Akebia Therapeutics Q1 2025 Earnings Report

Akebia Therapeutics EPS Results

• Actual EPS: $0.03
• Consensus EPS: -$0.03
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: N/A

Akebia Therapeutics Revenue Results

• Actual Revenue: $57.34 million
• Expected Revenue: $44.88 million
• Beat/Miss: Beat by +$12.45 million
• YoY Revenue Growth: N/A

Akebia Therapeutics Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 8:00AM ET

Akebia Therapeutics (NASDAQ:AKBA), a biopharmaceutical company, focuses on the development and commercialization of therapeutics for patients with kidney diseases. The company's lead product investigational product candidate is Vafseo (vadadustat), an oral hypoxia-inducible factor prolyl hydroxylase, which is in Phase III development for the treatment of anemia due to chronic kidney disease (CKD) in dialysis-dependent and non-dialysis dependent patients. It offers Auryxia, a ferric citrate that is used to control the serum phosphorus levels in adult patients with DD-CKD on dialysis; and the treatment of iron deficiency anemia in adult patients with CKD not on dialysis. The company's product pipeline includes AKB-9090, a drug targeting critical-care indications; and AKB-10108, a drug targeting conditions related to premature birth. It has collaboration agreements with Mitsubishi Tanabe Pharma Corporation for the development and commercialization of vadadustat in Japan and other Asian countries, as well as research and license agreement with Janssen Pharmaceutica NV for the development and commercialization of hypoxia-inducible factor prolyl hydroxylase targeted compounds worldwide. Akebia Therapeutics, Inc. was incorporated in 2007 and is headquartered in Cambridge, Massachusetts.

Akebia Therapeutics Q1 2025 Earnings Call Transcript

Key Takeaways

• Ake­bia generated $12 million in US Vafcio net product revenues in Q1, exceeding guidance and reflecting strong early demand, expanding prescriber base, growing refills, and dose titration.
• Commercial contracts cover nearly 100% of US dialysis patients, with the five largest providers ordering Vafcio; one major provider plans a large operational pilot in Q3 and full protocol rollout could more than double patient access.
• The VOICE study with US Renal Care is ~75% enrolled toward its 2,200‐patient goal and may generate critical data on hospitalization benefits, while a Phase III VALOR trial in non‐dialysis CKD is on track for H2 2025 initiation.
• Total revenues rose to $57.3 million in Q1 vs $32.6 million y/y, driven by net product revenues of $55.8 million (Auryxia $43.8 million, Vafcio $12 million), reducing COGS and yielding $6.1 million net income vs an $18 million loss in Q1 2024.
• Ake­bia ended Q1 with $113.4 million in cash, bolstered by $46 million net proceeds from a March offering, and believes it is financed to profitability while advancing Vafcio label expansion and multiple HIF-PH inhibitor candidates.

Presentation

[Operator]

and thank you for standing by. Welcome to the Acaeus First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

[Operator]

I would now like to hand the conference over to your first speaker for today, Ms. Mercedes Carrasco, Senior Director of Investor Relations. Please go ahead.

[Mercedes Carrasco, Senior Director of Investor & Corporate Communications at Akebia Therapeutics]

Thank you, and welcome to Akebia's First Quarter twenty twenty five Financial Results and Business Updates Conference Call. Please note that a press release was issued earlier today, Thursday, May 8, detailing our first quarter twenty twenty five financial results, and that release is available on the Investors section of our website. For your convenience, a replay of today's call will also be available on our website after we conclude. Joining me for today's call, we have John Butler, Chief Executive Officer Nicholas Grund, Chief Commercial Officer and Eric Ostrovsky, Chief Financial and Chief Business Officer. I'd like to remind everyone that this call includes forward looking statements.

[Mercedes Carrasco, Senior Director of Investor & Corporate Communications at Akebia Therapeutics]

