Dr. Allen Davidoff reports

XORTX ANNOUNCES CLOSING OF ACQUISITION OF VECTUS KIDNEY ANTI-FIBROTIC ASSET

XORTX Therapeutics Inc. has closed the acquisition of the Vectus kidney anti-fibrotic asset. The company announced that it entered a binding term sheet on Oct. 17, 2025, to acquire a renal anti-fibrotic therapeutic program from Vectus Biosystems Ltd., an Australian Securities Exchange-listed company, and provided timing updates on Dec. 31, 2025, and Feb. 4, 2026.

The program includes a novel new chemical entity, VB4-P5, along with its associated intellectual property, regulatory documentation and manufacturing data. The program is currently at the pre-IND (investigational new drug) stage of development and targets both rare and prevalent forms of kidney disease -- areas with substantial unmet medical need. Assets included with the acquisition are the patent family specifically related to the VB4-P5 compound and its use to treat kidney fibrosis, as well as the data generated by Vectus from its work on the VB4-P5 small molecule and related assets.

As consideration for the acquisition, XORTX has issued 154,544 common shares at a deemed issue price of $3.5432 (U.S.) ($4.9668 (Canadian)) and 692,150 prefinanced warrants at a deemed issue price of $3.5431 (U.S.) ($4.9667 (Canadian)) exercisable at 0.01 U.S. cent, representing in the aggregate an acquisition price of $3.0-million (U.S.). The prefinanced warrants contain conditions limiting Vectus from exercising same if such exercise would result in Vectus's common share ownership being greater than 9.99 per cent of the issued and outstanding common shares of XORTX. The prefinanced warrants expire April 13, 2031. The common shares are issued in reliance on Section 4 of Alberta Securities Commission Rule 72-501, Distributions to Purchasers Outside Alberta, and are therefore not subject to a hold period from the date of issue. The TSX Venture Exchange has conditionally approved the listing of all common shares issuable under the acquisition.

Dr. Allen Davidoff, chief executive officer of XORTX, stated: "We are pleased to have finalized the acquisition of the VB4-P5 program for kidney disease. This program is directly aligned with our strategic focus on developing innovative therapies to treat individuals with progressive kidney disease and broadens our pipeline with a new technological direction. We believe this novel agent has the potential to be a new treatment for mid-late-stage chronic kidney disease, slow kidney disease progression and accompanying fibrosis."

About kidney disease and fibrosis

Chronic kidney disease (CKD) affects an estimated 14 per cent of adults globally, including approximately 35 million to 37 million individuals in the United States alone, and is currently a multibillion-dollar market. An estimated 8 per cent of the United States population is considered to have moderate to severe chronic kidney disease -- approximately 25 million individuals. The addressable market for this kidney disease treatment is estimated to exceed 10 million individuals.

Kidney fibrosis is a hallmark of CKD progression. It is characterized by the excessive accumulation of extracellular matrix that follows renal injury. Untreated, it will ultimately lead to renal dysfunction, and high morbidity and mortality. Rare kidney diseases such as autosomal dominant polycystic kidney disease (ADPKD) and lupus nephritis also produce kidney fibrosis, contributing to the deterioration of kidney and cardiovascular function in these patients. Current treatments for kidney fibrosis focus primarily on blood pressure control and include dietary interventions. No currently approved therapies specifically target or reverse kidney fibrosis.

About the VB4-P5 program

Early preclinical data from the VB4-P5 program demonstrate the potential of this potent small molecule to inhibit and possibly reverse kidney fibrosis. Patent protection for VB4-P5 includes composition-of-matter and method-of-use claims across more than 30 global jurisdictions, positioning the program for broad development and commercialization opportunities.

About XORTX Therapeutics Inc.

XORTX is a pharmaceutical company with three clinically advanced products in development: (1) the company's lead program XRx-026 program for the treatment of gout; (2) XRx-008 program for ADPKD; and (3) XRx-101 for acute kidney and other acute organ injury associated with respiratory virus infections. In addition, the company is developing XRx-225, a preclinical stage program for type 2 diabetic nephropathy. XORTX is working to advance products that target aberrant purine metabolism and xanthine oxidase to decrease or inhibit production of uric acid. XORTX is dedicated to developing medications that improve the quality of life and health of individuals with gout and other important diseases.

We seek Safe Harbor.