[Condensed Interim Consolidated Financial Statements](index=1&type=section&id=CONDENSED%20INTERIM%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents XORTX Therapeutics Inc.'s interim financial statements, covering financial position, loss, equity, cash flows, and detailed notes [Condensed Interim Consolidated Statements of Financial Position](index=2&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Financial%20Position) XORTX Therapeutics Inc.'s financial position as of March 31, 2025, shows decreased total assets and equity, stable liabilities, and a significant cash reduction Consolidated Statements of Financial Position Summary | Metric | March 31, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :--------------------------------- | :------------------- | :-------------------- | :--------- | :--------- | | **Assets** | | | | | | Cash | 1,895,238 | 2,473,649 | (578,411) | -23.38% | | Total Current Assets | 2,103,439 | 2,676,698 | (573,259) | -21.42% | | Total Assets | 3,498,668 | 4,094,527 | (595,859) | -14.55% | | **Liabilities** | | | | | | Accounts payable & accrued liabilities | 415,688 | 147,205 | 268,483 | 182.39% | | Derivative warrant liability | 326,000 | 572,000 | (246,000) | -43.01% | | Total Liabilities | 757,350 | 757,990 | (640) | -0.08% | | **Shareholders' Equity** | | | | | | Total Shareholders' Equity | 2,741,318 | 3,336,537 | (595,219) | -17.84% | [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=3&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) For Q1 2025, XORTX Therapeutics Inc. reported a significantly reduced net loss, driven by a favorable fair value adjustment on derivative warrant liability Consolidated Statements of Loss and Comprehensive Loss Summary | Metric | Three months ended March 31, 2025 ($) | Three months ended March 31, 2024 ($) | Change ($) | Change (%) | | :-------------------------------------- | :------------------------------------ | :------------------------------------ | :--------- | :--------- | | Research and development | 276,309 | 73,643 | 202,666 | 275.20% | | Consulting, wages and benefits | 283,915 | 224,721 | 59,194 | 26.34% | | Investor relations | 150,043 | 439,405 | (289,362) | -65.85% | | Loss before other items | (963,456) | (1,088,616) | 125,160 | -11.50% | | Fair value adjustment on derivative warrant liability | 246,000 | (1,724,792) | 1,970,792 | -114.26% | | Net loss and comprehensive loss for the period | (698,673) | (3,018,936) | 2,320,263 | -76.86% | | Basic and diluted loss per common share | (0.19) | (1.24) | 1.05 | -84.68% | | Weighted average number of common shares outstanding | 3,737,101 | 2,429,268 | 1,307,833 | 53.84% | [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity decreased from **$3.34 million** to **$2.74 million**, influenced by share issuances, costs, and comprehensive loss Consolidated Statements of Changes in Shareholders' Equity Summary | Metric | Balance, December 31, 2024 ($) | Shares issued pursuant to at-the-market offering ($) | Share issuance costs ($) | Pre-funded warrants exercised ($) | Share-based payments ($) | Comprehensive loss for the period ($) | Balance, March 31, 2025 ($) | | :--------------------------------- | :----------------------------- | :--------------------------------------------------- | :----------------------- | :-------------------------------- | :----------------------- | :------------------------------------ | :-------------------------- | | Share capital | 18,493,571 | 113,547 | (19,064) | 324,645 | - | - | 18,912,699 | | Reserves | 6,039,078 | - | - | (324,643) | 8,969 | - | 5,723,404 | | Accumulated deficit | (21,168,253) | - | - | - | - | (698,673) | (21,866,926) | | Total | 3,336,537 | 113,547 | (19,064) | 2 | 8,969 | (698,673) | 2,741,318 | [Condensed Interim Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, XORTX Therapeutics Inc. reported a net cash decrease of **$578,411**, primarily due to operating activities, contrasting with a prior year increase Consolidated Statements of Cash Flows Summary | Cash Flow Activity | Three months ended March 31, 2025 ($) | Three months ended March 31, 2024 ($) | Change ($) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :--------- | | Operating activities | (643,730) | (1,303,852) | 660,122 | | Investing activities | (3,385) | (2,623) | (762) | | Financing activities | 67,577 | 1,703,567 | (1,635,990) | | Effect of foreign exchange on cash | 1,127 | (9,317) | 10,444 | | (Decrease) Increase in cash | (578,411) | 387,775 | (966,186) | | Cash, beginning of period | 2,473,649 | 3,447,665 | (974,016) | | Cash, end of period | 1,895,238 | 3,835,440 | (1,940,202) | [Notes to the Condensed Interim Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Consolidated%20Financial%20Statements) These notes provide detailed information on operations, accounting policies, critical judgments, and financial instruments, highlighting going concern uncertainty [1. Nature of operations and going concern](index=6&type=section&id=1.