Each forward looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Additional information describing these risks are included in the financial results press release that we issued on May 8, as well as in the Risk Factors and Management Discussion and Analysis section of our most annual report and quarterly reports filed with the SEC. With that, I'd like to introduce our CEO, John Butler.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Thanks, Mercedes, and thanks to everyone for joining us this morning. Well, during our last call, we shared initial progress on our Vafcio vadadustat U. Product launch, and I'm extremely pleased to report we continued our strong performance. We delivered U. S.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Net product revenues of $12,000,000 versus our guidance of 10,000,000 to $11,000,000 in the first quarter. I believe our strong early performance is a reflection of nephrologists' desire for a new treatment option to treat anemia in CKD patients on dialysis. Though I continue to express caution that we're in the early stages of product introduction, it is one of the strongest launches I've ever seen in the dialysis market. I want to acknowledge the excellent job our commercial and medical affairs teams are doing, educating dialysis providers, prescribers, anemia managers, and other members of the patient care team about Wrapsio. The complexity of selling a product in the dialysis market should never be underestimated, but our strategy to build prescriber demand and quickly transition patients onto VAPSIO is playing out as planned.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Importantly, we're also encouraged to see that patients are staying on therapy as evidenced by the growing number of refills being written. And as expected, we're also seeing the utilization of higher doses as patients' doses are titrated to achieve and maintain appropriate hemoglobin levels. As we've said in the past, we have commercial contracts in place with dialysis organizations covering nearly one hundred percent of dialysis patients. The top five dialysis organizations have now ordered Vafsio. However, nearly all the revenues still coming from the small to mid sized dialysis organizations, who treat approximately 150,000 patients collectively.

[John Butler, CEO, President & Director at Akebia Therapeutics]

One of the large dialysis providers is planning a large pilot to operationalize its protocol. We expect that pilot to begin in the third quarter. The other large provider is earlier in their process, but I'm encouraged that they're making the product available on an exception basis for patients. Given that each LDO treats over 200,000 patients, bringing one on board with a broad protocol will more than double the number of patients with access to Vaseo. Now shifting gears, the VOICE study in collaboration with US Renal Care continues to march towards full enrollment and now has about seventy five percent of patients enrolled.

[John Butler, CEO, President & Director at Akebia Therapeutics]

As you recall, the target enrollment is approximately 2,200 subjects. In just five months of enrollment, this is tremendous progress. We believe VOICE could generate data on the benefits associated with Vafsio treatment, including potential improvements in hospitalization, which is critical information for prescribers and dialysis organizations. We also continue to pursue an approval of Vafsio in a non dialysis patient population and remain on track with our goal to initiate our Phase III VALOR trial in NDD in the second half of twenty twenty five. We're planning to meet with the FDA to further discuss the VALOR trial, which will study the use of vadadustat in treating anemia in CKD patients who are not on dialysis.

[John Butler, CEO, President & Director at Akebia Therapeutics]

We'll continue to update you on our progress as appropriate. While the Vacio launch and initiating VALOR remain our top priorities, we'll also update you throughout 2025 about our plans to advance our pipeline of HIF PH inhibitors and other assets. We are working towards having multiple product candidates enter the clinic this year. Akebia is in an incredibly strong position, and the team has worked very hard to get us here. Now first, Nick is going to give you a detailed view of our launch progress, and then Eric will talk to you about our strong first quarter results and enhanced financial position.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Now let me turn it over to Nick to give you more color on the VAPSCO launch.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Thanks, John. Good morning, folks. I am also pleased with the strength of the VAPSCO launch and the sales achieved through the first quarter. As we have discussed previously, during the launch, we are focusing on breadth, the number of physicians prescribing and depth, the amount physicians are prescribing. On those efforts, we see multiple indicators of strong demand from the field.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

First, we ended the quarter with more than six forty prescribers, which represent a nearly 25% increase compared to the February when we last updated you. We are adding to the breadth of prescribers from various dialysis organizations, though still most are ordering for patients at USRC. While prescribers at other dialysis organizations are writing, USRC makes up the vast majority of prescriptions. In order to continue to increase breadth, we will not only need to continue to grow within our current customers, but we must also continue to expand into new small to mid sized dialysis organizations, many of which have protocols in place or have recently operationalized the protocols. John noted that we have now generated sales from the top five dialysis organizations who treat approximately eighty five percent of patients.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

The orders from the top two dialysis organizations were to address patients with medical exceptions. We continue to work with large dialysis organizations and expect one of them to operationalize Vascio in the third quarter of this year. This will allow us to continue to grow our breadth of prescribers substantially. Second, depth of prescribing is tracked by looking at prescriptions per provider. Prescriptions per provider have grown to approximately 12 at the March from nearly eight at the February.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

The increase speaks to our focus on depth that I described during our last call. Our team has worked diligently to help prescribers identify appropriate patients and work through the ordering process. Though there is a broad range of utilization within the prescribers, we believe for some physicians, it reflects a shift from initial trial to sustained use across a broader number of patients. Once a patient starts therapy, it's important for them to maintain on therapy. We measure this through the refill rate.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Refills are coming in as expected. About one third of all prescriptions written in quarter one were refills. Notably, the refill data demonstrate an increase in dose as prescribers titrate towards levels we observed in our clinical trial. Lastly, we are closely monitoring purchasing patterns. At the end of the quarter, we have seen channel stocking at about four weeks of inventory, which is about one week higher than earlier in the quarter.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

