b). If more than * percent (*%) of the amount of API received during any month is lost or destroyed or otherwise unaccounted for, NPI shall investigate the cause of such loss and shall promptly report the outcomes and remediation measures to be taken by NPI to CUSTOMER.

4.7 Practical Yield.

Within fifteen (15)�business days after the completion of production of the twentieth (20^th)�Batch of Product by NPI under this Agreement, NPI and CUSTOMER shall meet and, based on the experience of NPI during production of such first twenty (20)�Batches, NPI and CUSTOMER shall agree upon an acceptable average yield of Product (number of tablets) produced from each Batch of API used by NPI (the �Acceptable Yield�). Within fifteen (15)�business days after the end of each calendar quarter thereafter during the Term, NPI shall provide CUSTOMER with a report showing the actual yield of Product produced from each Batch of API used by NPI during such calendar quarter (the �Yield�). If the average Yield for all such Batches (the �Average Yield�) is less than the Acceptable Yield, NPI shall credit CUSTOMER with an amount equal to the product of (a)�the Price per

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*	Confidential material redacted and filed separately with the Commission.

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vial multiplied by 2 (two) multiplied by (b)�the difference between the Acceptable Yield and the Average Yield multiplied by (c)�the number of Batches accepted by CUSTOMER during such calendar quarter. At the end of each Year, NPI and CUSTOMER shall review the actual average Yield for all Batches accepted by CUSTOMER during such Contract Year. If such average Yield has been consistently greater or less than the Acceptable Yield during the course of such Year, the Acceptable Yield may be revised by mutual agreement in writing. The Acceptable Yield for the first Year shall be based on the actual yield of acceptable tablets produced during the processing of the Batches designated as the �commercial validation� lots and the next number of Batches required to bring the total number of Batches produced to twenty (20), adjusted by a mutually agreed loss factor for anticipated �typical commercial scale production losses�. In addition, the Acceptable Yield may be revised by mutual agreement in writing whenever significant changes are made to the production process. NPI shall endeavor in good faith to achieve the highest practical yield on all Batches.

ARTICLE 5

ORDERS, SHIPMENT, INVOICING AND PAYMENT

5.1 Orders and Forecasts.

(a) Minimum Requirement. Beginning the date that is two years after the Effective Date (�Initial Two Year Period�), during each consecutive 12 month period thereafter (�Contract Year�), CUSTOMER shall purchase at least * percent (*%) of Customer�s prior purchasing levels during the second full twelve month period following the Effective Date (�Minimum Requirement�). Except as set forth herein, if CUSTOMER does not purchase such Minimum Requirement during any Contract Year, within 30 days after the end of such Contract Year, CUSTOMER shall pay NPI the difference between (A)�the total amount CUSTOMER would have paid to NPI if the Minimum Requirement had been fulfilled for the Product and (B)�the sum of all purchases of Product from NPI during such Contract Year. Notwithstanding the foregoing, if, for reasons beyond the reasonable control of CUSTOMER, CUSTOMER�s ability to market and sell the Product is impaired, for example, if generic versions of the Product are approved in the Territory or CUSTOMER right to sell the Product is limited by an Authority in the Territory, the parties shall meet in good faith and mutually agree to a new Minimum Requirement.

(b) Rolling Forecasts. Concurrent with the execution of this Agreement, CUSTOMER will provide NPI with a written non-binding twelve month (�12-month�) forecast of the volume of each Product that CUSTOMER then anticipates will be required to be produced and delivered to CUSTOMER during each month of that 12-month period. The forecast will be updated by CUSTOMER monthly on or before the 20^th day of each calendar month on a rolling 12-month basis and updated forthwith upon CUSTOMER determining that the volumes contemplated in the most recent forecasts have changed by more than *% at any time during the 12-month forecast.

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*	Confidential material redacted and filed separately with the Commission.

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(c) Firm Orders for Initial Manufacturing Month. At least ninety (90)�days before the delivery date of the Product, CUSTOMER will update the rolling forecast for the first three (3)�months of manufacture of the Product (the �Initial Manufacturing Period�). The first month of this updated forecast (�Initial Manufacturing Month�) will constitute a firm written order in the form of a purchase order or otherwise (�First Firm Order�) by CUSTOMER to purchase and for NPI to manufacture the quantity of the Product. The First Firm Order shall be no less than * percent (*%) nor more than *�percent (*%) of the amount designated for such month in the most recent forecast provided by CUSTOMER prior to the Initial Manufacturing Period; provided that NPI will manufacture amounts up to * percent (*%) and will use commercially reasonable efforts to manufacture amounts in excess of * percent (*%) if so requested by CUSTOMER. For the avoidance of doubt, CUSTOMER shall provide the First Firm Order at least ninety (90)�days prior to the delivery date provided therein.

(d) Cancellation of First Firm Order. If notice of cancellation is received by NPI sixty (60)�days or more before the scheduled delivery date under the First Firm Order, CUSTOMER may cancel any Batches from the First Firm Order at no cost except that CUSTOMER will reimburse NPI for any Materials specified on the then-current version of Schedule�F (such Schedule F to be reviewed and revised on an annual basis as the parties shall agree) purchased by NPI to fulfill CUSTOMER orders as necessary to meet the scheduled delivery date of the First Firm Order. CUSTOMER may cancel any Batches from the First Firm Order if notice of cancellation is received by NPI more than thirty (30)�days but fewer than sixty (60)�days before the scheduled delivery date under the First Firm Order, provided that, promptly but within thirty (30)�days of such cancellation, CUSTOMER shall pay to NPI $* for each cancelled Batch plus the cost of Materials. If CUSTOMER cancels any Batches from a First Firm Order within thirty (30)�days of the scheduled delivery date, Customer will pay the full price of the Batch. If any cancellation occurs under this Section�5.1(d), CUSTOMER will reimburse NPI for any Materials purchased by NPI to fulfill CUSTOMER orders with long lead times necessary to meet the scheduled delivery date of the purchase order. The Parties agree that any such payment arising as a result of a cancellation under this section will be considered liquidated damages for NPI�s loss of manufacturing capacity due to the CUSTOMER�s cancellation of manufacturing and will not be considered a penalty. Other than such liquidated damages, CUSTOMER shall not be responsible for any damages incurred by NPI for a cancelled Batch.

(e) Firm Orders Thereafter. After the Initial Manufacturing Month, on a rolling basis during the term of this Agreement, and on or before the 20th day of each month, CUSTOMER will issue an updated 12-month forecast. The first three (3)�months of this updated forecast will constitute a firm written order in the form of a purchase order or otherwise (each a �Firm Order�) by CUSTOMER to purchase and for NPI to manufacture the quantity of the Product. Each Firm Order shall be no less than * percent (*%) nor more

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*	Confidential material redacted and filed separately with the Commission.

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than * percent (*%) of the amount designated for such month in the most recent forecast provided by CUSTOMER; provided that NPI will manufacture amounts up to * percent (*%) and will use commercially reasonable efforts to manufacture amounts in excess of * percent (*%) if so requested by CUSTOMER. Delivery dates for all orders will be requested by CUSTOMER in each purchase order, subject to approval by NPI; provided that CUSTOMER may delay any requested delivery for a period of up to ninety (90)�days upon at least thirty (30)�days prior written notice to NPI, subject to payment of storage fees in accordance with Section�5.5 if applicable. For the avoidance of doubt, CUSTOMER shall provide the Firm Order at least ninety (90)�days prior to the delivery date provided therein. Firm Orders submitted to NPI will specify CUSTOMER�s Manufacturing Services purchase order number, quantities by Product type, monthly delivery schedule, and any other elements necessary to ensure the timely manufacture and shipment of the Products. The quantities of Products and other terms included in each Firm Order placed in compliance with this Agreement will be firm and binding on CUSTOMER and NPI.

(f) Cancellation of Firm Orders. CUSTOMER may cancel any Batches from a Firm Order if notice of cancellation is received by NPI sixty (60)�days or more before the scheduled delivery date under the Firm Order, but CUSTOMER will pay NPI * percent (*%) of the costs for each cancelled Batch. CUSTOMER may cancel any Batches from the Firm Order if notice of cancellation is received by NPI more than thirty (30)�days but fewer than sixty (60)�days before the scheduled delivery date under the Firm Order, but CUSTOMER will pay NPI * percent (*%) of the costs for each cancelled Batch. If CUSTOMER cancels any Batches from a Firm Order within thirty (30)�days of the scheduled delivery date, CUSTOMER will pay the full price of the Batch as set forth in Schedule B. Following any cancellation under this Section�5.1(f), within thirty (30)�days following receipt of an invoice from NPI, CUSTOMER shall reimburse NPI for all of NPI�s out-of-pocket costs relating to such cancelled Batch (including those relating to manufacturing set-up and/or protocol development). If any cancellation occurs under this Section�5.1(f), CUSTOMER will reimburse NPI for any Materials specified on the then-current version of Schedule F (such Schedule F to be reviewed and revised on an annual basis as the parties shall agree) purchased by NPI to fulfill CUSTOMER orders as necessary to meet the scheduled delivery date of the purchase order. The Parties agree that this payment will be considered liquidated damages for NPI�s loss of manufacturing capacity due to CUSTOMER�s cancellation of manufacturing and will not be considered a penalty. Other than such liquidated damages, CUSTOMER shall not be responsible for any damages incurred by NPI for a cancelled Batch. If a Firm Order is changed or adjusted as described above then the rolling 12-month forecast will be adjusted as necessary.

(g) Acknowledgement of Firm Order. NPI will acknowledge Firm Orders, including the First Firm Order, by sending a written acknowledgement to CUSTOMER within ten (10)�Business Days of its receipt of the Firm Order. The acknowledgement will include, subject to confirmation from the CUSTOMER, the delivery date for the Product ordered. NPI acknowledges that time is of the essence with respect to each delivery date.