%20Nature%20of%20operations%20and%20going%20concern) XORTX Therapeutics Inc. is a late-stage clinical pharmaceutical company developing gout and kidney disease therapies, facing significant going concern uncertainty - XORTX is a late-stage clinical pharmaceutical company focused on developing innovative therapies to treat gout and progressive kidney disease modulated by aberrant purine and uric acid metabolism[9](index=9&type=chunk) - The Company's current focus is on developing products to slow and/or reverse the progression of these diseases[9](index=9&type=chunk) - There is a **material uncertainty** that casts significant doubt about the Company's ability to continue as a going concern, contingent on raising necessary capital and generating revenues[10](index=10&type=chunk) [2. Basis of preparation](index=6&type=section&id=2.%20Basis%20of%20preparation) These interim financial statements are prepared under IAS 34, based on historical cost, and consolidate the Company and its subsidiary - The financial statements are prepared in accordance with **International Accounting Standard 34 (IAS 34)**, Interim Financial Reporting[11](index=11&type=chunk) - They are prepared using the historical cost convention, except for financial instruments measured at fair value, and incorporate the financial statements of the Company and its 100% owned subsidiary[12](index=12&type=chunk)[13](index=13&type=chunk) [3. Material Accounting policies](index=7&type=section&id=3.%20Material%20Accounting%20policies) These interim financial statements adhere to the material accounting policies disclosed in the annual financial statements for December 31, 2024 - These condensed interim consolidated financial statements have been prepared on a basis consistent with the material accounting policies disclosed in the annual financial statements for the year ended December 31, 2024[15](index=15&type=chunk) [4. Critical accounting judgments and estimates](index=7&type=section&id=4.%20Critical%20accounting%20judgments%20and%20estimates) Financial statement preparation involves significant management judgments and estimates, impacting reported amounts across various accounting areas - Management makes judgments and estimates that affect the amounts reported in the financial statements, which are subject to change and could be material[16](index=16&type=chunk) - Critical judgments include: Share-based payment transactions and warrant liabilities, classification of contract payments, impairment of intangible assets, determination of functional currency, treatment of research and development costs, leases, classification of pre-funded warrants, and current and deferred taxes[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) [5. Cash](index=8&type=section&id=5.%20Cash) The Company's cash balance decreased to **$1.90 million** as of March 31, 2025, with interest-bearing deposits earning **4.15%** annually Cash Breakdown | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :------------------- | :-------------------- | | Cash | 117,605 | 53,686 | | Interest-bearing deposits | 1,777,633 | 2,419,963 | | Total Cash | 1,895,238 | 2,473,649 | - The current annual interest rate earned on interest-bearing deposits is **4.15%** (December 31, 2024 – 3.62%)[25](index=25&type=chunk) [6. Prepaid expenses](index=9&type=section&id=6.%20Prepaid%20expenses) Total prepaid expenses slightly increased to **$190,949**, driven by higher investor relations and administrative services, offset by lower prepaid insurance Prepaid Expenses Breakdown | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :-------------------------------- | :------------------- | :-------------------- | | Research and development | - | 1,167 | | Insurance | 105,037 | 158,007 | | Investor relations conferences and services | 70,268 | 19,490 | | Administrative services and other | 15,644 | 6,748 | | Total | 190,949 | 185,412 | [7. Contract payments](index=9&type=section&id=7.%20Contract%20payments) The Company holds a **$1.2 million** non-current asset for contract payments, designated for future regulatory and clinical trial programs - The Company paid **$1,200,000** through the issuance of units in a private placement to Prevail InfoWorks Inc. in 2020, to be applied to future regulatory and clinical trial programs[28](index=28&type=chunk) [8. Intangible assets](index=9&type=section&id=8.%20Intangible%20assets) Intangible assets, primarily licensed intellectual property, decreased slightly to **$179,972** due to amortization, with no royalties accrued or paid Intangible Assets Carrying Values | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :------------------- | :-------------------- | | Cost | 379,112 | 375,727 | | Accumulated amortization | 199,140 | 192,619 | | Carrying values | 179,972 | 183,108 | - The Company has licensed intellectual property from third parties, including patents relating to allopurinol for hypertension, uric acid lowering agents for metabolic syndrome, and a patent for treating insulin resistance[30](index=30&type=chunk)[32](index=32&type=chunk) - As of March 31, 2025, **no royalties have been accrued or paid** on any of the licensed intellectual property agreements[30](index=30&type=chunk)[32](index=32&type=chunk) [9. Property and equipment](index=11&type=section&id=9.