On November 12, 2019 Akebia Therapeutics, Inc. (Nasdaq: AKBA), a biopharmaceutical company focused on the development and commercialization of therapeutics for people living with kidney disease, reported financial results for the third quarter ended September 30, 2019 (Press release, Akebia, NOV 12, 2019, View Source [SID1234550994]). The Company will host a conference call today, Tuesday, November 12, 2019, at 9:00 a.m. Eastern Time to discuss its third quarter 2019 financial results and recent business highlights.

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Akebia also announced that it has entered into a $100 million non-dilutive, definitive term loan agreement with funds managed by Pharmakon Advisors LP, the investment manager of the BioPharma Credit funds. The loans provide Akebia with up to $100 million of borrowing capacity available in two tranches. Subject to the satisfaction of customary conditions, Akebia expects to draw $80 million at an initial closing later this month, and an additional tranche of $20 million is available for draw at Akebia’s option until December 31, 2020. Additional information on the loan agreement will be included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019 that is expected to be filed with the U.S. Securities and Exchange Commission today, November 12, 2019.

"Akebia continues to make great progress advancing our strategy. We achieved a primary objective of the Company by strengthening our balance sheet with $80 to $100 million non-dilutive, tranched term loans, on very competitive terms, to further support our clinical development program for vadadustat, our investigational oral hypoxia-inducible factor prolyl hydroxylase inhibitor (HIF-PHI) for the treatment of anemia due to chronic kidney disease (CKD), and other strategic goals. Importantly, we believe these loans, the first tranche of which is expected to close later this month, in combination with our other cash resources, are expected to extend our cash runway into 2021, well past our expected top-line data readouts of our global Phase 3 clinical studies of vadadustat. Auryxia product revenue allows us to service the debt," stated John P. Butler, Chief Executive Officer of Akebia. "As we believe we are now within two quarters of our first readout of our global Phase 3 studies of vadadustat with top-line data of INNO2VATE on track for Q2’FY20 and PRO2TECT for mid-2020, subject to the accrual of major adverse cardiovascular events (MACE), we’re working to sharpen the timelines for completion and keying in on NDA and MAA related activities and commercial plans for vadadustat, upon approval."

Butler continued, "We have a tremendous amount of confidence in the program that we’ve designed for vadadustat and believe we are positioned well for clinical, regulatory and commercial success. We expect vadadustat to be the first drug of the HIF class to deliver clear data that directly compares its outcomes to the current standard of care in both dialysis and non-dialysis patients for the treatment of anemia due to CKD. We believe these data will be highly informative for physicians, patients and payers as they make important decisions about patient care, and a key consideration when differentiating between HIFs in the class."

Recent Highlights

Auryxia (ferric citrate) net product revenue increased 13 percent year-over-year to $30.0 million for the third quarter of 2019. Total Auryxia prescriptions increased 15.5 percent year-over-year to 51,700 in the third quarter of 2019.
In November, Mitsubishi Tanabe Pharma Corporation (MTPC), Akebia’s development and commercialization collaboration partner in Japan for vadadustat, presented positive 24-week and 52-week data from two Phase 3 active-controlled pivotal studies evaluating the efficacy and safety of vadadustat in Japanese patients with anemia due to CKD, at the American Society of Nephrology (ASN) Kidney Week 2019. Each study met its primary endpoint based on mean hemoglobin level at week 20 and 24, and showed vadadustat’s effect on hemoglobin was sustained through to 52 weeks in each study. (See recent related press release here.) In July, MTPC submitted a Japanese New Drug Application (JNDA) to the Ministry of Health, Labor and Welfare in Japan for marketing approval of vadadustat as a treatment for anemia due to CKD. The JNDA is the first regulatory submission for marketing approval of vadadustat and, if approved, is expected to lead to the first launch of vadadustat worldwide, next year.
Nine abstracts, including several associated with vadadustat and Auryxia, Akebia’s FDA-approved drug, were presented at ASN in November.
In October, the Independent Data Monitoring Committee reviewed unblinded safety and efficacy data from Akebia’s global Phase 3 studies of vadadustat, as planned, and recommended continuation of the studies without modifications.
In October, Akebia filed a complaint in federal district court against the Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health and Human Services (HHS). The lawsuit challenges a September 2018 decision by CMS that rescinded Medicare Part D coverage of Auryxia, when used for the treatment of iron deficiency anemia (IDA) in adult patients with CKD not on dialysis. The legal action also seeks to reverse a related decision by CMS that imposed a prior authorization requirement for Auryxia when used for the control of serum phosphorus levels in adult patients with CKD on dialysis.
In April and August, Akebia completed enrollment in its global Phase 3 program, INNO2VATE and PRO2TECT, respectively, evaluating the safety and efficacy of vadadustat in dialysis-dependent and non-dialysis dependent CKD subjects with anemia due to CKD. The Company continues to expect to report top-line data from the INNO2VATE and PRO2TECT studies in Q2’FY20 and mid-2020, respectively, subject to the accrual of MACE.
Financial Results