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*	Confidential material redacted and filed separately with the Commission.

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(h) Three Year Forecast. On or before the 10^th day of June of each Year, CUSTOMER will provide NPI with a written non-binding three (3)�year (�three-year�) forecast (broken down by quarters for the 2^nd and 3^rd years of the forecast) of the volume of each Product CUSTOMER then anticipates will be required to be produced and delivered to CUSTOMER during the three-year period.

5.2 Reliance by NPI.

(a) CUSTOMER understands and acknowledges that NPI will rely on the Firm Orders and rolling forecasts submitted under Section�5.1 to order the Components required to meet the Firm Orders. In addition, CUSTOMER understands that to ensure an orderly supply of the Components, NPI may want to purchase the Components specified on the then-current version of Schedule F in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods referred to in Section�5.1 or to meet the production requirements of any longer period agreed to by NPI and CUSTOMER. Accordingly, NPI may make purchases of Components specified on the then-current version of Schedule F to meet Manufacturing Services requirements as agreed to in writing by the Parties (such agreement to include the identity of the supplier, minimum shelf-life, quantities, term, return policy and pricing). If Components specified on the then-current version of Schedule F ordered by NPI under Firm Orders or this Section�5.2 are not included in finished Products manufactured for CUSTOMER within twelve (12)�months after the forecasted month for which the purchases have been made (or for a longer period as the Parties may agree), then CUSTOMER will pay to NPI its costs therefor. However, if these Components are used in Products subsequently manufactured for CUSTOMER or in third party products manufactured by NPI, CUSTOMER will receive credit for any costs of these Components specified on the then-current version of Schedule F previously paid to NPI by CUSTOMER.

(b) CUSTOMER will be liable for the costs of all Components purchased by NPI for use under this Agreement as authorized by CUSTOMER under Section�5.2(a) that are not used to perform Manufacturing Services prior to the expiry of the Component�s shelf life as agreed to by the Parties in subsection 5.2(a). Reimbursement from CUSTOMER will be due, where applicable, within forty-five (45)�days of notification from NPI that the Component has expired.

(c) If NPI does not use Components purchased to perform Manufacturing Services pursuant to subsection 5.2 (a)�above within twelve (12)�months of purchase, CUSTOMER will pay NPI $* per pallet, per month, one pallet minimum thereafter for storing the Components.

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*	Confidential material redacted and filed separately with the Commission.

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5.3 Batches.

CUSTOMER may only order Manufacturing Services based on full Batch quantities as set forth in Schedule�B.

5.4 Shipments.

Shipments of Products will be made EXW (as defined in INCOTERMS 2010) NPI�s shipping point unless otherwise mutually agreed. Risk of loss or of damage to Products will remain with NPI until NPI loads the Products onto the carrier�s vehicle for shipment at the shipping point at which time risk of loss or damage will transfer to CUSTOMER. NPI will, in accordance with CUSTOMER�s instructions and as agent for CUSTOMER, (i)�arrange for shipping to be paid by CUSTOMER and (ii)�at CUSTOMER�s risk and expense, obtain any export license or other official authorization necessary to export the Products. CUSTOMER will arrange for insurance and will select the freight carrier used by NPI to ship Products and may monitor NPI�s shipping and freight practices as they pertain to this Agreement. Products will be transported in accordance with the Specifications.

5.5 Storage of Finished Product.

(a) Subject to Section�5.2, if requested by CUSTOMER to delay shipment and arrange or provide storage of finished Product, CUSTOMER and NPI agree that title to and all risks and benefits of ownership of the Product shall transfer from NPI to CUSTOMER immediately upon delivery of the Product to a storage facility as designated by CUSTOMER or a storage location within NPI clearly allocated to CUSTOMER�S Product, at which point NPI shall be considered to have fulfilled its obligations under this Agreement.

(b) Subject to Section�5.5(a), if requested by CUSTOMER, NPI may, for a separate fee, agree to provide storage in accordance with the requirements of the Quality Agreement. NPI will inform CUSTOMER of the fee for those services in writing, and CUSTOMER shall issue a Purchase Order to NPI for those storage services. All Product placed in storage will be segregated from NPI inventory and will not be used to fill other orders.

5.6 Invoices and Payments.

NPI will send Customer invoices (by email or other electronic means) when the Product is manufactured and released by NPI to the CUSTOMER. NPI will submit to CUSTOMER a certificate of analysis with each invoice. NPI will also submit to CUSTOMER, with each shipment of Products, a duplicate copy of the invoice covering the shipment. NPI will also provide CUSTOMER an invoice covering any Inventory or Components that are to be purchased by NPI under this Agreement. Each invoice will, to the extent applicable, identify CUSTOMER�s Manufacturing Services purchase order number, Product numbers, names and quantities, unit price, freight charges and the total amount to be paid by CUSTOMER. CUSTOMER will pay all invoices within forty-five (45)�days of the date of invoice. Any invoices not paid in full within forty-five (45)�days of the date of invoice may be subject to a late charge on the outstanding balance of *% per month, provided that CUSTOMER is not disputing any such invoiced amounts.

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*	Confidential material redacted and filed separately with the Commission.

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ARTICLE 6

PRODUCT CLAIMS AND RECALLS

6.1 Delayed Delivery.

In the event that NPI becomes aware that it may not be able to deliver Products by the delivery dates included in a Firm Order, including the First Firm Order, NPI shall notify CUSTOMER promptly. NPI shall continue to deliver the Products as soon as practicable unless notified by CUSTOMER in writing to discontinue or suspend the manufacture of such Products. Such late delivery of Product and any acceptance by CUSTOMER shall not limit CUSTOMER�s rights and remedies hereunder.

6.2 Product Claims.

(a) Product Claims. CUSTOMER has the right to reject any portion or all of any shipment of Products that deviates from the Product Warranty. CUSTOMER will inspect the Products manufactured by NPI upon receipt thereof and will give NPI written notice (a �Deficiency Notice�) of all claims for Products that deviate from the Product Warranty within forty five (45)�days after CUSTOMER�s receipt thereof (or, in the case of any defects not reasonably susceptible to discovery upon receipt of the Product, within forty five (45)�days after discovery thereof by CUSTOMER, but in no event after the expiration date of the Product). Should CUSTOMER fail to give NPI the Deficiency Notice within the applicable forty five (45)�day periods set forth herein, then the delivery will be deemed to have been accepted by CUSTOMER on the 45th day after delivery or discovery, as applicable. Except as provided in Section�6.4, NPI will have no liability for any deviation for which it has not received notice within the applicable forty five (45)�day period.

(b) Determination of Deficiency. Upon receipt of a Deficiency Notice, (i)�NPI shall immediately endeavour to agree whether or not the delivery in question complies with the Product Warranty, (ii)�NPI shall be entitled at all reasonable times to inspect and/or analyze the relevant Products, and (iii)�NPI will have twenty (20)�days to advise CUSTOMER by notice in writing that it disagrees with or questions the contents of the Deficiency Notice. If CUSTOMER and NPI fail to agree within twenty (20)�days after NPI�s notice to CUSTOMER as to whether any Products identified in the Deficiency Notice deviate from the Product Warranty, then the Parties will mutually select an independent laboratory to evaluate if the Products deviate from the Product Warranty (�Independent Laboratory�). The Independent Laboratory must meet the requirements of cGMP, be of recognized standing in

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the industry, and consent to the appointment of such Independent Laboratory will not be unreasonably withheld or delayed by either Party. The decision of the Independent Laboratory regarding the Products in dispute shall, except for fraud or manifest error, be final and binding on the Parties. The Independent Laboratory will act as an expert and not as an arbitrator and (unless the Independent Laboratory otherwise determines) its fees shall be borne by the Party against whom the Independent Laboratory�s decision is given. This evaluation will be binding on the Parties, and if the evaluation certifies that any Products deviate from the Product Warranty, CUSTOMER may reject those Products. If the evaluation does not certify that any Product(s) deviate from the Product Warranty, then CUSTOMER will be deemed to have accepted delivery of the Products on the 65th day after delivery (or, in the case of any deviations not reasonably susceptible to discovery upon receipt of the Products, on the 65th day after discovery thereof by CUSTOMER, but in no event after the expiration date of the Product).

(c) Shortages. Claims for shortages in the amount of Products shipped by NPI will be dealt with as may reasonably be agreed to by the Parties; provided that, for avoidance of doubt, any material shortage shall be a material breach of this Agreement under Section�8.2, giving rise to CUSTOMER�s right to terminate this Agreement under Section�8.2(a), subject to the cure rights set forth therein, unless such shortage is due to CUSTOMER�s failure to supply NPI with API.

6.3 Product Recalls and Returns.

(a) Records and Notice. NPI and CUSTOMER will each maintain records necessary to permit a Recall of any Products delivered to CUSTOMER or customers of CUSTOMER. Each Party will promptly notify the other by telephone (to be confirmed in writing) of any information that might affect the marketability, safety or effectiveness of the Products and/or that might result in the Recall or seizure of the Products. Upon receiving this notice or upon this discovery, each Party will cease and desist from further manufacturing and/or shipments of any Products in its possession or control until a decision has been made whether a Recall or some other corrective action is necessary. The decision to initiate a Recall or to take some other corrective action, if any, will be made and implemented by CUSTOMER. �Recall� will mean any action (i)�by CUSTOMER to recover title to or possession of quantities of the Products sold or shipped to third parties (including, without limitation, the voluntary withdrawal of Products from the market); or (ii)�by any regulatory authorities to detain or destroy any of the Products. Recall will also include any action by either Party to refrain from manufacturing, selling or shipping quantities of the Products to third parties which would have been subject to a Recall if sold or shipped.