%20Property%20and%20equipment) Property and equipment carrying value decreased to **$15,257** due to amortization, following a 2024 office lease extension that added **$96,998** to right-of-use assets Property and Equipment Carrying Values | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :------------------- | :-------------------- | | Cost | 234,930 | 234,930 | | Accumulated amortization | 219,673 | 200,209 | | Carrying values | 15,257 | 34,721 | - During the year ended December 31, 2024, the Company extended its office lease, recognizing a **$96,998** right-of-use asset addition and a corresponding increase to the lease liability[33](index=33&type=chunk) [10. Accounts payable and accrued liabilities](index=11&type=section&id=10.%20Accounts%20payable%20and%20accrued%20liabilities) Accounts payable and accrued liabilities significantly increased to **$415,688**, primarily due to a substantial rise in trade payables Accounts Payable and Accrued Liabilities Breakdown | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :---------------------- | :------------------- | :-------------------- | | Trade payables | 354,037 | 84,020 | | Accrued liabilities | 61,651 | 63,185 | | Total | 415,688 | 147,205 | [11. Lease obligation](index=11&type=section&id=11.%20Lease%20obligation) The office lease obligation decreased to **$15,662** due to payments, with an imputed interest rate of **8%** per annum Lease Obligation Summary | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :------------------------------------ | :------------------- | :-------------------- | | Balance, beginning of period | 38,785 | 11,510 | | Additions | - | 96,998 | | Lease payments | (23,123) | (69,723) | | Balance, end of period | 15,662 | 38,785 | - The Company's office lease expires in 2025 and has an imputed interest rate of **8%** per annum[35](index=35&type=chunk) [12. Share capital and reserves](index=12&type=section&id=12.%20Share%20capital%20and%20reserves) This section details changes in share capital and reserves, including common share issuances, warrant activities, stock options, and derivative warrant liability revaluation [a) Authorized and issued](index=12&type=section&id=a)%20Authorized%20and%20issued) The Company has unlimited authorized common shares, with **3,788,246** shares issued as of March 31, 2025 - The Company has unlimited common shares authorized, with **3,788,246** shares issued at March 31, 2025 (December 31, 2024 – 3,481,375)[37](index=37&type=chunk) [b) Issuances](index=12&type=section&id=b)%20Issuances) In Q1 2025, the Company issued **73,871** common shares for **$113,547** via an at-the-market offering and **233,000** from pre-funded warrant exercises - Three months ended March 31, 2025: * Issued **73,871** common shares in an at-the-market offering for gross proceeds of **$113,547**[38](index=38&type=chunk) * Issued **233,000** common shares for the exercise of pre-funded warrants for **$2**[39](index=39&type=chunk) - Three months ended March 31, 2024: * Closed a non-brokered offering of **899,717** common share units for aggregate gross proceeds of **$2,000,549**[40](index=40&type=chunk) * Issued **5,000** common shares for the exercise of warrants for **$16,570**[43](index=43&type=chunk) [c) Diluted Weighted Average Number of Common Shares Outstanding](index=13&type=section&id=c)%20Diluted%20Weighted%20Average%20Number%20of%20Common%20Shares%20Outstanding) Basic and diluted weighted average common shares outstanding for Q1 2025 were **3,737,101**, with potential conversions excluded due to net loss Weighted Average Common Shares Outstanding | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Basic weighted average common shares outstanding | 3,737,101 | 2,429,268 | | Diluted weighted average common shares outstanding | 3,737,101 | 2,429,268 | - Due to a net loss, the diluted loss per share calculation excludes any potential conversion of options and warrants that would decrease loss per share[44](index=44&type=chunk) [d) Common Share Purchase Warrants](index=13&type=section&id=d)%20Common%20Share%20Purchase%20Warrants) Common share purchase warrants outstanding remained at **2,830,737** with a **$3.60** weighted average exercise price and **2.34** years remaining life Common Share Purchase Warrants Activity | Metric | Number of Warrants | Weighted Average Exercise price ($) | | :------------------------------------ | :----------------- | :-------------------------------- | | Balance, December 31, 2023 | 1,125,210 | 22.31 | | Granted – February 9, 2024 | 824,767 | 3.13 | | Granted – February 23, 2024 | 74,950 | 3.13 | | Granted – October 18, 2024 | 810,810 | 2.18 | | Exercised | (5,000) | 3.13 | | Balance, March 31, 2025 and December 31, 2024 | 2,830,737 | 3.60 | - The weighted average contractual remaining life of unexercised warrants was **2.34 years** at March 31, 2025 (December 31, 2024 – 2.58 years)[47](index=47&type=chunk) - During 2024, the Company amended the exercise price of **1,125,210** common share purchase warrants, introducing an acceleration expiry provision if the share price exceeds **$6.50** for 10 consecutive trading days[46](index=46&type=chunk) [e) Pre-Funded Warrants](index=14&type=section&id=e)%20Pre-Funded%20Warrants) All pre-funded warrants were exercised during Q1 2025 at an exercise price of **$0.00001** per share, resulting in a zero balance Pre-Funded Warrants