As we move further through the launch, we should expect inventory fluctuations as we bring on more customers, and we believe inventory will settle between two to four weeks on hand. For clarity, we estimate Vazio Q1 sales were composed of about two thirds demand and one third inventory. Anecdotally, many of our key account managers have commented on the positive reception among prescribers. Though just a small sample size, are hearing that physicians and anemia managers are commenting on hemoglobin stability, ease of dose and titration, minimal dose adjustments, and efficacy in ESA hyporesponders. We are hopeful that this is an early sign that Dialysis Clinic staff will be able to maintain a patient's hemoglobin within the target range and be able to focus on other aspects of a patient's care.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

We have also heard the disappointment and importantly willingness to advocate from physicians affiliated with dialysis organizations that have yet to make Valsio available for prescribing through a broad protocol. Physician advocacy is important as we continue to work closely with dialysis organizations to operationalize protocols. Reimbursement trends remain encouraging. As we previously discussed, we have been initially focused on the access for Medicare fee for service patients within the TDAPA reimbursement system. We also indicated that we expected Medicare Advantage coverage where dialysis organizations had contracted with Medicare Advantage plans for a TDAPA like or innovation payment.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

We continue to see reimbursement outside of Medicare fee for service. We believe that this is a signal that even early in the launch prescribers want to use Vafcio for patients regardless of the health plan the patient is on, and that some Medicare Advantage plans are also ready to cover Vafcio. The launch is proceeding as we planned, demand continues to grow, and we are establishing a strong foundation for Vafcio. Our team is highly focused on continuing to increase breadth and depth of prescribing at current customers, unlocking new customers and supporting the largest dialysis organizations in protocol activation. Let me now turn it over to Eric.

[Erik Ostrowski, SVP, CFO & Chief Business Officer at Akebia Therapeutics]

Thanks, Nick. As mentioned, we're very pleased with the initial quarter of Avastia sales, which along with solid Q1 Auryxia sales performance drove strong Q1 results. I will now provide an overview of those results. Total revenues, which are comprised primarily of net product revenues and also include licensing collaboration revenues, increased to $57,300,000 in q one of this year as compared to $32,600,000 in q one of last year. Of these amounts, net product revenues increased to $55,800,000 in q one of this year as compared to $31,000,000 in q one of last year, driven by the introduction of Zafia this quarter, which generated $12,000,000 in net revenues, as well as by an increase in Auryxia net product revenues, which were $43,800,000 in q one of this year as compared to $31,000,000 in q one of last year.

[Erik Ostrowski, SVP, CFO & Chief Business Officer at Akebia Therapeutics]

As a reminder, Auryxia lost IP exclusivity in March and an authorized generic for Auryxia has now entered the market. So no other generics have been approved nor entered the market at this time. We are pleased with this quarter's strong Auryxia results. Though caution, future Auryxia sales levels are challenging to predict due to the uncertainty around the timing of potential additional generic competition. Cost of goods sold of $7,600,000 in q one of this year was lower as compared to $11,600,000 in q one of last year, even with higher sales levels in this year's quarter.

[Erik Ostrowski, SVP, CFO & Chief Business Officer at Akebia Therapeutics]

A driver of this lower level of cause is that we were that we are no longer recording a $9,000,000 quarterly non cash amortization charge related to the acquired developed product rights for Auryxia, which was fully amortized as of the end of last year. Of note, Vaseo sales were derived from prelaunch inventory, which does not include the full cost of manufacturing, as a portion of those inventory related costs were previously expensed prior to Vaseo's FDA approval. Also during q one of last year, we realized a $3,700,000 benefit due to our ability to sell inventory previously written down as excess inventory. On the topic of inventory as related to tariffs, I want to highlight that we have at least twelve months of Vaseo inventory on hand in The US and do not expect any meaningful tariff related impact on Vaseo or Auryxia at this time. We will continue to monitor developments in this area and work to be ready to react to potential scenarios that could play out.