(b) Recalls. If (i)�any governmental or regulatory authority issues a directive, order or, following the issuance of a safety warning or alert about a Product, a written request that any Product be Recalled, (ii)�a court of competent jurisdiction orders a Recall, or (iii)�CUSTOMER determines that any Product should be Recalled or that a �Dear Doctor� letter is required relating the restrictions on the use of any Product, NPI will co-operate as reasonably required by CUSTOMER, in accordance with all Applicable Laws and regulations.

(c) Product Returns. CUSTOMER will have the responsibility for handling CUSTOMER returns of the Products. NPI will give CUSTOMER any assistance that CUSTOMER may reasonably require to handle such returns.

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6.4 NPI�s Responsibility for Defective and Recalled Products.

(a) Defective Product. If CUSTOMER rejects Products under Section�6.2 and NPI or the Independent Laboratory pursuant to subsection 6.2(b) determines that the Products manufactured and released by NPI deviate from the Product Warranty, NPI will credit CUSTOMER�s account for NPI�s invoice price for the defective Products and, subject to Section�2.4(b), refund to CUSTOMER the cost of the API used in connection with the defective Products. If CUSTOMER previously paid for Products that deviate from the Product Warranty, NPI will promptly, at CUSTOMER�s election, either: (i)�refund the invoice price and, subject to Section�2.4(b), refund to CUSTOMER the cost of the API used in connection with the defective Products; (ii)�offset the amounts described in clause (i)�against other amounts due to NPI hereunder; or (iii)�replace the Products, as soon as practicable with Products conforming with the Product Warranty without CUSTOMER being liable for payment therefor under Section�3.1, and, subject to Section�2.4(b), refund to CUSTOMER the cost of the API used in connection with the defective Products.

(b) Recalled Product. If a Recall or return results from, or arises out of, a failure by NPI to provide Products that conform to the Product Warranty, in addition to the amounts described under Section�6.4(a), NPI will also be responsible for the documented out-of-pocket expenses of the Recall or return. In all other circumstances, Recalls, returns or other corrective actions will be made at CUSTOMER�s cost and expense.

(c) Replacement Product. If CUSTOMER rejects Products under Section�6.2 and NPI or the Independent Laboratory pursuant to subsection 6.2(b) determines that the Products manufactured and released by NPI deviate from the Product Warranty, NPI will, if requested by CUSTOMER, use commercially reasonable efforts to manufacture and supply to CUSTOMER as soon as reasonably possible similar quantities of Product produced hereunder in accordance and conformity with the Product Warranty.

(d) Limitation. Except as expressly provided in this Agreement, NPI will have no obligation for any claims related to Product produced hereunder in accordance and conformity with the Product Warranty that (i)�is caused by deficiencies in the Specifications, the safety, efficacy or marketability of the Products or any distribution thereof, (ii)�results from a defect in a Component that is not reasonably discoverable by NPI using the test methods set forth in the Specifications, (iii)�is caused by actions of third parties occurring after the Product is shipped by NPI under Section�5.4, (iv)�is due to packaging design or labeling defects or omissions for which NPI has no responsibility, or (v)�is due to any unascertainable reason despite NPI having supplied Products that conform to the Product Warranty.

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6.5 Disposition of Defective or Recalled Products.

CUSTOMER will not dispose of any damaged, defective, returned or Recalled Products for which it intends to assert a claim against NPI without NPI�s prior written authorization to do so, and NPI reserves the right to instruct CUSTOMER to return any such Products to NPI. NPI will bear the cost of shipping or disposition for any damaged, defective, returned or Recalled Products for which it bears responsibility due to a failure of the Products to conform to the Product Warranty. In all other circumstances, CUSTOMER will bear the cost of disposition for any damaged, defective, returned or Recalled Products.

6.6 Healthcare Provider or Patient Questions and Complaints.

CUSTOMER will have the sole responsibility for responding to questions and complaints from its customers. Questions or complaints received by NPI from CUSTOMER�s customers, healthcare providers or patients will be promptly referred to CUSTOMER. NPI will co-operate as reasonably required to allow CUSTOMER to determine the cause of and resolve any questions and complaints. This assistance will include follow-up investigations, including testing. In addition, NPI will give CUSTOMER all mutually agreed upon information that will enable CUSTOMER to respond properly to questions or complaints about the Products as set forth in the Quality Agreement. Unless it is determined that the cause of any of the complaints resulted from a failure by NPI to supply Products that conform to the Product Warranty, all costs incurred under this Section�6.6 will be borne by CUSTOMER.

ARTICLE 7

CO-OPERATION

7.1 Quarterly Review.

Upon execution of this Agreement each Party will appoint one of its employees to be a relationship manager responsible for serving as a liaison between the Parties. The relationship managers will meet not less than quarterly to review the current status of the business relationship and manage any issues that have arisen. The quarterly review will address key performance indicators, inventory on hand, and other operational and financial topics. In addition, technical representatives of each Party shall meet two times per year to discuss process improvements and other technical matters relating the Manufacture of the Product.

7.2 Governmental Agencies.

Subject to Section�7.8, each Party may communicate with any Authority, including but not limited to Authorities responsible for granting regulatory approval for the Products, regarding the Products if, in the opinion of that Party�s counsel, such communication is necessary to comply with the terms of this Agreement or the requirements of any Applicable Laws, governmental order or regulation. Unless in the reasonable opinion of its counsel there is

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a legal prohibition against doing so, a Party will provide notice to the other Party and permit the other Party to accompany and take part in any communications with any Authority, and to receive copies of all communications from each Authority, relating to the performance of Manufacturing Services.

7.3 Records and Accounting by NPI.

NPI will keep records of the manufacture, testing and shipping of the Products, and retain samples of the Products as are necessary to comply with Applicable Laws and manufacturing regulatory requirements applicable to NPI, as well as to assist with resolving Product complaints and other similar investigations. Copies of such records and samples will be retained for a period of one (1)�year following the date of Product expiry, or longer if required by Applicable Laws or regulations, at which time CUSTOMER will be contacted concerning the delivery and destruction of the documents and/or samples of Products. CUSTOMER is responsible for retaining samples of the Products necessary to comply with the legal/regulatory requirements applicable to CUSTOMER.

7.4 Inspection.

CUSTOMER or its designated representative(s) may inspect NPI reports and records relating to this Agreement during normal business hours and with reasonable advance notice, but a NPI representative must be present during this inspection.

7.5 Access.

NPI will give CUSTOMER or its designated representative(s) reasonable access at mutually agreeable times to the areas of the manufacturing site in which the Products are manufactured, stored, handled or shipped to permit CUSTOMER to verify that the Manufacturing Services are being performed in accordance with the Specifications, cGMPs and Applicable Laws. With the exception of �for-cause� audits, CUSTOMER will be limited to one cGMP-type audit, at no charge, lasting no more than two (2)�days, and involving no more than two (2)�auditors. CUSTOMER may request additional cGMP-type audits, additional audit days, or the participation of additional auditors subject to payment to NPI of a fee of $* for each additional audit day and $* per audit day for each additional auditor. The right of access set forth in this Section�7.5 will not include a right to access or inspect NPI�s financial records.

7.6 Notification of Regulatory Inspections.

NPI will notify CUSTOMER as soon as possible but no less than within one (1)�Business Day of receipt of notice of any inspections by any Authority involving the Products or the facility in which the Manufacturing Services are performed or that could otherwise reasonably be expected to impact NPI�s ability to perform hereunder. NPI will also notify CUSTOMER of receipt of any FDA Form 483s, warning letters, or any other significant

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*	Confidential material redacted and filed separately with the Commission.

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regulatory action or communication from an Authority that relate to the Products or the facility in which the Manufacturing Services are performed or that could otherwise reasonably be expected to impact NPI�s ability to perform hereunder, and provide CUSTOMER with a copy of such FDA Form 483s, warning letters, or any other documents relating to significant regulatory action or communication from an Authority.

7.7 Reports.

NPI will supply on an annual basis an Annual Product Review Report that includes all Product data in its control, including release test results, statistical process control data and charts, statistical quality control data and charts, complaint test results, and all investigations (in manufacturing, testing and storage), that CUSTOMER reasonably requires in order to complete any filing under any applicable regulatory regime, including any Annual Report that CUSTOMER is required to file with an Authority. Any additional report(s) requested by CUSTOMER beyond the scope of cGMPs and customary FDA or EMA requirements will be subject to an additional fee to be agreed upon between NPI and CUSTOMER. NPI will work in good faith to integrate CUSTOMER�s enterprise resource planning platform where possible with NPI�s enterprise resource planning platform. If additional costs are required with such integration, CUSTOMER shall be so notified in advance and shall be responsible for such costs if CUSTOMER opts for such integration to proceed.

7.8 FDA Filings.

(a) Regulatory Authority. Subject to NPI�s obligations as manufacturer of the Product and its obligations under this Agreement, CUSTOMER will have the sole responsibility for filing all documents with all Regulatory Authorities and taking any other actions that may be required for the receipt and/or maintenance of Regulatory Authority approval for the commercial manufacture of the Products. NPI will assist CUSTOMER, to the extent consistent with NPI�s obligations under this Agreement, to obtain Regulatory Authority approval for the commercial manufacture of all Products as quickly as reasonably possible.

(b) Verification of Data. At least thirty (30)�days prior to filing any documents with any Regulatory Authority that incorporate data generated by NPI, CUSTOMER will give NPI a copy of the documents incorporating this data to give NPI the opportunity to verify the accuracy of these documents as they relate to NPI generated data.