Activity | Metric | Number of Warrants | Weighted Average Exercise price ($) | | :------------------------------------ | :----------------- | :-------------------------------- | | Balance, December 31, 2023 | - | - | | Granted – October 18, 2024 | 490,810 | 0.00001 | | Exercised | (257,810) | 0.00001 | | Balance, December 31, 2024 | 233,000 | 0.00001 | | Exercised | (233,000) | 0.00001 | | Balance, March 31, 2025 | - | - | [f) Finders' and Underwriters Warrants](index=14&type=section&id=f)%20Finders'%20and%20Underwriters%20Warrants) Finders' and underwriters' warrants outstanding remained at **50,298** with a **$23.57** weighted average exercise price and **2.00** years remaining life Finders' and Underwriters Warrants Activity | Metric | Number of Warrants | Weighted Average Exercise price ($) | | :------------------------------------ | :----------------- | :-------------------------------- | | Balance, March 31, 2025 and December 31, 2024 | 50,298 | 23.57 | - The weighted average contractual remaining life of unexercised finders' and underwriters' warrants was **2.00 years** at March 31, 2025 (December 31, 2024 – 2.24 years)[50](index=50&type=chunk) [g) Stock Options](index=15&type=section&id=g)%20Stock%20Options) The Stock Option Plan allows options up to **10%** of outstanding shares, with **147,763** options outstanding and **$8,969** in share-based payments for Q1 2025 - The Company's Stock Option Plan allows for the issuance of stock options up to **10%** of the then issued and outstanding common shares[52](index=52&type=chunk) Stock Option Activity | Metric | Number of Options | Weighted Average Exercise price (CAD) | | :------------------------------------ | :---------------- | :------------------------------------ | | Balance, December 31, 2023 | 103,922 | 16.60 | | Granted – March 4, 2024 | 39,483 | 4.50 | | Granted – April 8, 2024 | 8,000 | 5.00 | | Granted – December 18, 2024 | 13,000 | 1.75 | | Expired | (16,642) | 22.22 | | Balance, March 31, 2025 and December 31, 2024 | 147,763 | 10.80 | | Vested and exercisable, March 31, 2025 | 113,764 | 12.83 | - During the three months ended March 31, 2025, the Company recorded share-based payments of **$8,969** (2024 - $53,134)[54](index=54&type=chunk) [h) Derivative Warrant Liability](index=16&type=section&id=h)%20Derivative%20Warrant%20Liability) Derivative warrant liability decreased to **$326,000** due to a favorable fair value adjustment, classified as financial liabilities due to currency or cashless settlement terms - Warrants are recorded as derivative financial liabilities if the exercise price is denominated in a currency other than the functional currency or if they can be settled on a cashless basis[58](index=58&type=chunk) - Effective January 1, 2023, CAD denominated warrants were reclassified to derivative financial liabilities due to the change in the Company's functional currency to USD[60](index=60&type=chunk) Derivative Warrant Liability Activity | Metric | Amount ($) | | :------------------------------------ | :--------- | | Balance at December 31, 2023 | 531,000 | | Warrants issued February 9, 2024 | 865,000 | | Warrants issued February 23, 2024 | 103,000 | | Warrants exercised | (5,244) | | Fair value adjustment | 1,724,792 | | Balance at March 31, 2024 | 3,218,548 | | Reclassified to reserves | (123,651) | | Fair value and other adjustments | (2,522,897) | | Balance at December 31, 2024 | 572,000 | | Fair value adjustment | (246,000) | | Balance at March 31, 2025 | 326,000 | [13. Related party transactions](index=18&type=section&id=13.%20Related%20party%20transactions) Related party transactions, primarily compensation to directors and officers, totaled **$235,371** for Q1 2025, a decrease mainly from lower share-based payments - Transactions with related parties include wages, benefits, professional fees, and directors' fees paid or accrued to the CEO, CFO, CMO, CBO, and other directors[64](index=64&type=chunk) Related Party Compensation | Category | Three months ended March 31, 2025 ($) | Three months ended March 31, 2024 ($) | | :---------------------- | :------------------------------------ | :------------------------------------ | | Management Compensation | 184,589 | 191,464 | | Directors' fees | 45,833 | 41,821 | | Share-based payments | 4,949 | 38,103 | | Total | 235,371 | 271,388 | [14. Financial instruments and risk management](index=19&type=section&id=14.%20Financial%20instruments%20and%20risk%20management) The Company's financial instruments include cash, receivables, payables, lease obligations, and derivative warrant liability, exposing it to various financial risks - The Company's financial instruments consist of cash, accounts receivable, accounts payable and accrued liabilities, lease obligation, and derivative warrant liability[66](index=66&type=chunk) - Derivative warrant liability is carried at fair value and is classified within **Level 3** of the fair value hierarchy[66](index=66&type=chunk) - The Company is exposed to foreign currency risk, interest rate risk, market risk, credit risk, and liquidity risk, with no changes in risk management policies since December 31, 2024[67](index=67&type=chunk) [15. Capital management](index=19&type=section&id=15.