[Erik Ostrowski, SVP, CFO & Chief Business Officer at Akebia Therapeutics]

R and D expenses of $9,800,000 and SG and A expenses of $25,700,000 in q one of this year were essentially flat as compared to q one of last year. Turning to the bottom line, we generated net income of $6,100,000 in q one of this year as compared to a net loss of $18,000,000 in q one of last year. This quarter's net income was driven by the increase in net product revenues, which was partially offset by $5,400,000 in interest expense related to the settlement royalty liability in connection with the July '4 termination and settlement agreement. We ended q one with a hundred and $13,400,000 in cash and cash equivalents. During the quarter, we bolstered our cash position via an underwritten public offering completed in March, which raised over $46,000,000 in net proceeds, and importantly, served to expand institutional investor support of Akebia.

[Erik Ostrowski, SVP, CFO & Chief Business Officer at Akebia Therapeutics]

We believe we are financed to achieve profitability based on our current operating plan, which includes pursuing label expansion for Vapcio and advancing our other existing programs. In closing, we exited q one with strong initial VAPSSA launch, solid financial position, and an overall positive business momentum. That said, our work is not done, and we will continue to diligently work to execute on our business plan. And with that, we welcome questions.

[Operator]

Thank you. At this time, we will conduct the question and answer session. Your first question comes from the line of Roana Ruiz from Leerink Partners. Your line is now open.

[Roanna Ruiz, Senior Managing Director, Biotechnology Analyst at Leerink Partners]

Hey, morning everyone. So a couple for me. For Vafcio, could you update us about your expected timelines for adding it to protocols and implementing them at the large dialysis organizations, since it sounds like most of the growth has been driven by mid and small sized ones right now? And when the LDOs do order and use Morvafcio, how do you expect that to increase the prescribing rates or other launch metrics over time?

[John Butler, CEO, President & Director at Akebia Therapeutics]

Great. Rona, thanks so much for the question. So the timelines for the LDOs and I'm going to ask Nick to give more detail, but in the first, as I mentioned, they're starting a large pilot to operationalize their protocol. Their protocol is written, but they need to ensure that because they're so large that they can operationalize it across the system without issues and patients can continue to get drug. Remember, they're going to be shipping drugs to patients' homes, so it's a different mechanism for treating anemia.

[John Butler, CEO, President & Director at Akebia Therapeutics]

So let's let Nick talk more about that pilot, because we're really excited that that's moving forward.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Yes. So this pilot is a large operational pilot. Again, to reiterate, this is not seeking efficacy data. It's to make sure patients can get their initial fill. The systems work to make sure they get formulary access.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

They can get refill data. And typically, these pilots can be between 5,200 sites. You talk about a pilot of 200 sites, that's bigger than most dialysis organizations. We have a number of physicians that have raised their hand to be on that pilot, and we've heard back that many of our KMEs who we interact with have already heard that they'll be part of that pilot. So this thing is the train is enrolling on this thing.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

And typically, these pilots work is they roll it out through training their staff, and so they'll probably spend a month or so training their staff on what to expect. As John mentioned, it's a little bit different way of treating anemia, and so we want to make sure the staff is well trained. And then they'll enroll the sites. They'll spend one to three months probably in the pilot, more like probably two to three months than one, because they want to make patients make sure patients get a refill. And once they check the box that all the systems are working and everything's connected, they're going to roll it out more broadly.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

And so when we think about that pilot in third quarter, broader rollout in fourth quarter.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Right. That's and as we said, I mean, that really kind of doubles the number of patients who can access the product once that one LDO goes. And when you think about how physicians will prescribe, the folks at US Renal, the physicians who are writing now, what was the number next? Something over fifty percent or fifty percent also have patients at one of the large providers. So you've already got physicians who are used to writing the product and want to write the product.

[John Butler, CEO, President & Director at Akebia Therapeutics]

So we think and frankly, a lot of those are the ones who are raising their hands to be a part of the pilot. They'll start increasing their prescribing quickly. Now, the second LDL was earlier in their process. We are working with them to share data, etcetera. As I said in my remarks, I'm very encouraged that they've ordered product, and they are allowing physicians on an exception basis to get the product.

[John Butler, CEO, President & Director at Akebia Therapeutics]

That's why we wanted to make sure we had that contract in place with them. But we clearly see that they're going to take longer before you get broad use from them. But of course, we're doing all that we can to move that as quickly as we can. But the idea that as you think about Q2, Q2 will clearly still be driven by the small and medium providers. 50,000 patients at the small and medium providers, lots of room to grow.

[John Butler, CEO, President & Director at Akebia Therapeutics]

When you think about the number of patients we have on today,

[John Butler, CEO, President & Director at Akebia Therapeutics]

at

[John Butler, CEO, President & Director at Akebia Therapeutics]

the end of first quarter, something just over 5,000 patients. Think that in the context of 150,000 available patients, there's lots of room to grow at the small and medium providers. But we're incredibly excited to get the large provider, the first large provider up and running, because I think that's the step function that comes into growth.