(c) Verification of CMC. At least thirty (30)�days prior to filing with any Regulatory Authority any documentation which is or is equivalent or has a similar purpose to the FDA�s Chemistry, Manufacturing, and Controls (�CMC�) related to any marketing authorization, such as a New Drug Application or Abbreviated New Drug Application, CUSTOMER will give NPI a copy of the relevant CMC sections where NPI-generated data is used as well as all supporting documents that have been relied upon to prepare the CMC. This disclosure will permit NPI to verify that the CMC accurately describes the work that NPI has performed and the manufacturing processes that NPI will perform under this Agreement. CUSTOMER will give NPI copies of all relevant pages of FDA filings at the time of submission that contain CMC information regarding the Product, as requested.

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(d) Deficiencies. If NPI determines that any of the information given by CUSTOMER under paragraphs (b)�and (c)�above is inaccurate or deficient in any manner whatsoever (the �Deficiencies�), NPI will notify CUSTOMER in writing of such Deficiencies within one (1)�Business Day of identifying the deficiency.

(e) CUSTOMER Responsibility. Subject to NPI�s obligations as manufacturer of the Product and its obligations under this Agreement, the Parties agree that in reviewing the documents referred to in paragraph (b)�above, NPI�s role will be limited to verifying the accuracy of the data generated by NPI. Subject to the foregoing, NPI will not assume any responsibility for the accuracy of any application for receipt of an approval by a Regulatory Authority. Subject to NPI�s obligations as manufacturer of the Product and its obligations under this Agreement, CUSTOMER is solely responsibility for the preparation and filing of the application for approval by the regulatory authorities and any relevant costs will be borne by CUSTOMER.

(f) Inspection by Regulatory Authorities. If CUSTOMER does not give NPI the documents requested under this Section�7.8 within the time specified and if NPI reasonably believes that NPI�s standing with a Regulatory Authority may be jeopardized as a result of such failure, NPI may, in its sole discretion, delay or postpone any inspection by the Regulatory Authority until NPI has reviewed the requested documents and is satisfied with their contents. Subject to the foregoing sentence, NPI will promptly and fully cooperate with any all inspections and instructions received from or carried out by any Authority.

ARTICLE 8

TERM AND TERMINATION

8.1 Initial Term.

This Agreement will become effective as of the Effective Date and will continue for five (5)�years (the �Initial Term�) unless terminated earlier by one of the Parties in accordance herewithin. This agreement will automatically continue after the Initial Term for successive terms of two (2)�years each unless either Party gives written notice to the other Party of its intention to terminate this Agreement at least twelve (12)�months prior to the end of the then current Term.

8.2 Termination.

(a) Either Party at its sole option may terminate this Agreement as set forth in this Section�8.2(a) upon written notice where the other Party has failed to remedy a material breach of any of its representations, warranties or other obligations under this Agreement within sixty (60)�days following receipt of a written notice (the �Remediation Period�) of the breach that expressly states that it is a notice under this Section�8.2(a) (a �Breach Notice�). In the event the material

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breach that is the subject of a Breach Notice is not cured within the initial sixty (60)�day Remediation Period, the non-breaching Party may, in its sole discretion, agree to extend the Remediation Period based on a schedule and proposed actions are reasonably likely to allow for cure in a sufficient and timely manner. Notwithstanding the foregoing, after the first twenty (20)�Batches of Product have been release to CUSTOMER, CUSTOMER may terminate this Agreement on thirty (30)�days notice in the event that NPI releases to CUSTOMER, within a twelve (12)�month period, three or more Batches of Product which deviate from the Specifications, cGMPs or Applicable Law.

(b) Either Party at its sole option may immediately terminate this Agreement upon written notice, but without prior advance notice, to the other Party if: (i)�the other Party is declared insolvent or bankrupt by a court of competent jurisdiction; (ii)�a voluntary petition of bankruptcy is filed in any court of competent jurisdiction by the other Party; or (iii)�this Agreement is assigned by the other Party for the benefit of creditors.

(c) This Agreement may be terminated by CUSTOMER: (a)�at any time upon twelve (12)�months prior written notice; (b)�immediately by written notice to NPI if NPI or any of its agents or employees performing under this Agreement becomes a Debarred Entity or Individual, as set forth in Section�9.4; or (c)�upon thirty (30)�days prior written notice to NPI in the event that: (i)�CUSTOMER, in its sole discretion, determines that the Product shall not be marketed or shall be withdrawn from the market; or (ii)�any Authority withdraws approval of or fails to approve the manufacturing or marketing of the Product or CUSTOMER reasonably believes that any Authority will take (or, as context requires, fail to take) any such action; or (iii)�any Authority takes any action, or raises any objection, that prevents CUSTOMER from importing, exporting, purchasing or selling the Product, including but not limited to any final regulatory or clinical determination that a Product will not receive marketing approval. However, in such event CUSTOMER will remain liable for and will make any payments due to NPI under clause 4.2(b) above in addition to any other obligations CUSTOMER may have in the event of termination under Section�8.4 below.

(d) NPI may terminate this Agreement (a)�upon twenty four (24)�months prior written notice, at any time after the third (3rd)�anniversary of the Effective Date, (b)�upon thirty (30)�days prior written notice to CUSTOMER in the event that CUSTOMER, in its sole discretion, determines that the Product shall not be marketed or shall be withdrawn from the market and has provided written notification directly to NPI of the same in accordance with Section�8.3; or (c)�upon twelve (12)�months� prior written notice if CUSTOMER assigns under Section�14.4 any of its rights under this Agreement to an assignee that is, as its principal business activity, a contract manufacturer of pharmaceutical product, or is an entity against whom NPI has or had a lawsuit or other material dispute.

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8.3 Product Discontinuation.

For any Product that has received marketing approval, CUSTOMER will provide NPI with at least six (6)�months written advance notice if CUSTOMER intends not to order Manufacturing Services for a Product due to CUSTOMER�s voluntary decision to discontinue such Product in the market.

8.4 Obligations on Termination.

If this Agreement is completed, expires or is terminated in whole or in part for any reason other than by CUSTOMER under Section�8.2(a), then (in addition to any other rights and remedies a non-defaulting Party may have against a defaulting Party):

(a) CUSTOMER will take delivery of and pay for all undelivered Products that are manufactured and/or packaged under a Firm Order at the time of notice of termination, at the Price in effect at the time the Firm Order was placed;

(b) CUSTOMER will purchase, at NPI�s cost (including all costs incurred by NPI for the purchase and handling of the Inventory), Components purchased, or subject to non-cancellable order, by NPI to fill Firm Orders or in accordance with Section�5.2 prior to notice of termination being given; provided that NPI will make commercially reasonable efforts to cancel any pending orders for such Components or to return or sell items in the Inventory back to its supplier(s) if possible;

(c) Except in the event of a termination by CUSTOMER under Section�8.2(a), CUSTOMER will satisfy the purchase price payable under NPI�s orders with suppliers of Components, if the orders were made by NPI in reliance on Firm Orders or in accordance with Section�5.2;

(d) CUSTOMER will make commercially reasonable efforts, at its own expense, to remove from NPI site(s), within twenty (20)�Business Days, all of CUSTOMER�s Components and Materials (whether current or obsolete), supplies, chattels, equipment or other moveable property owned by CUSTOMER, related to the Agreement and located at a NPI site or that is otherwise under NPI�s care and control, excluding any Product that remains to be delivered to CUSTOMER under this Agreement (�CUSTOMER Property�). If CUSTOMER fails to remove the CUSTOMER Property within twenty (20)�Business Days following the completion, termination or expiration of this Agreement, CUSTOMER will pay NPI $* per pallet, per month, one pallet minimum thereafter for storing the CUSTOMER Property and will assume any third party storage charges invoiced to NPI regarding the CUSTOMER Property. Further, NPI shall have the right to dispose, at CUSTOMER�s expense, any CUSTOMER Property that remains at a NPI site more than six (6)�months after termination of this Agreement, with prior written notice to CUSTOMER. NPI will invoice CUSTOMER for the storage and/or disposal charges according to the provisions of Section�5.6 of this Agreement.

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*	Confidential material redacted and filed separately with the Commission.

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(e) Upon the request of CUSTOMER, and at CUSTOMER�s expense, NPI will reasonably assist CUSTOMER in transferring the manufacture of the Products to a third party manufacturing facility. However, no competitor of NPI in the business of contract development or manufacture of drug products will be permitted to have access to NPI�s manufacturing site. The third party manufacturer will be required to sign a customary and appropriate confidentiality agreement with NPI concerning the nondisclosure of NPI confidential information that may be involved in the transfer.

(f) In the case of termination by NPI under Section�8.2(a) for CUSTOMER�s uncured material breach of this Agreement, the non-compete in Section�2.1(j) shall also terminate upon such termination of this Agreement.

(g) Except to the extent necessary to complete performance pursuant to subsection (d)�or to exercise rights that survive the termination of this Agreement, each Party as a receiving Party shall deliver to the disclosing Party such disclosing Party�s Confidential Information in the receiving Party�s possession or control.

(h) Promptly following any notice of termination or any expiration, NPI will update and confirm the technical information and specifications for the Product as set forth in the Specifications (Schedule A), Stability Testing protocols and procedures (Schedule C) and the Quality Agreement (Schedule E) as applicable, to the extent required to reflect any needed changes to manufacturing and validation methods.

(i) Each Party will continue to comply with their obligations under Applicable Law which survive termination of this Agreement.

Any termination or expiration of this Agreement will not affect any outstanding obligations or payments due hereunder prior to the termination or expiration, nor will it prejudice any other remedies that the Parties may have under this Agreement. For greater certainty, termination of this Agreement for any reason will not affect the obligations and responsibilities of the Parties under Articles 1, 10, 11 and 12 and Sections 2.1(g), 2.1(j)(subject to limitation in Section�8.4(f)), 2.3, 2.4(b), 2.4(c), 5.4, 5.5, 6.3, 6.4, 7.3, 8.4, 13.1(b), 13.2, 13.3, 13.5, 14.1, 14.7, 14.13 and 14.14, all of which survive any termination.