%20Capital%20management) Capital, defined as shareholders' equity, is managed to ensure liquidity for R&D and operations, aiming for going concern and optimal shareholder returns - The Company defines capital as shareholders' equity and manages it to support research and development and sustain future business development[68](index=68&type=chunk) - The objective is to ensure the entity continues as a going concern and maintain optimal returns to shareholders, with no changes in capital management during the period[68](index=68&type=chunk)[69](index=69&type=chunk) [16. Commitments](index=20&type=section&id=16.%20Commitments) The Company has long-term commitments including **$321,000** annually for officer employment and **$227,122** for clinical trial and business activities Long-Term Commitments | Commitment Type | March 31, 2025 ($) | December 31, 2024 ($) | | :------------------------------------ | :------------------- | :-------------------- | | Management services – officers | 321,000 | 321,000 | - The Company has committed to payments totaling **$227,122** (December 31, 2024 - $323,000) related to its clinical trial, manufacturing, and other regular business activities, expected over the next two years[71](index=71&type=chunk) [17. Segmented information](index=20&type=section&id=17.%20Segmented%20information) XORTX Therapeutics Inc. operates as a single segment focused on hyperuricemia-related therapies, with all long-term assets located in Canada - The Company operates in one reportable operating segment: the development and commercialization of therapies to treat hyperuricemia related diseases[72](index=72&type=chunk) - All long-term assets of the Company are located in Canada[72](index=72&type=chunk)

Financial Performance and Position - As of December 31, 2024, the company's cash and cash equivalents amounted to $2,473,649, a decrease of 28.2% from $3,447,665 in 2023 [661]. - The total accounts payable and accrued liabilities decreased by 48.0% from $283,428 in 2023 to $147,205 in 2024 [661]. - The lease liability increased from $11,510 in 2023 to $38,785 in 2024, indicating a significant rise in obligations [661]. - The derivative warrant liability rose from $531,000 in 2023 to $572,000 in 2024, reflecting a 7.7% increase [661]. - The company's maximum exposure to credit risk as of December 31, 2024, is the carrying value of its financial assets, which is $2,473,649 [662]. - The total financial liabilities due within three months as of December 31, 2024, is $170,329, while the total liabilities for 2023 were $294,938 [665]. - The company is exposed to a net currency risk of $573,336 as of December 31, 2024, with a potential effect of +/- 10% change in currency amounting to $57,334 [667]. - The company has implemented a planning and budgeting process to manage liquidity risk and ensure it can meet its financial obligations [663]. - The fair value of cash and cash equivalents approximates their carrying values due to their short-term nature [660]. - There have been no changes in risk management policies since December 31, 2024 [668]. Clinical Development and Programs - The Company launched a precision medicine program targeting kidney disease, linking genetic factors to the over-expression of XO [333]. - The XRx-008 program for ADPKD is in late clinical stages, with plans for a Phase 3 registration trial to support NDA submission [352]. - The Company is developing a combination therapy for AKI associated with respiratory virus infection, integrating intravenous and oral treatments [355]. - The XRx-026 program aims to decrease chronically high serum uric acid levels by inhibiting the xanthine oxidase enzyme, potentially providing a significant treatment option for gout [383]. - The XRx-008 program aims to decrease chronic kidney disease progression in patients with ADPKD, addressing symptoms like increased kidney volume and hypertension [390]. - XRx-101 is being developed for AKI associated with respiratory virus infections, with 36% of hospitalized COVID-19 patients experiencing AKI [400]. - XRx-101 aims to rapidly decrease SUA concentrations to protect kidney function during hospitalization, targeting a patient group currently without approved treatments for AKI [403]. - XRx-225 has shown potential to significantly decrease proteinuria and improve kidney function by lowering uric acid levels, even in patients receiving standard care [412]. - XRx-225 is currently in non-clinical development stages, with plans to advance to Phase 1 clinical testing pending FDA discussions [413]. Regulatory and Approval Processes - The company plans to pursue FDA approval for XRx-101 under Section 505(b)(2) of the FDCA, leveraging prior research and existing formulations [404]. - The cost of preparing and submitting a New Drug Application (NDA) is substantial, currently over $4.3 million for an NDA with clinical information [448]. - The annual program fee for an approved NDA is currently over $400,000, with fees typically increased annually [448]. - The FDA seeks to review applications for standard review drug products within ten months and priority review drugs within six months [450]. - The FDA may impose clinical holds at any time during the life