Business Overview and History Akebia Therapeutics, Inc. (AKBA) is a fully integrated commercial-stage biopharmaceutical company committed to addressing patients' unmet needs in the field of kidney disease. With a diverse portfolio of approved products and a pipeline of promising product candidates, Akebia is poised to play a significant role in the ever-changing landscape of kidney care.
Akebia was incorporated in the state of Delaware in 2007 and became a public company in 2014. The company's purpose is to "better the life of each person impacted by kidney disease," and it has two products approved by the U.S. Food and Drug Administration (FDA) - Vafseo (vadadustat) and Auryxia.
Akebia was founded with the goal of developing novel, proprietary therapeutics based on hypoxia-inducible factor (HIF) biology. HIF is a transcription factor that regulates the body's response to oxygen availability and plays a central role in many disease processes. In 2018, Akebia completed a merger with Keryx Biopharmaceuticals, Inc., which expanded the company's commercial and development portfolio. Through this merger, Akebia gained commercial rights to Auryxia.
The company has faced several challenges over the years. In 2022, Akebia received a complete response letter (CRL) from the FDA regarding its new drug application for vadadustat for the treatment of anemia associated with chronic kidney disease. Following a formal dispute resolution request, Akebia was able to resubmit its application, and the FDA ultimately approved vadadustat, now marketed as Vafseo, in March 2024.
Vafseo, an oral hypoxia-inducible factor prolyl hydroxylase (HIF-PH) inhibitor, was approved by the FDA in March 2024 for the treatment of anemia due to chronic kidney disease (CKD) in adults who have been receiving dialysis for at least three months. Akebia is actively engaged in the launch of Vafseo in the U.S. market, with expected product availability in January 2025. Additionally, Vafseo is approved for the treatment of symptomatic anemia associated with CKD in adult patients on chronic maintenance dialysis in the European Economic Area, United Kingdom, Switzerland, Australia, South Korea, and Taiwan, and is being marketed and sold by Akebia's collaboration partners in those territories.
Auryxia, Akebia's other FDA-approved product, is marketed in the U.S. for two indications: the control of serum phosphorus levels in adult patients with dialysis-dependent chronic kidney disease, and the treatment of iron deficiency anemia in adult patients with non-dialysis-dependent chronic kidney disease. Auryxia will lose exclusivity in the U.S. in March 2025.
In addition to its commercial products, Akebia has a pipeline of product candidates, including AKB-9090 and AKB-10108, which are being evaluated for use in acute care settings, potentially for acute kidney injury or acute respiratory distress syndrome, and retinopathy of prematurity in neonates, respectively.
Financial Highlights Akebia's financial performance has been mixed in recent years. In 2023, the company reported total revenue of $194.62 million, down from $292.48 million in 2022, and a net loss of $51.93 million, compared to a net loss of $94.23 million in the prior year. The decrease in revenue was primarily due to a reduction in sales volume of Auryxia, partially offset by price increases and the execution of the company's contracting strategy with third-party payers.
For the most recent quarter (Q2 2024), Akebia reported revenue of $43.65 million, representing a 22.6% decrease compared to Q2 2023. This decline was primarily attributed to a reduction in Auryxia sales volume, partially offset by price increases and improved contracting with third-party payors. Net income for Q2 2024 improved by 23.2% compared to Q2 2023, largely driven by lower R&D expenses, resulting in a net loss of $8.58 million.
Operating cash flow (OCF) for Q2 2024 was negative $10.07 million, while free cash flow (FCF) was negative $10.10 million. These figures indicate that Akebia continues to face challenges in generating positive cash flows from its operations.
Liquidity As of June 30, 2024, Akebia had cash and cash equivalents of $39.50 million. The company's debt-to-equity ratio stood at -2.91, reflecting its negative shareholder equity position. Akebia has access to a $55 million term loan facility with Kreos Capital, of which $45 million has been drawn as of June 30, 2024.
The company's current ratio of 1.04 and quick ratio of 0.82 indicate a tight liquidity position. Akebia believes its current cash resources and the cash it expects to generate from product, royalty, supply, and license revenues will be sufficient to fund its current operating plan for at least 24 months. However, the company has noted that if its operating performance deteriorates significantly from the levels expected in its operating plan, it could affect its liquidity and ability to continue as a going concern.