ARTICLE 9

REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1 Authority.

Each Party covenants, represents and warrants that it is, and shall remain, a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, it has the full right and authority to enter into this Agreement, and it is not aware of any impediment that would inhibit its ability to perform its obligations hereunder.

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9.2 CUSTOMER Warranties.

CUSTOMER covenants, represents and warrants that:

(a) To the best of CUSTOMER�s knowledge, the use of the CUSTOMER Intellectual Property by NPI in performing the Manufacturing Services does not infringe any Third Party Rights;

(b) To the best of CUSTOMER�s knowledge, the Products, if labeled and manufactured in accordance with the Specifications and in compliance with cGMPs and Applicable Laws, (i)�may be lawfully used in every jurisdiction where CUSTOMER conducts clinical studies or markets the Products, respectively, and (ii)�will be safe for human consumption.

9.3 NPI Warranties.

NPI covenants, represents and warrants that:

(a) It will perform the Manufacturing Services in accordance with the Specifications, cGMPs, each marketing authorization for the Product, Applicable Laws, the Quality Agreement and this Agreement;

(b) The Product shall be in conformity with cGMP, each marketing authorization for the Product, Applicable Law, the Specifications and the Quality Agreement (the requirements of Section�9.3(a) and 9.3(b) are the �Product Warranty�); and

(c) Knowing that the Product may be marketed and sold throughout the Territory, it is appropriately qualified to carry out the Manufacturing Services set out herein and has the necessary permits, consents, licences and authorizations under Applicable Law.

9.4 Debarment.

NPI represents and warrants that neither it, nor any of its employees or agents performing Manufacturing Services hereunder, have ever been, are currently, or are the subject of a proceeding that could lead to it or such employees or agents becoming, as applicable, a Debarred Entity or Individual (as defined below). NPI further covenants, represents and warrants that if, during the term of this Agreement, it, or any of its employees or agents performing hereunder, become or are the subject of a proceeding that could lead to that Party becoming, as applicable, a Debarred Entity or Individual, NPI shall immediately notify CUSTOMER, and CUSTOMER shall have the right to immediately terminate this Agreement by written notice to NPI as set forth in Section�8.2(c). For purposes of this section, the following definitions apply: (i)�a �Debarred Individual� is an individual who has been debarred by the FDA pursuant to 21 USC �335a (a)�or (b)�from providing services in any capacity to a person that has an approved or pending drug product application and (ii)�a �Debarred Entity� is a corporation, partnership or association that has been debarred by the FDA pursuant to 21 USC �335a (a)�or (b)�from submitting or assisting in the submission of any abbreviated drug application, or a subsidiary or affiliate of a Debarred Entity.

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9.5 Permits.

(a) CUSTOMER will be solely responsible for obtaining or maintaining, on a timely basis, any permits or other regulatory approvals for the Products or the Specifications, including, without limitation, all marketing and post-marketing approvals.

(b) NPI will maintain at all relevant times all governmental permits, licenses, approval, and authorities to the extent required to enable it to lawfully and properly perform the Manufacturing Services. NPI shall operate and maintain its manufacturing facilities in compliance in accordance with cGMPs and Applicable Laws, and will assure the capacity of its manufacturing facilities is sufficient to meet the requirements of this Agreement.

9.6 No Warranty.

EACH PARTY HERETO MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO (I)�MERCHANTABILITY, NON-INFRINGEMENT, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (II)�THE LIKELIHOOD OF SUCCESS OF ANY APPLICATION FOR MARKETING AUTHORIZATION RELATING TO ANY PRODUCTS CURRENTLY IN DEVELOPMENT OR FOR WHICH MARKETING AUTHORIZATION HAS NOT YET BEEN GRANTED EITHER IN THE U.S. OR IN ANY OTHER COUNTRY, OR (III)�THE PROBABLE SUCCESS OR PROFITABILITY OF ANY PRODUCTS AFTER THE EFFECTIVE DATE.

ARTICLE 10

REMEDIES AND INDEMNITIES

10.1 Consequential Damages.

(a) Except for claims by third parties under Section�10.3, NPI shall in no event be liable to the CUSTOMER in contract, tort, negligence, breach of statutory duty or otherwise for (i)�any (direct or indirect) loss of profits, of production, of anticipated savings, of business or goodwill or (ii)�for any other liability, damage, costs or expense of any kind incurred by the other Party of an incidental or consequential nature, regardless of any notice of the possibility of such damages.

(b) Except for claims by third parties under Section�10.4, CUSTOMER shall in no event be liable to NPI in contract, tort, negligence, breach of statutory duty or otherwise for (i)�any (direct or indirect) loss of profits, of production, of anticipated savings, of business or goodwill or (ii)�for any other liability, damage, costs or expense of any kind incurred by the other Party of an incidental or consequential nature, regardless of any notice of the possibility of such damages.

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10.2 Limitation of Liability.

Except for claims under Section�2.4(b) and claims arising out of the intentional misconduct or gross negligence of NPI or its employees, NPI�s maximum liability to CUSTOMER under this Agreement for any reason whatsoever, including, without limitation, any liability arising from or relating to a breach of its representations, warranties, or other obligations under this Agreement will not exceed * percent (*%) of the total amount paid by CUSTOMER to NPI for the * months immediately preceding the date such liability is incurred.

10.3 NPI Indemnities.

At all times during the term of this Agreement and thereafter, NPI agrees to defend, indemnify and hold CUSTOMER, its Affiliates, officers, directors, employees and agents harmless against any and all losses, damages, costs, claims, demands, judgments and liability to, from and in favor of third parties resulting from, or relating to (1)�any claim of personal injury or property damage to the extent that the injury or damage is the result of negligence or willful misconduct of NPI or its Affiliates, agents, officers, subcontractors or employees, (2)�any act or omission that results in a material breach of this Agreement by NPI, including, without limitation, any representation or warranty contained herein, (3)�failure to meet Applicable Law or cGMPs, or (4)�failure to follow the written directions of any Authority, except to the extent that the losses, damages, costs, claims, demands, judgments and liability are due to the negligence or wrongful act(s) of CUSTOMER, its officers, directors, employees, agents or Affiliates, or as may be covered under Section�10.4.

10.4 CUSTOMER Indemnities.

At all times during the term of this Agreement and thereafter, CUSTOMER agrees to defend, indemnify and hold NPI, its officers, directors, employees, agents and Affiliates harmless against any and all losses, damages, costs, claims, demands, judgments and liability to, from and in favor of third parties resulting from, or relating to (1)�any claim of infringement or alleged infringement of any Third Party Rights in the Products, or any portion thereof, (2)�any claim of personal injury or property damage resulting from or relating to the marketing, sale, consumption, or use of the Products and (3)�any act or omission that results in a material breach of this Agreement by CUSTOMER, including, without limitation, any representation or warranty contained herein, except to the extent that the losses, damages, costs, claims, demands, judgments and liability are due to the negligence or willful misconduct of NPI, its officers, directors, Affiliates, employees or agents, or as may be covered under Section�10.3.

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*	Confidential material redacted and filed separately with the Commission.

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10.5 Indemnification Procedures.

With respect to any indemnification obligation under this Agreement, the following conditions shall be applicable:

(a) The Party to be indemnified (the �Indemnified Party�) shall notify the indemnifying Party (the �Indemnifying Party�) promptly in writing, and in reasonable detail, of any claim (any such claim, a �Third Party Claim�) which may give rise to an obligation on the part of the Indemnifying Party hereunder, except that any failure to give any such notification shall only affect the Indemnifying Party�s obligation to indemnify the Indemnified Party if the Indemnifying Party has been prejudiced as a result of that failure; and

(b) the Indemnifying Party shall have the right to defend such Third Party Claim, at such Indemnifying Party�s expense and with counsel of its choice reasonably satisfactory to the Indemnified Party; provided, that, the Indemnifying Party conducts the defense of such Third Party Claim actively and diligently. If the Indemnifying Party assumes the defense of such Third Party Claim, the Indemnified Party agrees to reasonably cooperate in such defense at the expense of the Indemnifying Party. So long as the Indemnifying Party is conducting the defense of such claim actively and diligently, the Indemnified Party may retain separate co-counsel at its sole cost and expense and may participate in the defense of such Third Party Claim, and neither any Indemnifying Party nor any Indemnified Party will consent to the entry of any Judgment or enter into any settlement with respect to such Third Party Claim without the prior written consent of the other, which consent will not be unreasonably withheld. In the event the Indemnifying Party does not or ceases to conduct the defense of such Third Party Claim actively and diligently, (a)�the Indemnified Party may defend against, and, with the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld), consent to the entry of any Judgment or enter into any settlement with respect to, such Third Party Claim (provided, that, the Indemnifying Party may retain separate co-counsel at its sole cost and expense and may participate in the defense of such Third Party Claim), (b)�the Indemnifying Party will reimburse the Indemnified Party for the costs of defending against such Third Party Claim to the extent provided in Article�10 and (c)�the Indemnifying Party will remain responsible for any indemnifiable Losses the Indemnified Party may suffer as a result of such Third Party Claim to the extent provided in Article�10; and

(c) any indemnification hereunder shall be made net of any insurance proceeds recovered by the Indemnified Party; provided, that, if, following the payment to the Indemnified Party of any amount under Article�10, such Indemnified Party recovers any insurance proceeds in respect of the claim for which such indemnification payment was made, such Indemnified Party shall promptly pay an amount equal to the amount of such insurance proceeds (but not exceeding the amount of such indemnification payment from the Indemnifying Party) to the Indemnifying Party.