Total revenue for the third quarter of 2019 was $92.0 million, compared to $53.2 million in the pre-merger third quarter of 2018.

Auryxia net product revenue for the third quarter of 2019 was $30.0 million, compared to $26.6 million, as reported by Keryx Biopharmaceuticals, Inc. (Keryx) prior to its merger with the Company, during the same period in 2018. This represents a 13 percent increase in net product revenue from the third quarter of 2018.

Collaboration and license revenue for the third quarter of 2019 was $62.0 million, compared with $53.2 million in the third quarter of 2018. The increase was primarily due to increased collaboration revenue of $6.8 million from Otsuka Pharmaceutical Co. Ltd (Otsuka). In accordance with the Company’s collaboration agreements, Otsuka began funding 80 percent of the development costs for vadadustat in the second quarter of 2019.

Cost of goods sold was $38.3 million for the third quarter of 2019, consisting of $11.2 million of costs associated with the manufacture of Auryxia and non-cash charges of $27.1 million related to the application of purchase accounting as a result of the merger with Keryx. These non-cash, merger-related charges include a $18.0 million inventory step-up charge and $9.1 million of amortization of intangibles.

Research and development expenses were $74.5 million for the third quarter of 2019 compared to $70.6 million for the third quarter of 2018. The increase was primarily attributable to an increase in headcount and other costs to support its research and development programs and clinical and preclinical activities. These increases were partially offset by a decrease in external costs related to PRO2TECT and INNO2VATE Phase 3 studies as they advance toward readout.

Selling, general and administrative expenses were $34.2 million for the third quarter of 2019 compared to $10.4 million for the third quarter of 2018. The increase was primarily attributable to commercialization costs associated with Auryxia, as there were no comparable commercialization costs in the third quarter of 2018.

The Company reported a net loss for the third quarter of 2019 of $54.6 million, or ($0.46) per share, as compared to a net loss of $26.0 million, or ($0.46) per share, for the third quarter of 2018. The Company’s net loss for the third quarter of 2019 includes the impact of non-cash charges of $27.1 million related to the application of purchase accounting as a result of the merger with Keryx, offset by an income tax benefit of $1.3 million.

The Company ended the quarter with cash, cash equivalents and available-for-sale securities of $145.6 million. "We are pleased to have further strengthened our balance sheet and extended our operating cash runway with our very recent non-dilutive, tranched term loans for up to $100 million, with the first $80 million tranche expected to close later this month. We expect these loans, coupled with the committed research and development funding from our collaborators and the receipt of a regulatory milestone from MTPC, assuming approval of vadadustat in Japan, to provide us with the cash resources to fund our current operating plan into Q1 of 2021," stated Jason A. Amello, Chief Financial Officer of Akebia.

Conference Call

Akebia will host a conference call today, Tuesday, November 12, 2019, at 9:00 a.m. Eastern Time to discuss its third quarter 2019 financial results and recent business updates. To listen to the conference call, please dial (877) 458-0977 (domestic) or (484) 653-6724 (international) using conference ID number 9996464. The call will also be webcast LIVE and can be accessed via the Investors section of the Company’s website at View Source

A replay of the conference call will be available two hours after the completion of the call through November 18, 2019. To access the replay, dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and reference conference ID number 9996464. An online archive of the conference call can be accessed via the Investors section of the Company’s website at View Source