[Roanna Ruiz, Senior Managing Director, Biotechnology Analyst at Leerink Partners]

Got it. That's really helpful. And quick follow-up for me. It sounds also like the average prescriptions for Vafsio is increasing at a nice rate. How do you expect that to keep going or ramping into 2Q based on some of the metrics you saw exiting first quarter?

[John Butler, CEO, President & Director at Akebia Therapeutics]

Well, clearly, some of the increase in breadth is refits. I mean, you're so the patients are staying on, and that's a

[John Butler, CEO, President & Director at Akebia Therapeutics]

really good thing. But I'll let Nick comment.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Yes. I talked in my comments about we're seeing some physicians moving towards, we'll call it standard utilization, where they're using in a broad set of patients. That being said, the range of utilization is still really, really broad.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

We have a number of prescribers that are still only, in the early trial stage with one or two prescriptions, for patients. And so, you know, certainly there's a ton of growth still within the prescribing base as those physicians become comfortable with Vaseo and roll her out to broader And then we have all the physicians who have yet to prescribe at some of the medium and smaller dialysis organizations that are poised to. Protocols are in place, they're operationalizing those protocols, and certainly we expect the prescriber base to continue to expand and thus adding to the number of prescriptions per provider.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Yeah, Rona, as you know, mean, the interesting thing about dialysis is you normally think about a launch and you have your early adopters who can start writing the drug, and then you kind of march through. What you have to do in dialysis is you add that layer of access at the dialysis provider. So you've got folks who are early adopters at DaVita or Fresenius who just can't access the product yet. Those are the people that we're using Truly to advocate for that broadened access and to accelerate that. And I think that's paid off in the speed with which the first LDO is moving towards their large scale pilot.

[John Butler, CEO, President & Director at Akebia Therapeutics]

But it does create that level of complexity that you've got to go through that. And as Nick said, most of our prescriptions are coming from US Renal, but we've had orders from the other midsize providers, but they're just at the early stages. So we're really excited about what they can yield in Q2 and Q3 and beyond.

[Roanna Ruiz, Senior Managing Director, Biotechnology Analyst at Leerink Partners]

Got it. Thanks very much.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Thank you.

[Operator]

Thank you. And your next question comes from the line of Julian Harrison from BTIG. Your line is now open.

[Analyst]

Hi. Congrats on all the progress. This is Ray on for Julie, and thanks for taking our question. Just one for us. Has there been any material shift from Auryxia prescriptions to the currently authorized generic?

[Analyst]

Just curious how we should be thinking about generic penetration going forward.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Thanks so much for the question. So as you know, the authorized generic only entered the market post March 20, right? So in the quarter, it was very, very little. And we know exactly how much product went into the market and how much the AG will receive over the course of the year. So we know certainly in the first quarter, that's minimal.

[John Butler, CEO, President & Director at Akebia Therapeutics]

And it won't be a large percentage of the business even in Q2. The real question will be the next the first file are getting approved. And we've always been, as we've said in the past, been very cautious. As you know the way the dynamic works, have the AGA is out, the first filer has six months of exclusivity as well. And during that time, we think we can maintain a significant amount of revenue.

[John Butler, CEO, President & Director at Akebia Therapeutics]

We have the right to match prices within our contracts, because having URIC in the bundle has changed things. But without an ANDA approval from the FDA, there's a great opportunity for us. We just have no idea how long that's going to last. But every day that it does, here we are on May 8, and again, March 20 was the first day that our contracts suggested an ANDA filer, a generic, could answer the market, and no one's been approved yet. So we're enjoying that situation.

[John Butler, CEO, President & Director at Akebia Therapeutics]

And we have the product, and we'll be able to service the market for as long as that lasts. I just can't give you guidance on when generic might be approved. We're hoping it takes a while.

[Analyst]

Got it. Thank you. Sure.

[Operator]

Thank you. Please stand by for your next question. And our next question is from the line of Roger Song from Jefferies. Your line is open.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Excellent. Thanks for taking our question and for the update. Just a question related to the net price. Given right now, you're focusing on the the mid to small to mid dialysis provider, and then how this will change over time when you get more patients from large deal? Thank you.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Yeah. No, thanks, Roger, for the question. It's good to have you on the call. As it comes to net price, this is a very competitive environment that we are selling Vaseo in. So we're obviously incredibly careful about what we talk about.