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ARTICLE 11

CONFIDENTIALITY

11.1 Obligation. Each Party agrees to hold in confidence and not disclose to any third party (including its agents or Affiliates) or use for its own benefit, except as permitted under this Agreement, any of the following information which is disclosed to it by the other Party (�Confidential Information�): (a)�any information provided to one Party by the other Party or its employees, agents, customers, suppliers or subcontractors that is marked with a proprietary, confidential or other similar notice or orally disclosed to one Party by the other Party and followed by written notice within thirty days of such oral disclosure indicating said information was confidential; and (b)�if not so marked, information that is reasonably understood by one Party to be the confidential information of the disclosing Party. For purposes of this Article 11, without limiting the rights of CUSTOMER hereunder, the Specifications and Quality Agreement and any information relating to CUSTOMER�s customers, products, business and finances shall be deemed to be Confidential Information of CUSTOMER. The term Confidential Information shall not include any item of information which: (i)�the receiving Party can prove was in its possession prior to disclosure thereof by the disclosing Party without requirements of confidential treatment; (ii)�is or becomes generally available to the public other than as a result of any action by the receiving Party; (iii)�is rightfully disclosed to the receiving Party by a third party without the imposition on the receiving Party of any confidentiality obligation or restrictions on use; or (iv)�the disclosing Party states in writing should not be considered to be confidential.

11.2 Use of Confidential Information. Each Party shall, except as otherwise set forth herein, (a)�hold all Confidential Information of the other Party in confidence and not disclose such Confidential Information to anyone except its employees, agents, subcontractors or suppliers who have a need to know and who are at all times informed of, and understand that they are bound to observe, the same confidentiality and nondisclosure restrictions and obligations as are set forth in this Agreement; (b)�protect the confidentiality of and take all steps necessary to prevent disclosure or unauthorized use of the other Party�s Confidential Information to prevent it from falling into the public domain or the possession of persons not legally bound to maintain its confidentiality; and (c)�advise the disclosing Party in writing if it becomes aware of any misappropriation or misuse of the disclosing Party�s Confidential Information by any person, and provide reasonable assistance to the disclosing Party in any proceeding or lawsuit related thereto.

11.3 Ownership of Confidential Information. Each Party shall be deemed the owner of all right, title and interest, including all Intellectual Property rights, in and to their own Confidential Information.

11.4 Legal Disclosure. This Agreement will not prevent the receiving Party from disclosing Confidential Information of the disclosing Party to the extent it is required to be revealed pursuant to law or by obligations pursuant to any listing agreement with or rules of any national securities exchange, provided, however, the receiving Party which is under any such requirement of law shall give reasonable notice to the disclosing Party of such requirement and shall cooperate with the disclosing Party (at the cost and expense of the disclosing Party) in reasonable legal efforts to limit or mitigate any such disclosure so as to preserve the proprietary nature of any Confidential Information contained therein.

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11.5 Injunctive Relief. The Parties acknowledge and agree that any breach or threatened breach of this Article 11 may result in irreparable harm to the Party whose Confidential Information is subject to such breach or threatened breach, for which remedies at law may not be adequate. Each Party, as a disclosing Party, shall therefore be entitled to seek injunctive relief in any court of competent jurisdiction in addition to any other remedy at law or in equity in the event of a material breach of this Article 11.

11.6 Term. The confidentiality obligations of the Parties contained in this Article�11 shall remain binding upon both Parties during the term of this Agreement and for a period of seven�(7) years after the termination or expiry of this Agreement, regardless of the cause of such termination.

ARTICLE 12

DISPUTE RESOLUTION

12.1 Commercial Disputes.

If any dispute arises out of or in connection with this Agreement (other than a dispute determined in accordance with Section�6.2(b) or a Technical Dispute, as defined in Section�12.2), the Parties will, in good faith, first try to resolve it amicably. In this regard, either Party may send a notice of dispute to the other, and each Party will appoint, within ten (10)�Business Days from receipt of the notice of dispute, a single representative having full power and authority to resolve the dispute. The representatives so designated will meet as necessary in order to resolve the dispute in a timely fashion. If these representatives fail to resolve the matter within one (1)�month from their appointment, or if a Party fails to appoint a representative within the ten (10)�Business Day period set forth above, the dispute will immediately be referred to the Chief Executive or Chief Operating Officer (or such other officer as he/she may designate) of each Party who will meet and discuss as necessary to try to resolve the dispute amicably. Should the Parties fail to reach a resolution under this Section�12.1, the Parties may resort to a court of competent jurisdiction in accordance with Section�14.14.

12.2 Technical Dispute Resolution.

If a dispute arises (other than disputes about the matters set out in Sections 6.2(b) and 12.1) between the Parties that is exclusively related to technical aspects of the manufacturing, packaging, labeling, quality control testing, handling, storage or other activities under this Agreement (a �Technical Dispute�), the Parties will make all reasonable efforts to

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resolve the dispute by amicable negotiations. In this regard, senior representatives of each Party will, as soon as practicable and in any event no later than ten (10)�Business Days after a written request from either Party to the other, meet in good faith to resolve any Technical Dispute. If, despite this meeting, the Parties are unable to resolve a Technical Dispute within a reasonable time, and in any event within thirty (30)�Business Days of this written request, the Technical Dispute will, at the request of either Party, be referred for determination to an expert in accordance with Schedule D. If the Parties cannot agree whether a dispute is a Technical Dispute, Section�12.1 will prevail. For greater certainty, the Parties agree that the release of the Products for sale or distribution under the applicable marketing approval for the Products will not by itself indicate compliance by NPI with its obligations for the Manufacturing Services and further that nothing in this Agreement (including Schedule D) will remove or limit the authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.

ARTICLE 13

INTELLECTUAL PROPERTY PROVISIONS

13.1 Grant.

(a) For the term of this Agreement, CUSTOMER hereby grants to NPI a non-exclusive, paid-up, royalty-free, non-transferable license to CUSTOMER Intellectual Property and CUSTOMER New Intellectual Property to perform the Manufacturing Services solely for CUSTOMER.

(b) NPI hereby grants to CUSTOMER, a perpetual, irrevocable, non-exclusive, paid-up, royalty-free, transferable, sub-licensable, worldwide license to use, modify and enhance any NPI Intellectual Property used in performing the Manufacturing Services to manufacture, use, sell or otherwise commercialize the Product and any other products that have ferric citrate as an active ingredient.

13.2 Ownership.

(a) CUSTOMER shall be the sole and exclusive owner of all CUSTOMER Intellectual Property and CUSTOMER New Intellectual Property.

(b) NPI shall be the sole and exclusive owner of all NPI Intellectual Property.

13.3 Disclosure; Assignment.

NPI: (a)�shall at all times during the term of this Agreement make prompt, full written disclosure to CUSTOMER and hold in trust for the sole right and benefit of CUSTOMER any CUSTOMER New Intellectual Property, and (b)�hereby assigns to CUSTOMER any and all right, title and interest throughout the world that NPI may have, now and in the future, in and to all CUSTOMER New Intellectual Property without any obligation on CUSTOMER to pay

�

- 35 -

royalties or other remuneration therefor, and (c)�shall cause all of its employees, consultants, agents and Affiliates to assign any and all right title and interest that they may have, now or in the future, in and to all CUSTOMER New Intellectual Property. To the extent CUSTOMER New Intellectual Property is copyrightable (including without limitation, computer programs, source code, object code and supporting documentation), it shall be deemed a �work made for hire� or alternatively a �specially commissioned work� under the Copyright Act of 1976 and shall become and remain the sole property of CUSTOMER. To the extent any such material may not be a �work made for hire�, NPI agrees to assign and does hereby assign such material to CUSTOMER. To the extent any of NPI�s rights in any CUSTOMER New Intellectual Property, including any moral rights, are not capable of assignment under applicable law, NPI hereby irrevocably and unconditionally waives all enforcement of such rights against, and grants to CUSTOMER the perpetual, sole and exclusive right and license to use and exploit such rights without restriction on a royalty-free basis to the maximum extent permitted under applicable law. NPI, on behalf of itself and its Affiliates, shall assist CUSTOMER, at CUSTOMER�s request and expense, in every proper way to secure CUSTOMER�s rights in any CUSTOMER New Intellectual Property in any and all countries, including the disclosure to CUSTOMER of all pertinent information and data with respect thereto, the execution of all documents, applications, specifications, oaths, assignments, recordations and all other instruments which CUSTOMER shall deem necessary or appropriate in order to apply for and obtain such rights, title and interest in and to such CUSTOMER New Intellectual Property. NPI�s obligation to execute or cause to be executed, when it is in its power to do so, any such instrument or papers shall continue after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world, provided that CUSTOMER shall promptly reimburse NPI for its reasonable costs and expenses incurred in connection with such execution.

13.4 Prosecution. Each Party will be solely responsible for the costs of filing, prosecution and maintenance of patents and patent applications on its own Inventions and/or copyrights and copyright applications on its own Intellectual Property.

13.5 Notification of improvements. NPI will give CUSTOMER written notice, as promptly as practicable, of all Inventions that can reasonably be deemed to constitute improvements or other modifications of the API, the Products or the NPI Intellectual Property used in performing the Manufacturing Services which are owned or otherwise controlled by NPI and which NPI uses to perform the Manufacturing Services. CUSTOMER will give NPI written notice, as promptly as practicable, of any Inventions that can reasonably be deemed to constitute improvements or other modifications of the API or Products or processes or technology specific to or dependent upon the API or the Products, which are owned or otherwise controlled by CUSTOMER and which CUSTOMER determines in its sole discretion is necessary for NPI to perform the Manufacturing Services.

13.6 No License.

Neither Party has, nor will it acquire, any interest in any of the other Party�s Intellectual Property unless otherwise expressly agreed to in writing. Neither Party will use any Intellectual Property of the other Party, except as specifically authorized by the other Party herein or by other written agreement or as required for the performance of its obligations under this Agreement.