of an IND due to safety concerns or non-compliance [440]. - The approval process may require substantial post-approval testing and surveillance to monitor the drug's safety or efficacy [454]. - The FDA has 60 days to determine whether an NDA will be accepted for filing, followed by an in-depth review [450]. - The FDA may issue a Complete Response Letter (CRL) detailing deficiencies in the NDA, which could require additional clinical trials [452]. - Regulatory agencies require extensive monitoring and auditing of all clinical activities and data throughout the clinical development phases [445]. - The requirement for a Risk Evaluation and Mitigation Strategy (REMS) can materially affect the potential market and profitability of the drug [454]. Market and Competitive Landscape - The competitive landscape includes major pharmaceutical and biotechnology companies, with the company facing challenges in securing market position against established therapies [429]. - The company’s commercial opportunity may be impacted if competitors develop safer or more effective therapies, or if they obtain regulatory approval more rapidly [432]. - Third-party payors may deny coverage or reimbursement if products are deemed not medically necessary, affecting sales potential [496]. - The pharmaceutical industry faces pricing pressures due to managed healthcare trends and legislative proposals, impacting reimbursement rates from third-party payors [497]. - Legislative changes at the state level may impose additional pricing constraints and affect demand for approved products [505]. Intellectual Property and Patent Strategy - The company aims to secure patent protection for its product candidates and expand its intellectual property holdings through in-licensing and new compositions [414]. - The patent portfolio includes five active patent families, with claims covering various therapeutic applications including diabetic nephropathy and insulin resistance [418]. - Owners of relevant drug patents may apply for up to a five-year patent term extension after NDA approval [462]. - The Orphan Drug Act allows for a seven-year exclusivity period for drugs approved for rare diseases affecting fewer than 200,000 individuals in the U.S. [466]. Healthcare Regulations and Compliance - The company is subject to various healthcare laws and regulations that could impact marketing and sales of approved products [506]. - The company must ensure compliance with the federal Anti-Kickback Statute and other healthcare laws to avoid significant liabilities [507]. - Compliance with evolving EU data export laws is critical, especially following the Schrems II decision, which complicates data transfers to the U.S. [495]. - Non-compliance with foreign regulatory requirements may result in fines, suspension of clinical trials, or withdrawal of regulatory approvals [493]. - The FDA and other agencies enforce laws prohibiting the promotion of off-label uses, with significant penalties for violations [475]. Research and Development Insights - Key findings from a study on Polycystic Kidney Disease indicated that elevated serum uric acid worsens kidney conditions, while XO inhibitors can reduce uric acid levels and cyst growth [335]. - Approximately 2-4% of patients treated with allopurinol develop adverse reactions, creating an unmet medical need for alternative treatments for chronic gout [367]. - Oxypurinol has the potential to benefit approximately 70-75% of allopurinol-intolerant patients, estimated to be between 120,000 to 150,000 patients in the U.S. [367]. - Clinical findings suggest that the proprietary formulation of oxypurinol, XORLOTM, may reduce adverse events and improve tolerability compared to allopurinol [386]. - Over 600 patients have been treated with oxypurinol, showing a reduced rate of adverse events compared to allopurinol, suggesting superior tolerability [395].

Core Viewpoint - XORTX Therapeutics Inc. is advancing its new drug application (NDA) for XORLO™, a proprietary formulation of oxypurinol aimed at treating gout, following guidance from the FDA on key steps necessary for the filing [2][4]. Company Developments - XORTX has received responses from the FDA clarifying the steps needed for the NDA submission for its XRx-026 program targeting gout [2][4]. - The company plans to finalize meeting minutes with the FDA, prepare an Investigational New Drug (IND) application, characterize pharmacokinetics, manufacture commercial supplies, and file the NDA [3][4]. - The NDA for XORLO™ is anticipated to be filed in the first half of 2026, emphasizing the company's commitment to addressing the unmet medical needs of gout patients [4]. Market Context - Approximately 44 million individuals in the US have elevated uric acid levels, with gout affecting about 9.2 million people, indicating a significant market opportunity for gout treatments [5]. - Current treatments include xanthine oxidase inhibitors (XOIs) like allopurinol, which is prescribed to around 3.3 million patients annually in North America, but some patients cannot tolerate it [6]. - XORLO™ aims to fill the gap left by existing treatments, particularly after the decline in the use of Febuxostat due to safety concerns [6].

