Full Press Release Details
Akebia Therapeutics Announces Preliminary Full-Year 2018 Financial Results and Business Highlights
Substantial revenue growth opportunity for Auryxia following robust 2018 commercial performance
First regulatory submission for vadadustat expected in 2019 in Japan, following positive
top-line results from pivotal phase 3 studies in Japanese subjects with anemia due to chronic kidney disease
Multiple vadadustat phase 3 readouts expected over next 18 months
CAMBRIDGE, Mass. March 18, 2019 Akebia Therapeutics, Inc. (Nasdaq: AKBA), a biopharmaceutical company focused on the development and
commercialization of therapeutics for patients with kidney disease, today announced preliminary financial results for the full year ended December 31, 2018 and business highlights.
2018 was a transformational year for Akebia, said John P. Butler, President and Chief Executive Officer of Akebia Therapeutics. We
successfully executed a number of strategic initiatives to advance our mission, and with the recent completion of our merger with Keryx, we have emerged as a leading, fully-integrated renal company with the potential to greatly improve care for
patients with kidney disease. We are pleased with the robust growth we have seen with Auryxia (ferric citrate) during 2018. Looking ahead, we see the potential for substantial revenue growth
in both the hyperphosphatemia and iron deficiency anemia markets.
Mr. Butler continued, With respect to vadadustat, our lead product
candidate, we believe that it has the potential to set a new standard of care for patients with anemia due to chronic kidney disease with a differentiated clinical profile. We recently announced positive
top-line results from two pivotal phase 3 studies in Japan conducted by our collaboration partner, Mitsubishi Tanabe Pharma Corporation, which adds to the body of data supporting vadadustat s potential to
serve as a much-needed therapeutic option for patients with anemia due to chronic kidney disease. In addition, we continue to drive our global phase 3 program for vadadustat, with enrollment completed in the larger of the two INNO2VATE studies and enrollment expected to complete in the smaller INNO2VATE study by April 2019. The next 18 months will be a very busy time,
with significant catalysts ahead of us.
Vadadustat Japanese Phase 3 Program
Vadadustat Global Phase 3 Program
Preliminary Financial Results (unaudited)
As a result of the completion of the company s business combination with Keryx Biopharmaceuticals, Inc. (Keryx) on December 12, 2018 and the time
required to complete the allocation of the merger consideration to the fair value of the acquired assets and liabilities as well as the assessment of the associated tax impacts, the company is announcing preliminary results for the full year 2018,
which are based on currently available information and are subject to revision, as further discussed below. The company anticipates a delayed filing of its Annual Report on Form 10-K for the fiscal year ended
December 31, 2018 (Annual Report) and plans to file a Form 12b-25, Notification of Late Filing, with the Securities and Exchange Commission, which will provide the company with a 15 calendar-day extension.
Net product revenues for Auryxia from December 12, 2018, the date of our merger with
Keryx, through December 31, 2018 were $6.8 million. The company did not have any product revenue prior to our merger with Keryx.
revenues for the fourth quarter of 2018 were $53.0 million, compared with $90.6 million during the same period in 2017. The decrease was primarily due to $42.9 million of deferred revenue associated with the MTPC collaboration
agreement being recognized as revenue during the fourth quarter of 2017, as the criteria for revenue recognition were satisfied in that quarter. No revenue was recognized under the MTPC collaboration agreement in the fourth quarter of 2018.
Collaboration revenues for the full year 2018 were $200.9 million compared to $181.2 million for the full year 2017. The increase was due to
increased revenues recognized under the collaboration agreements with Otsuka Pharmaceutical Co. Ltd. (Otsuka). Through 2018, Otsuka has funded 52.5% of the company s phase 3 development costs for vadadustat, and in the second quarter of 2019,
Otsuka is expected to increase its contribution to 80%.
Cost of goods sold was $6.3 million for the period from December 12, 2018 through
December 31, 2018, consisting primarily of costs associated with the manufacture of Auryxia and $4.8 million for the fair-value inventory step-up as a result of the merger accounting.