Risks and Challenges Akebia faces a variety of risks and challenges in its business, including: - Continued losses and the need for additional capital: Akebia has incurred significant losses since its inception and may continue to do so, which could impact its ability to fund its operations. - Commercialization of Vafseo: The successful commercialization of Vafseo in the U.S. and other markets is critical to the company's future success, and any delays or difficulties in this process could have a material adverse effect on Akebia's business. - Competition and market dynamics: Akebia operates in a competitive environment, and the company's products and product candidates face competition from both existing and potential future treatments, which could impact their commercial success. - Regulatory and legal risks: Akebia is subject to extensive regulatory requirements and legal risks, including the potential for product liability lawsuits, which could have a material adverse impact on the company's business. - Reliance on third-party manufacturers and suppliers: Akebia relies on third-party manufacturers and suppliers for the production and distribution of its products, and any disruptions or issues with these partners could affect the company's ability to supply its products. - Loss of exclusivity for Auryxia: With Auryxia set to lose exclusivity in the U.S. in March 2025, Akebia faces the challenge of managing the transition as the product faces potential generic competition.
Recent Developments and Outlook In July 2024, Akebia entered into a Termination and Settlement Agreement with CSL Vifor, terminating the company's exclusive license agreement for the commercialization of Vafseo in the U.S. Under the terms of the agreement, Akebia has regained the rights to sell Vafseo to certain dialysis organizations in the U.S. and will make tiered royalty payments to CSL Vifor based on its net sales of Vafseo in the U.S.
Looking ahead, Akebia's priorities include the successful commercialization of Vafseo in the U.S. and potential label expansion opportunities for the product, as well as the continued development and advancement of its pipeline assets. The company is also focused on managing its expenses and maintaining its financial flexibility to support its strategic initiatives.
Akebia is evaluating several lifecycle management and label expansion opportunities for Vafseo, including potential alternative dosing regimens and label expansion for the treatment of adult patients with non-dialysis-dependent chronic kidney disease (NDD-CKD).
Product Segments and Performance Akebia's business is primarily focused on two main product segments:
1. Commercial Products: - Auryxia generated net product revenue of $41.21 million and $72.22 million for the three and six months ended June 30, 2024, respectively, compared to $42.24 million and $76.95 million for the same periods in 2023. The decrease in net product revenue was primarily due to a reduction in volume, partially offset by price increases and execution of Akebia's contracting strategy with third-party payors. - Vafseo, approved by the FDA in March 2024, is expected to be available in the U.S. market in January 2025. Akebia is actively engaged in launch initiatives and believes it has the right team and organizational experience to successfully commercialize Vafseo.
2. Collaboration, License and Other Revenue: - This segment includes revenue from partners such as MTPC (marketing Vafseo in Japan), Medice (exclusive license for Vafseo in Europe and other regions), and JT and Torii (sublicense for ferric citrate in Japan). - Collaboration, license and other revenue was $2.44 million and $4.04 million for the three and six months ended June 30, 2024, respectively, compared to $14.13 million and $19.43 million for the same periods in 2023. The decrease was primarily due to a one-time $10 million upfront payment recognized in connection with the Medice License Agreement during the prior year period.
Geographic Markets Currently, Akebia's commercial products, Auryxia and Vafseo, are only sold in the U.S. market. The company does not have any significant international sales at this time, although it has partnerships for marketing its products in various international territories.
Conclusion Akebia Therapeutics is navigating the complex and evolving landscape of kidney care, with a portfolio of approved products and a pipeline of promising product candidates. While the company has faced challenges in recent years, including the need for additional capital and the successful commercialization of its products, Akebia remains committed to addressing the unmet needs of patients impacted by kidney disease. The upcoming launch of Vafseo in the U.S. and the management of Auryxia's transition as it faces potential generic competition will be critical factors in the company's near-term performance. As Akebia continues to execute on its strategic priorities, it will be essential for investors to monitor its financial performance, regulatory milestones, and the competitive dynamics within the kidney care market.