�

- 36 -

ARTICLE 14

MISCELLANEOUS

14.1 Insurance.

Each Party will maintain commercial general liability insurance, including blanket contractual liability insurance covering through the term of this Agreement and for a period of three (3)�years thereafter, which insurance will afford limits of not less than (i)�* dollars ($*) for each occurrence for bodily injury or property damage liability arising out of premises and ongoing operations; and (ii)�* dollars ($*) in the aggregate for bodily injury or property damage liability with respect to product and completed operations liability. It is understood and agreed that insurance for products and completed operations liability may be maintained via a separate or stand-alone policy. NPI will obtain and maintain such insurance for any and all property owned or to be supplied to CUSTOMER under this Agreement when and for so long as NPI has possession or control over such property. If requested in writing each Party will provide the other with a certificate of insurance evidencing the above and showing the name of the issuing company, the policy number, the effective date, the expiration date and the limits of liability. NPI shall maintain all risk property coverage for building, contents and personal property of others in NPI�s care, custody and control. NPI shall also maintain worker�s compensation coverage at statutory limits and employer�s liability coverage of $*. A waiver of subrogation in favor of CUSTOMER shall be added to NPI�s general liability and worker�s compensation policies. A waiver of subrogation in favor of NPI will be added to CUSTOMER�s general liability policy. The insurance certificate will further provide for a minimum of thirty (30)�days written notice to the insured of a cancellation of, or material change in, the insurance.

14.2 Independent Contractors.

The Parties are independent contractors and this Agreement will not be construed to create between NPI and CUSTOMER any other relationship such as, by way of example only, that of employer-employee, principal agent, joint-venturer, co-partners or any similar relationship, the existence of which is expressly denied by the Parties hereto. A Party shall have no authority to bind or act on behalf of the other Party. This Agreement shall not entitle NPI to participate in any benefit plan or program of CUSTOMER. NPI shall be responsible for, and agrees to comply with, obligations under all applicable tax laws for payment of income and, if applicable, self employment tax. NPI is not entitled to worker�s compensation coverage by CUSTOMER, and NPI hereby waives any and all rights NPI may have to be covered under CUSTOMER�s worker�s compensation policies.

�

*	Confidential material redacted and filed separately with the Commission.

�

- 37 -

14.3 No Waiver.

Either Party�s failure to require the other Party to comply with any provision of this Agreement will not be deemed a waiver of such provision or any other provision of this Agreement, with the exception of Sections 6.2 and 8.2(a).

14.4 Assignment.

This Agreement shall inure to the benefit of and be binding upon the Parties hereto, their successors and assigns. The Parties agree:

(a) Except in connection with a sale of all or substantially all of its assets, NPI may not assign this Agreement except with the written consent of CUSTOMER.

(b) Subject to Section�8.2(d), CUSTOMER may assign this Agreement or any of its rights or obligations hereunder without approval from NPI. However, CUSTOMER will give prompt written notice to NPI of any assignment, any assignee will covenant in writing with NPI to be bound by the terms of this Agreement. Any partial assignment will be subject to a cost review of the assigned Products by NPI and is subject to assignee and NPI reaching agreement as to revisions, if any, to the fees. Failing such an agreement, NPI may terminate this Agreement with respect to the assigned Products on twelve (12)�months prior written notice to the assignee.

14.5 Force Majeure.

Neither Party will be liable for the failure to perform its obligations under this Agreement if the failure is caused by an event beyond that Party�s reasonable control, including, but not limited to, strikes or other labor disturbances, lockouts, riots, quarantines, communicable disease outbreaks, wars, acts of terrorism, fires, floods, storms, interruption of or delay in transportation, lack of or inability to obtain fuel, power or components or compliance with any order or regulation of any government entity acting within color of right (a �Force Majeure Event�). A Party claiming a right to excused performance under this Section�14.5 will immediately notify the other Party in writing of the extent of its inability to perform, which notice will specify the event beyond its reasonable control that prevents the performance.

14.6 Additional Product.

Additional products may be added to this Agreement upon the mutual agreement of both Parties and such additional products will be governed by the general conditions hereof with any special terms (including, without limitation, price) governed by amendments to Schedules A, B, and C as applicable.

�

- 38 -

14.7 Notices.

Any notice, approval, instruction or other written communication required or permitted hereunder will be sufficient if made or given to the other Party by personal delivery, by telecopy, facsimile communication, confirmed receipt email, or by sending the same by first class mail, postage prepaid to the respective addresses, telecopy, facsimile numbers, or electronic mail addresses as set forth below:

If to CUSTOMER:

Keryx Biopharmaceuticals, Inc.

750 Lexington Ave., 20^th Floor, New York, NY 10022

Attention: Ron Bentsur, CEO

Facsimile No.: 212-531-5961

Email address: [email protected]

with copy to: [email protected]

If to NPI:

Norwich Pharmaceuticals, Inc.

6826 State Highway 12, Norwich, NY 13815

Attention: Terence S. Novak, President

Facsimile No.: 607-335-3100

Email address: [email protected]

or to such other addresses, telecopy or facsimile numbers, or electronic mail addresses given to the other Party in accordance with the terms of this Section�14.7. Notices or written communications made or given by personal delivery, telecopy, facsimile, or electronic mail will be deemed to have been sufficiently made or given when sent (receipt acknowledged), or if mailed, five days after being deposited in the United States mail, postage prepaid or upon receipt, whichever is sooner.

14.8 Severability.

If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, this determination will not impair or affect the validity, legality or enforceability of the remaining provisions of this Agreement.

14.9 Entire Agreement.

This Agreement, together with the Confidentiality Agreement, the Quality Agreement and the Technical Services Agreement, constitutes the full, complete, final and integrated agreement between the Parties hereto relating to the subject matter hereof and supersedes all previous written or oral negotiations, commitments, agreements, transactions or understandings concerning the subject matter hereof. Any modification, amendment or supplement to this Agreement must be in writing and signed by authorized representatives of both Parties.

�

- 39 -

14.10 Other Terms.

No terms, provisions or conditions of any purchase order or other business form or written authorization used by CUSTOMER or NPI will have any effect on the rights, duties or obligations of the Parties under, or otherwise modify, this Agreement, regardless of any failure of CUSTOMER or NPI to object to those terms, provisions, or conditions unless the document specifically refers to this Agreement and is signed by both Parties.

14.11 No Third Party Benefit or Right.

Each Affiliate of CUSTOMER listed on Schedule 1.4 shall have the right to enforce the terms of this Agreement against NPI, subject to the same limitations and defenses as those available to CUSTOMER and without a right to vary, terminate or amend the terms of this Agreement. Subject to the foregoing sentence, nothing in this Agreement will confer or be construed as conferring on any third party any benefit or the right to enforce any express or implied term of this Agreement.

14.12 Execution in Counterparts.

This Agreement may be executed in two or more counterparts, by original or facsimile signature, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

14.13 Use of CUSTOMER Name.

NPI will not make any use of CUSTOMER�s name, trademarks or logo or any variations thereof, alone or in connection with any other word or words, without the prior written consent of CUSTOMER.

14.14 Governing Law, Venue.

This Agreement will be construed and enforced in accordance with the laws of the State of New York and the laws of the United States of America applicable therein, without reference to any principles of conflict of laws that would apply the law of another jurisdiction; the Parties hereby agree and consent that subject to Article 12, the venue for any dispute arising out of or relating to this Agreement shall lie solely and exclusively in the state or federal courts located in the State of New York. The Parties expressly reject any application to this Agreement of (a)�the United Nations Convention on Contracts for the International Sale of Goods; and (b)�the 1974 Convention on the Limitation Period in the International Sale of Goods, as amended by that certain Protocol, done at Vienna on April�11, 1980.

�

- 40 -

14.15 Headings.

The Parties agree that the section and article headings are inserted only for ease of reference, shall not be construed as part of this Agreement, and shall have no effect upon the construction or interpretation of any part hereof.

The remainder of this page was intentionally left blank.

�

- 41 -

IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Agreement as of the date first written above.

�


*Norwich Pharmaceuticals, Inc.*

By:	�	�

Name:	�	Terence S. Novak

Title:	�	President

Date:	�	�

*Keryx Biopharmaceuticals, Inc.*

By:	�	�

Name:	�	Ron Bentsur

Title:	�	Chief Executive Officer

Date:	�	�

�

- 42 -

SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

�



Product	��	Package

� *	��	*
� *	��	*
� *	��	*
� *	��	*
� *	��	*
� *	��	*
� *	��	*

Specifications:

Tablets Per Batch *kg: * Tablets per batch

Quantity of Ferric Citrate per 1g tablet: *mg per 1gram tablet.

�

*	Confidential material redacted and filed separately with the Commission.

SCHEDULE B

COMMERCIAL UNIT PRICE 2014

Proposal 130024R06

Pricing includes cost of all excipients and packaging components, as follows:

Minimum Bottle Wall Thickness *

�


Description	��	Lot�Size	��	Packaging	��	Price		�
*	��	*	��	*	��	$	��	*�
*	��	*	��	*	��	$	��	*�
*	��	*	��	*	��	$	��	*�
*	��	*	��	*	��	$	��	*�
*	��	*	��	*	��	$	��	*�
*	��	*	��	*	��	$	��	*�
*	��	*	��	*	��	$	��	*�

Minimum Bottle Wall Thickness *

�


Description	��	Lot�Size	��	Packaging	��	Price		�
*	��	*	��	*	��	$	��	*�

�

*	Confidential material redacted and filed separately with the Commission.

