On November 8, 2018 Akebia Therapeutics, Inc. (Nasdaq: AKBA), a biopharmaceutical company focused on delivering innovative therapies to patients with kidney disease through the biology of hypoxia-inducible factor (HIF), reported financial results for the third quarter ended September 30, 2018 (Press release, Akebia, NOV 8, 2018, View Source [SID1234531054]).

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"In the third quarter, we continued to drive our vadadustat Phase 3 development program, while working diligently to close our proposed merger transaction with Keryx Biopharmaceuticals by the end of 2018. The combination is expected to create a fully-integrated kidney disease therapeutics company, with a strengthened financial profile, positioned to deliver substantial long-term value to shareholders," said John P. Butler, President and Chief Executive Officer of Akebia Therapeutics. "In addition, we look forward to the Phase 3 clinical trial readouts in Japan from our collaboration partner, Mitsubishi Tanabe Pharma Corporation, expected next year. This will be the first time Phase 3 data has been reported for our product candidate, vadadustat, which is an important milestone."

Third Quarter 2018 and Recent Corporate Highlights

Merger Integration Planning:

Following the definitive merger agreement with Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX) announced June 28, 2018, Akebia has been actively engaged in integration planning and expects to close the transaction by the end of 2018;
The combination offers potential operating and product portfolio synergies and the opportunity to create significant value and accelerate the growth potential beyond what either company would achieve separately;
The combined company will have an expanded and highly complementary nephrology portfolio, with Auryxia (ferric citrate), a U.S. Food and Drug Administration (FDA)-approved product in two indications with significant growth opportunity, and vadadustat, an investigational late-stage hypoxia-inducible factor prolyl hydroxylase inhibitor, which has the potential to provide a new oral standard of care to patients with anemia due to chronic kidney disease (CKD);
The combined company will have an established renal development, manufacturing and commercial organization, positioning it as a partner of choice for the renal community and for companies developing renal products; and
The combined company plans to leverage its leadership’s extensive expertise in the commercial renal market with the goal of maximizing sales of Auryxia while driving launch momentum for vadadustat in the United States, subject to FDA approval.
Clinical Development:

Akebia continued to enroll subjects in its Phase 3 INNO2VATE program, with top-line results expected in the first quarter of 2020, subject to the accrual of major adverse cardiovascular events (MACE). U.S. enrollment in the Phase 3 INNO2VATE Conversion study completed last quarter, as announced in Akebia’s second quarter 2018 earnings press release;
Akebia continued to enroll subjects in its Phase 3 PRO2TECT program, with top-line results anticipated in mid-2020, subject to the accrual of MACE; and
Akebia received a recommendation from the Independent Data Monitoring Committee, which held another meeting in the quarter, for Akebia’s global Phase 3 PRO2TECT and INNO2VATE programs to continue without modification.
Other Business:

This past quarter, Akebia appointed Cynthia Smith to its Board of Directors. With more than 20 years of broad leadership experience within the healthcare industry, including serving as a Chief Commercial Officer, Cynthia brings expertise that is particularly relevant to Akebia as it prepares for the commercialization of vadadustat, subject to regulatory approval, and works to maximize the value of Auryxia, subject to the consummation of Akebia’s merger with Keryx Biopharmaceuticals.
Financial Results

Akebia reported a net loss of $26.0 million, or ($0.46) per share, for the third quarter of 2018 as compared to a net loss for the third quarter of 2017 of $23.1 million or ($0.49) per share.

Collaboration revenue was $53.2 million for the third quarter of 2018 compared to $41.3 million for the third quarter of 2017. Collaboration revenue recognized in the third quarter of 2018 related primarily to revenue recognized under both the U.S. collaboration agreement with Otsuka Pharmaceutical Co. Ltd., or Otsuka, and the collaboration agreement with Otsuka related to Europe, China and certain other regions, or the Otsuka International Agreement. Collaboration revenue recognized in the third quarter of 2017 also related to the Otsuka U.S. Agreement and the Otsuka International Agreement, which were consummated in December 2016 and April 2017, respectively.

Research and development expenses were $70.6 million for the third quarter of 2018 compared to $58.7 million for the third quarter of 2017. The increase was primarily attributable to external costs related to the global PRO2TECT and INNO2VATE Phase 3 programs. Research and development expenses were further increased by headcount and compensation-related costs.

General and administrative expenses were $10.4 million for the third quarter of 2018 compared to $6.7 million for the third quarter of 2017. The increase was primarily attributable to an increase in legal and other professional fees related to our proposed merger with Keryx Biopharmaceuticals, and an increase in costs to support the company’s research and development programs, including headcount and compensation-related costs.

Akebia ended the third quarter of 2018 with cash, cash equivalents and available for sale securities of $390.1 million. The company also generally receives cost-share funding from its collaboration agreements with Otsuka on a prepaid quarterly basis. Akebia expects its existing cash resources, including the prepaid quarterly committed cost-share funding from its collaborators, to fund its current operating plan through the first quarter of 2020.