[John Butler, CEO, President & Director at Akebia Therapeutics]

A couple of things just to remind you, the way the contracts are structured, it's an off invoice and then a rebate. But of course, the net debt that Eric described includes that the discount for that rebate, although it won't be paid until sometime in the future. But what we've also said is over time, we expect the net price per patient to decrease as volumes increase. But what you really see as you think about the dynamic of kind of midsize providers coming in, you just see lumpiness in the net price over some period of time. I will say, you have the net our net revenue, you have our number of prescriptions per prescriber, I think you can pretty close to our net price per prescription with the data that we've given you.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Great. That's helpful. And then I think you provided the new script versus repeat script as the one third, two thirds, two thirds, one third. And then how should we think about over time this will change, particularly when you have the launch, basically you have the broader rollout for the prescription? Thank you.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Great question. Nick, do you

[John Butler, CEO, President & Director at Akebia Therapeutics]

want to take that one?

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Yes. Early in the launch, obviously, most of our prescriptions are new patients as those are coming on, And those patients over time will continue to get refill rates. I wish compliance in dialysis were a little bit better, but you'll have an average compliance rate through market research at about kind of 65% -ish range. So you can expect those refills will grow as our percentage of total prescriptions, but again, lumpiness will exist, right?

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

So that lumpiness as new providers come on and, for example, an LDO in the second half, all those could be new prescribers for new patients. And so when we think about that, that lumpiness will play out in the second half as well. The important thing about the refill is to get the dose right, right? When we think about dose titration, in our clinical trials, we saw that the starting dose was obviously three hundred milligrams, and that the average dose, once folks were fully titrated was about 50% above that number. So when you think about refills, it's really important to pull in that dose increases.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

And we're seeing that, in those prescriptions that are refills.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Yeah, that's a very, very important point. I mean, that is going to be a little bit of a moving target as patients come on. But, you know, that ultimately, most prescriptions are going to be closer to I think the average was four thirty milligrams in Innovate. So that's probably where we'll land is somewhere. I think in real life, it's usually a little bit lower than that.

[John Butler, CEO, President & Director at Akebia Therapeutics]

But when you think about that from a revenue perspective, you do have to factor that in. So we've talked about that $15,500 WACC, that's at three hundred milligrams. So once you start adding that that increase in dose, thinking about that ratio between new and existing, you know, you're going to see that, that whack price that gross price increase to some extent. And I think as physicians become more comfortable with where patients are going to land, and they understand the focus data for three times weekly dosing and the modified data, they may even be starting more patients higher doses. So we'll keep updating you on that, but that will take some time for it to develop.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Wait, maybe just one last one, quick one. In terms of the NDD trial, given all the changes happening on the background at the FDA side, how confident you are, I know, given the trial design you have been guiding, how confident you can start the trial second half with the design you proposed? Thank you.

[John Butler, CEO, President & Director at Akebia Therapeutics]

It's a great question. I mean, there are clearly things happening at the FDA. I mean, remember, we are regulated by not CBER. So, while we've had a change in the division director for non malignant hematology, that happened a few months ago. We know the division director who's there now, the interim, we think she's great.

[John Butler, CEO, President & Director at Akebia Therapeutics]

We've interacted with her on a number of occasions and found her very pragmatic. We haven't seen any other changes at this point to our review team. So we don't have any reason to believe that we can't do that. I mean, we are doing a lot of work to initiate this trial, I'll call it at risk, because we want to be ready to start dosing patients before the end of the year. Again, a lot of the comments that we're expecting and discussion will be around this statistical analysis plan and how we're handling that versus some of the more operational aspects of the trial.

[John Butler, CEO, President & Director at Akebia Therapeutics]

So we think we can do that with very little risk. So we still feel we're on target. If that change is obviously as appropriate, we're going to update you. But we're still working towards that end of year timeline.

[Roger Song, Senior Equity Research Analyst at Jefferies]

Thanks for all the comments. Thank

[Roger Song, Senior Equity Research Analyst at Jefferies]

you.

[Erik Ostrowski, SVP, CFO & Chief Business Officer at Akebia Therapeutics]

Thanks, Roger.

[Operator]

Your next question is from the line of Allison Bratzel from Piper Sandler. Your line is now open.

[Allison Bratzel, Senior Research Analyst at Piper Sandler Companies]

Hey, good morning. Thanks for taking the questions. A couple from me. First, just bigger picture, could you talk about what's driving demand so far for Vaseo, the clinical profile versus economic incentives created by TDAPA? And then second, just a question on Vastio reimbursement trends.