�

- 2 -

SCHEDULE C

ANNUAL STABILITY TESTING

Proposal 130378

NPI and CUSTOMER will agree in writing on any stability testing to be performed by NPI in connection with the Products. The agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by CUSTOMER for this testing.

�

*	Confidential material redacted and filed separately with the Commission.

�

- 3 -

SCHEDULE D

TECHNICAL DISPUTE RESOLUTION

Technical Disputes that cannot be resolved by negotiation under Section�12.2 will be resolved as follows:

1. Appointment of Expert. Within ten (10)�Business Days after a Party requests, under Section�12.2 of the Agreement, that an expert be appointed to resolve a Technical Dispute, the Parties will jointly appoint a mutually acceptable expert with experience and expertise in the subject matter of the dispute. If the Parties are unable to so agree within such ten (10)�Business Day period, or if disclosure of a conflict by an expert under Paragraph 2 hereof which results in the Parties not confirming the appointment of the expert, then an expert with experience and expertise in the subject matter of dispute (willing to act in that capacity hereunder) will be appointed by an experienced arbitrator on the roster of JAMS.

2. Conflicts of Interest. Any person appointed as an expert will be entitled to act and continue to act as an expert even if at the time of his appointment or at any time before he gives his determination, he has or may have some interest or duty which conflicts or may conflict with his appointment if, before accepting such appointment (or as soon as practicable after he becomes aware of the conflict or potential conflict), he fully discloses the interest or duty and the Parties after the disclosure will have confirmed his appointment.

3. No Arbitrator. No expert will be deemed to be an arbitrator and the provisions of the Federal Arbitration Act or of any other applicable statute (foreign or domestic) and the law relating to arbitration will not apply to the expert or the expert�s determination or the procedure by which the expert reaches his determination under this Schedule D.

4. Procedure. Where an expert is appointed:

�

(a)

Timing. The expert will be so appointed on condition that (i)�he promptly fixes a reasonable time and place for receiving representations, submissions or information from the Parties and that he issues the authorizations to the Parties and any relevant third party for the proper conduct of his determination and any hearing and (ii)�he renders his decision (with full reasons) within fifteen (15)�Business Days (or another date as the Parties and the expert may agree) after receipt of all information requested by him under paragraph 4(b) hereof.

�

(b)

Disclosure of Evidence. The Parties undertake one to the other to give to any expert all such evidence and information within their respective possession or control as the expert may reasonably consider necessary for determining the matter before him which they will disclose promptly and in any event within five (5)�Business Days of a written request from the relevant expert to do so.

�

(c)

Advisors. Each Party may appoint any counsel, consultants and advisors as it feels appropriate to assist the expert in his determination and so as to present their respective cases so that at all times the Parties will co-operate and seek to narrow and limit the issues to be determined.

�

(d)

Appointment of New Expert. If within the time specified in paragraph 4(a) above the expert has not rendered a decision in accordance with his appointment, a new expert may (at the request of either Party) be appointed and the appointment of the existing expert will thereupon cease for the purposes of determining the matter at issue between the Parties save that if the existing expert renders his decision with full reasons prior to the appointment of the new expert, then this decision will have effect and the proposed appointment of the new expert will be withdrawn.

�

(e)

Final and Binding. The determination of the expert will, except for fraud or manifest error, be final and binding upon the Parties.

�

(f)

Costs. Each Party will bear its own costs for any matter referred to an expert hereunder and, in the absence of express provision in the Agreement to the contrary, the costs and expenses of the expert will be shared equally by the Parties.

For greater certainty, the release of the Product(s) for sale or distribution under the applicable marketing approval for the Product(s) will not by itself indicate compliance by NPI with its obligations for the Manufacturing Services and further that nothing in this Agreement (including this Schedule D) will remove or limit the authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.

�

- 2 -

SCHEDULE E

QUALITY AGREEMENT

[attached]

SCHEDULE F

Material�Lead Times for Minimum Order Quantities

�


Material	��	Lead�Times	��	Minimum�Order�Quantities
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*
*	��	*	��	*

�

*	Confidential material redacted and filed separately with the Commission.

Schedule 1.4

Customer Affiliates

�

1.	Keryx Biopharma UK Limited

Exhibit 10.2

CONFIDENTIAL TREATMENT REQUESTED. Confidential portions of this document have been redacted and have been separately filed with the Commission.

FIRST ADDENDUM TO MANUFACTURING SERVICES AGREEMENT

Keryx Biopharmaceuticals, Inc. (�CUSTOMER�) and Norwich Pharmaceuticals, Inc. (�NPI�) have entered into a Manufacturing Services Agreement as of January�17, 2014 (�MSA�). CUSTOMER and NPI hereby agree to revise the MSA to include the items set forth in this first addendum, dated October�24, 2014 (�First Addendum�), as follows:

All capitalized terms, unless defined herein, have the meaning set forth in the MSA.

A. API Availability

For clarity, CUSTOMER acknowledges that if CUSTOMER must cancel or reschedule a Batch due to failure to delivery API within the time required by Section�3.2(a) of the MSA, unless otherwise agreed to in writing by NPI, the cancellation fees set forth in Article�5 of the MSA will apply.

B. Blend Iron Assay Testing

CUSTOMER implemented a Blend Iron Assay test following the completion of the blending stage to determine if the batch proceeds to the compression stage. CUSTOMER will be responsible for the Price of any Batch, and costs associated with API and applicable destruction fees, for NPI�s Manufacturing Services performed through the blending stage in the event that the Batch fails Blend Iron Assay process control testing (i.e., a failure is outside of the *-*% range). Notwithstanding the foregoing, if any such Batch fails Blend Iron Assay process control testing, NPI will provide CUSTOMER with all related documentation (batch records, lab notebooks, and investigation reports pertaining to such Batch, as per the executed Quality agreement.

C. Bulk Hold Studies

CUSTOMER�s process for the Product does not include any bulk hold stability studies, including but not limited to bulk hold granulation stability, bulk hold blend stability, bulk hold core tablets stability and bulk hold finished product stability (�Stability Testing�), therefore, Keryx hereby agrees to be responsible to NPI for the Price for the Batch, and costs associated with API and applicable destruction fees, for NPI�s Manufacturing Services in the event that the applicable Batch does not meet Specifications relating to stability.

D. *:

Product is known to experience * relating to the physical properties of the API, which could result in failure of Product to conform to Specifications such as * even though *.�Therefore,�CUSTOMER agrees that it will be responsible for the Price of any Batch, and costs associated with API and applicable destruction fees, for any Batch requiring additional labor or that has been rejected for failure to meet such applicable Specifications.

�

*	Confidential material redacted and filed separately with the Commission.

IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this First Addendum as of the date first written above.

�


Norwich Pharmaceuticals, Inc.

By:	�

Name:	�	John Bender

Title:	�	VP, Commercial Operations

Keryx Biopharmaceuticals, Inc.

By:	�

Name:	�	Ron Bentsur

Title:	�	CEO

Exhibit 31.1

CERTIFICATION OF PERIODIC REPORT PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Ron Bentsur, certify that:

�

1.	I have reviewed this quarterly report on Form 10-Q of Keryx Biopharmaceuticals, Inc.;

�

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

�

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

�

The registrant�s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

�

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

�

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

�

Evaluated the effectiveness of the registrant�s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

�

Disclosed in this report any change in the registrant�s internal control over financial reporting that occurred during the registrant�s most recent fiscal quarter (the registrant�s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant�s internal control over financial reporting; and

�

5.	The registrant�s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant�s auditors and the audit committee of the registrant�s board of directors (or persons performing the equivalent functions):

�

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant�s ability to record, process, summarize and report financial information; and

�

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�


Date: November�6, 2014	�	/s/ Ron Bentsur
	�	Ron Bentsur
	�	Chief Executive Officer
	�	Principal Executive Officer

Exhibit 31.2

CERTIFICATION OF PERIODIC REPORT PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, James F. Oliviero, certify that:

�

1.	I have reviewed this quarterly report on Form 10-Q of Keryx Biopharmaceuticals, Inc.;

�

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

�

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

�

5.	The registrant�s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant�s auditors and the audit committee of the registrant�s board of directors (or persons performing the equivalent functions):

�

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant�s internal control over financial reporting.

�


Date: November�6, 2014	�	/s/ James F. Oliviero
	�	James F. Oliviero, CFA
	�	Chief Financial Officer
	�	Principal Financial and Accounting Officer

Exhibit 32.1

STATEMENT OF CHIEF EXECUTIVE OFFICER OF

KERYX BIOPHARMACEUTICALS, INC.

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Keryx Biopharmaceuticals, Inc. (the �Company�) on Form 10-Q for the period ended September�30, 2014 as filed with the Securities and Exchange Commission (the �Report�), I, Ron Bentsur, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. � 1350, as adopted pursuant to � 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

�

The Report fully complies with the requirements of Section�13(a) or 15(d) of the Securities Exchange Act of 1934; and

�

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

�


Date: November�6, 2014	��	/s/ Ron Bentsur
	��	Ron Bentsur
	��	Chief Executive Officer
	��	Principal Executive Officer

Exhibit 32.2

STATEMENT OF CHIEF FINANCIAL OFFICER OF

KERYX BIOPHARMACEUTICALS, INC.

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION�906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Keryx Biopharmaceuticals, Inc. (the �Company�) on Form 10-Q for the period ended September�30, 2014 as filed with the Securities and Exchange Commission (the �Report�), I, James F. Oliviero, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. � 1350, as adopted pursuant to � 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

�

The Report fully complies with the requirements of Section�13(a) or 15(d) of the Securities Exchange Act of 1934; and

�

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

�


Date: November�6, 2014	�	/s/ James F. Oliviero
	�	James F. Oliviero, CFA
	�	Chief Financial Officer
	�	Principal Financial and Accounting Officer

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