Core Viewpoint - XORTX Therapeutics Inc. has received notification of a patent grant for "Xanthine Oxidase Inhibitor Formulations" by the European Patent Office, which enhances its intellectual property portfolio and supports its programs for gout and autosomal dominant polycystic kidney disease (ADPKD) [1][2]. Company Overview - XORTX is a late-stage clinical pharmaceutical company focused on developing therapies for gout and progressive kidney disease, with three clinically advanced products: XRx-026 for gout, XRx-008 for ADPKD, and XRx-101 for acute kidney injury [1][6]. Patent Details - The newly granted patent covers formulations using proprietary xanthine oxidase inhibitors (XOIs) aimed at treating health issues related to high uric acid levels, including gout, kidney stones, and cardiovascular diseases [2]. - With this patent, XORTX now holds five granted patents in the US and EU related to uric acid-lowering agents for gout and progressive kidney disease [2]. Market Opportunity - In North America, approximately 3.5 million people suffer from gout due to elevated uric acid levels, with XOIs being the preferred first-line treatment [5]. - Allopurinol is the most commonly prescribed XOI, with around 3 million prescriptions annually, but 3-5% of patients cannot tolerate it, creating a market opportunity for alternative XOIs like XRx-026 [5]. Health Implications of Hyperuricemia - An estimated 14% of the adult population has hyperuricemia, leading to various health issues, including gout, kidney stones, and cardiovascular diseases [3]. - Lowering uric acid levels in gout patients is strongly correlated with improved health outcomes, highlighting the need for effective treatments [3]. Genetic Factors and Precision Medicine - Recent studies suggest a link between genetic factors and the overexpression of xanthine oxidase, advocating for a precision medicine approach in treating conditions associated with hyperuricemia [4].

Core Viewpoint - XORTX Therapeutics Inc. has received notification from Nasdaq regarding non-compliance with the minimum bid price requirement, as its common shares have been below US$1.00 for 30 consecutive business days [1][2]. Group 1: Compliance Status - The notification does not currently impact the Company's listing on the Nasdaq Capital Market, and it has 180 calendar days to regain compliance [2]. - If the bid price closes at or above US$1.00 for at least 10 consecutive business days within this period, Nasdaq will notify the Company of compliance [2]. Group 2: Company Overview - XORTX is a late-stage clinical pharmaceutical company focused on developing therapies for progressive kidney disease and gout, with three advanced products: XRx-026 for gout, XRx-008 for ADPKD, and XRx-101 for acute kidney injury [4]. - The Company is also developing XRx-225, a pre-clinical program for Type 2 diabetic nephropathy, targeting purine metabolism and xanthine oxidase to reduce uric acid production [4].

Core Points - XORTX Therapeutics Inc. has received notification from Nasdaq that it is not in compliance with the minimum bid price requirement, as its common shares have closed below US$1.00 for 30 consecutive business days [1] - The company has 180 calendar days from the notification date to regain compliance, during which its shares will continue to trade on the Nasdaq Capital Market [2] - If the bid price closes at or above US$1.00 for at least 10 consecutive business days, Nasdaq will notify the company of compliance [2] - The notification does not affect the company's listing status on the TSX Venture Exchange [3] - XORTX is evaluating options to resolve the deficiency and regain compliance with Nasdaq Rule 5550(a)(2) [3] Company Overview - XORTX Therapeutics is focused on developing therapies for progressive kidney disease and gout, with three clinically advanced products: XRx-026 for gout, XRx-008 for ADPKD, and XRx-101 for acute kidney injury [4] - The company is also developing XRx-225, a pre-clinical program for Type 2 diabetic nephropathy [4] - XORTX aims to improve the quality of life for individuals with gout and other diseases by targeting purine metabolism and xanthine oxidase to reduce uric acid production [4]

Core Insights - XORTX Therapeutics Inc. is preparing for a Type B meeting with the FDA to discuss the XRx-026 program for gout, aiming to confirm its readiness for a New Drug Application (NDA) submission [1][2] - The XRx-026 program focuses on XORLOTM, a proprietary formulation of oxypurinol, which addresses unmet medical needs in gout treatment [4] - The company anticipates that advancing the XRx-026 program will lead to a revenue-positive state for XORTX [2] Company Overview - XORTX is a late-stage clinical pharmaceutical company focused on innovative therapies for progressive kidney disease and gout [1] - The company has three clinically advanced products: XRx-026 for gout, XRx-008 for ADPKD, and XRx-101 for acute kidney injury [8] Gout and Hyperuricemia Context - Approximately 44 million