[Allison Bratzel, Senior Research Analyst at Piper Sandler Companies]

Any detail on what you're seeing in terms of coverage at Medicare Advantage plans? Are you seeing innovation payments? Just what does that look like? Any color or detail there would be helpful. Thank you.

[John Butler, CEO, President & Director at Akebia Therapeutics]

I'm going to let Nick answer most, but from the demand perspective, I think just a broad statement is we're seeing most of the sales today at U. S. Renal. And whether it's at U. S.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Renal or the other dialysis providers, it's fundamentally driven by a belief in HIF, the opportunities that VAPSIO, a HIF product can give to patients. The economic side is enabling, right? It allows the access. What's great when the business side of the dialysis provider is happy to see the product be used, but it's being driven. Someone like Jeff Block, who's the principal investigator on the VOICE trial, and senior person at US Renal on the medical side, he's talking to everyone, every physician, because he's a believer.

[John Butler, CEO, President & Director at Akebia Therapeutics]

That kind of advocacy, we're seeing that at other dialysis providers, the smaller providers as well. But I probably answered too much of it for Nick that much more to add there. But if they don't believe in the clinical advantages, the economic doesn't hold. It might help you for a couple of years, but we're in this to make this standard of care, and they have to believe in the clinical benefit.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Yeah. And I can always talk more, John. Don't worry about that. Really, I went through kind of the anecdotal feedback we're hearing from physicians. At the end, to summarize that, they're finding value in the product.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Right? And you can see that in a couple different ways. One, if they didn't find value, patients might be one and done, right? They get a bad experience, they move them off the therapy, wouldn't see a refill. Refills are tracking exactly as we thought they would.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

And so that's one indication of the clinical profile. Two, they're continuing to broader into other patients. If they weren't seeing value in their initial patients they put on, they wouldn't have expanded their prescribing. And so that initial value, a little still early in the launch, but it gives us that confidence that folks are seeing the clinical value and they'll broaden their use. You know, of course, TDAPA, nobody does anything if they lose money on it, and so there is an economic, value there as well, and so that's underpinning it.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

But without the clinical foundation, the economics doesn't matter if the product doesn't work.

[John Butler, CEO, President & Director at Akebia Therapeutics]

I mean, it may for a short period of time, but it's not sustainable. And that's not what we're seeing here.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Exactly. The second part of your question was reimbursement. We've seen a number of Medicare Advantage plans. Frankly, there's been broad trial across a number of health plans. So you see folks when they want to put a patient on, they'll do a trial balloon prescription, to make sure it gets covered and reimbursed, and then they'll go broader.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

There are a number of Medicare Advantage plans that are seeing that broadening of prescribing. In other words, they're covering it. The dialysis organization has seen that they're covering, and they're expanding. And so right now, we're seeing roughly an eightytwenty between fee for service and other plans. And so as that evolves, over time, we expect it to expand obviously.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Also, the larger dialysis organizations have more negotiating leverage with the Medicare Advantage plans. So as they begin their pilot in the second half of the year and then they fully operationalize in the fourth quarter, that may shift favorably, towards the end

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

of year.

[John Butler, CEO, President & Director at Akebia Therapeutics]

And to be clear, that eightytwenty split is better than what we had planned or expected. So we're encouraged by that. As Nick said, some of it is early trial blue kind of prescriptions, but we haven't heard of pushback yet. So that's encouraging.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Ali?

[Operator]

Please stand by for your next question.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Okay.

[Operator]

Your next question is from Les Selowski from Truist Securities. Your line is open.

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Good morning. Thank you for taking my questions and congrats on the progress. Just first on the inventory stocking trends, perhaps maybe just comment on that. I know you put out there's a potential week out there. But as far as the LDOs come on, do you expect the bolus for the inventory stocking to increase the when they first onboard?

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

And then maybe just provide an over I guess a highlighted overview of the market landscape for the label expansion opportunities. Thank you.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Nick, do want to handle the inventory?

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Yes. So when I think of inventory, we talked about kind of a week higher at the end of the quarter versus when we were talking to you guys back in February. Still, four weeks of inventory is within the normal range of two to four weeks. USRC continues to grow the patient population. So four weeks on a forward looking where there's growth expected in that next quarter isn't unusual for the product.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

We felt it was important to kind of highlight it as we did obviously beat the original guidance that we proposed, but we wanted to give you some flavor there. Still all within kind of normal ranges. When we think about as futures come on, what will happen, and and let's just use the LDO that's gonna start their large pilot, is they'll stock for the pilot, and that pilot isn't broad utilization. But as they see that demand and see how physicians want to utilize the product, that'll give them a good insights to what that stock level needs to be when they brought it out. So I don't expect it to be giant stocking and then kind of waiting around to see if the demand comes.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

I think they'll put some stock in to make sure they have the appropriate level, then they'll see some demand and then they'll be able to gauge so they can kind of range accurately project the range between two and four weeks, of usage. Now that being said, the distribution network for these LDOs is efficient. We spent a lot of time working on the distribution network in quarter four to allow for prescriptions to get to the patient's home, with some efficiency. And we've seen that play out, throughout the late part of Q1, that these prescriptions should be able to reach the patient's homes quickly, and we can restock them very quickly. So we don't anticipate, even if they carry minimal inventory or under call the inventory, to have any issues at all.

[Nicholas Grund, SVP & COO at Akebia Therapeutics]

Right. I mean, I

[John Butler, CEO, President & Director at Akebia Therapeutics]

think focusing prescriptions and the prescriber demand gives you that underlying sense of the demand for the product and the excitement about the product. Inventory is going to follow demand in a really tight way. It's not like we're shipping thousands of bottles to retail pharmacies and you don't know what happens to them. We know exactly what's happening with all of these here. Thanks, Nick.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Les, your other question was around label expansion and NDD, and I appreciate the opportunity to reiterate the excitement about that market for us and our desire, and such as our desire to get to that market. Again, I say it every time. I think every time I'm out in the field meeting physicians, universally, they will tell me that they want to use this product in their non dialysis patient population. So the demand is there. That's an important and a wonderful place to start.

[John Butler, CEO, President & Director at Akebia Therapeutics]

And the market is there as well. So the patient population, if you just look at stage four and stage five non dialysis patients who are anemic, it's roughly the same size as the dialysis market. It's about five hundred and fifty thousand patients. These are all patients who have hemoglobins below 10, who are anemic, or being treated with an ESA today, which is a small percentage. What's important for us too from a business standpoint is recall, we have this TDAPA period where we have a higher price in the market.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Even if as that price declines, as our volume grows, it's still higher than the average ESA price for dialysis. We have said in the past, we do expect our average price post TDAPA to mirror that of the ESA, which is about $2,500 per patient per year. Remember, that's a billion dollar market in dialysis, so still a very substantive market that we can be very successful in. You don't have that same kind of limitation in the non dialysis market. It's more traditional market, 50% commercial payers, 50% government Part D and Medicaid.

[John Butler, CEO, President & Director at Akebia Therapeutics]

And recall our average price, our WACC at $15,500 would be the starting price for non dialysis as well. But the average dose there is a little lower than dialysis, about four hundred milligrams from our PROTECT study. But that would be something around $20,000 on a WAC basis. You take a discount, a kind of normal gross to net discount, discount for compliance, you're still north of $10,000 per patient per year, which is 4x the price that you'd see in dialysis. So that 5,000,000 patient population times 10,000 gives you the sense of how significant from a financial standpoint that non dialysis market is.

[John Butler, CEO, President & Director at Akebia Therapeutics]

And again, we're the only oral product looking to bring a product into that space. So it's a wonderful market opportunity for us.

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Very helpful. Thank you.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Les, thanks for joining the call.

[Operator]

I'm showing no further questions at this time. I would now like to turn it back to Mr. John Butler for closing remarks.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Thank you so much, operator, and thanks, everyone, for your questions and your time this morning. Hopefully, we effectively conveyed our enthusiasm about the progress of the VAPSIO launch. We are absolutely driving to make VAPSIO standard of care to treat anemia due to CKD and to improve treatment alternatives for CKD patients. We look forward to updating you on our progress in August on our Q2 call, and hopefully we'll see many of you during our investor meetings in the coming months. Thank you very much.

[John Butler, CEO, President & Director at Akebia Therapeutics]

Have a great day.

[Operator]

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Have a great day. Goodbye.

Participants

Executives

• Mercedes Carrasco, Senior Director of Investor & Corporate Communications
• John Butler, CEO, President & Director
• Nicholas Grund, SVP & COO
• Erik Ostrowski, SVP, CFO & Chief Business Officer
• Nicholas Grund, SVP & COO

Analysts

• Roanna Ruiz, Senior Managing Director, Biotechnology Analyst at Leerink Partners
• Analyst
• Roger Song, Senior Equity Research Analyst at Jefferies
• Allison Bratzel, Senior Research Analyst at Piper Sandler Companies
• Les Sulewski, VP - Biotech Equity Research at Truist Securities