individuals in the US have elevated uric acid levels, with gout affecting about 9.2 million people [3] - Gout is linked to significant morbidity, including severe pain and reduced quality of life, and is associated with various health conditions such as metabolic syndrome and chronic kidney disease [3] XRx-026 Program Details - The XRx-026 program is developing XORLOTM, which aims to provide an alternative to existing xanthine oxidase inhibitors (XOIs) like Allopurinol and Febuxostat [4] - Allopurinol is commonly prescribed but not tolerated by 3-5% of patients, while Febuxostat faced a decline in use due to safety concerns [4] FDA Meeting Insights - Type B meetings with the FDA are designed to discuss the development status of drug applications and confirm any additional information needed for marketing approval [5]

Core Viewpoint - XORTX Therapeutics Inc. has requested a Type C meeting with the FDA to discuss the XRx-026 program for gout treatment, indicating readiness for a New Drug Application (NDA) submission for its proprietary drug formulation, XORLO [1][2]. Company Overview - XORTX is a late-stage clinical pharmaceutical company focused on innovative therapies for progressive kidney disease and gout, with three clinically advanced products: XRx-026 for gout, XRx-008 for ADPKD, and XRx-101 for acute kidney injury [6]. XRx-026 Program Details - The XRx-026 program is developing XORLO, a proprietary formulation of oxypurinol aimed at treating gout, particularly for patients intolerant to allopurinol [4]. - The program has progressed sufficiently to warrant a review with the FDA, with the meeting expected to occur within 75 days of the request [2]. Gout Prevalence and Impact - Approximately 44 million individuals in the US have elevated uric acid levels, with about 9.2 million suffering from symptomatic gout, which is linked to severe pain and increased healthcare costs [3]. - Gout is associated with serious health conditions, including myocardial infarction and chronic kidney disease, impacting quality of life and economic productivity [3]. Current Treatment Landscape - Oral xanthine oxidase inhibitors (XOIs) are the preferred treatment for gout, with allopurinol being the most commonly prescribed, totaling around 3.3 million prescriptions annually in the US [4]. - Febuxostat, another XOI, had peak sales of approximately US$450 million but faced a decline due to safety concerns, highlighting the need for alternatives like XORLO [4].

Core Viewpoint - XORTX Therapeutics Inc. is actively engaging with the investment community through its participation in the Microcap Conference, where it aims to present its innovative therapies for gout and progressive kidney disease, specifically the XRx-026 and XRx-008 programs [1][2]. Company Overview - XORTX is a late-stage clinical pharmaceutical company focused on developing therapies for progressive kidney disease and gout, with three clinically advanced products: XRx-008 for autosomal dominant polycystic kidney disease (ADPKD), XRx-026 for allopurinol intolerant gout, and XRx-101 for acute kidney injury related to COVID-19 [3]. - The company is dedicated to improving the quality of life for patients with kidney disease and gout by targeting purine metabolism and inhibiting uric acid production [3]. Conference Participation - The Microcap Conference, held from January 28 to 30, 2025, in Atlantic City, NJ, provides XORTX with a platform to update investors on its gout program and ADPKD clinical trial preparations [1]. - The CEO of XORTX, Dr. Allen Davidoff, emphasized the importance of one-on-one meetings with potential investors and the opportunity to present the company's plans for FDA marketing approval [2].

Core Viewpoint - XORTX Therapeutics Inc. has changed its auditor from Smythe LLP to Davidson & Company LLP effective January 16, 2025, with no reservations or reportable events noted during the transition [1][2][3]. Auditor Change - The board of directors accepted the resignation of the former auditor and appointed the successor auditor effective January 16, 2025, to serve until the next annual general meeting of shareholders [2]. - There were no reservations in the former auditor's reports for any financial period, and no reportable events occurred between the company and the former auditor [3]. Compliance and Documentation - The Notice of Change of Auditor and required letters from both auditors have been reviewed by the company's audit committee and board of directors, and filed on the company's SEDAR+ profile [4]. Company Overview - XORTX Therapeutics Inc. is focused on developing innovative therapies for progressive kidney disease and gout, with three clinically advanced products: XRx-008 for ADPKD, XRx-026 for allopurinol intolerant gout, and XRx-101 for acute kidney injury related to COVID-19 [5]. - The company also has a pre-clinical program, XRx-225, targeting Type 2 Diabetic Nephropathy, aiming to improve the quality of life for patients with kidney disease and gout [5].