Research and development expenses were $87.1 million for the fourth quarter of 2018 compared to $68.4 million for the fourth quarter of 2017, and
$291.1 million for the full year 2018 compared to $230.9 million for the full year 2017. The increase for both periods is primarily attributable to an increase in external costs related to the continued advancement of the PRO2TECT and INNO2VATE phase 3 program, as well as increased headcount and consulting costs required to support our expanding research and
development programs.
Selling, general and administrative expenses were $55.1 million for the fourth quarter of 2018 compared to $7.6 million
for the fourth quarter of 2017, and $87.1 million for the full year 2018 compared to $27.0 million for the full year 2017. The increase in selling, general and administrative expenses is primarily attributable to merger-related costs of
$49.5 million, of which $41.7 million was incurred in the fourth quarter of 2018, including a non-cash expense of $13.4 million related to the issuance of shares to Baupost Group Securities,
L.L.C. in connection with its conversion of Keryx convertible notes. The increase for both periods was also attributable to an increase in costs to support our research and development programs, including headcount, information technology and
compensation-related costs.
Akebia reported a pre-tax net loss for the fourth quarter of 2018 of
$88.4 million, as compared to a pre-tax net income of $15.5 million for the fourth quarter of 2017. The pre-tax net loss for the fourth quarter of 2018
includes total merger-related costs of $46.5 million. The pre-tax net income reported for the fourth quarter of 2017 was attributable to $42.9 million of collaboration revenue recognized in
connection with the MTPC collaboration agreement, as the criteria for revenue recognition was satisfied in the fourth quarter.
For the full year 2018,
the Company reported a pre-tax net loss of $171.9 million, as compared to a pre-tax net loss for the full year 2017 of $73.7 million. The pre-tax net loss for the full year 2018 includes total merger-related costs of $54.3 million.
with cash, cash equivalents and available-for-sale securities of $321.6 million. The company expects its cash resources, including the prepaid quarterly committed
cost-share funding from its collaboration partners, to fund its current operating plan into the third quarter of 2020.
Conference Call and Webcast
Akebia management will host its full-year 2018 and business highlights conference call and webcast beginning at 4:30 p.m. Eastern Time today,
The conference call can be accessed by dialing (877) 458-0977 within the United States and
Canada and (484) 653-6724 for all other locations. The confirmation code is 1376157. Participants should dial in 10 minutes prior to the scheduled start time.
A live webcast of the conference call will be available in the Investors section of the company s website at www.akebia.com.
Beginning the morning of March 19, 2019, the call will be available for replay via telephone and the archived webcast will be available on Akebia s
website. To listen to the telephone replay, dial (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international) using conference ID number 1376157. The telephone
replay will be available for six days following the call.
About Akebia Therapeutics
Akebia Therapeutics, Inc. is a fully integrated biopharmaceutical company focused on the development and commercialization of therapeutics for patients with
kidney disease. The company was founded in 2007 and is headquartered in Cambridge, Massachusetts. For more information, please visit our website at www.akebia.com, which does not form a part of this release.
Vadadustat is an oral hypoxia-inducible factor prolyl hydroxylase inhibitor currently in global phase 3 development for the treatment of anemia due to CKD.
Vadadustat s proposed mechanism of action is designed to mimic the physiologic effect of altitude on oxygen availability. At higher altitudes, the body responds to lower oxygen availability with increased production of hypoxia-inducible factor,
which coordinates the interdependent processes of iron mobilization and erythropoietin production to increase red blood cell production and, ultimately, improve oxygen delivery. Vadadustat is an investigational therapy and is not approved by
the U.S. Food and Drug Administration (FDA) or any regulatory authority.
(ferric citrate) Tablets
Auryxia (ferric citrate) was approved by the FDA on September 5, 2014 for the control of serum phosphorus levels in
adult patients with CKD on dialysis and approved by the FDA on November 6, 2017 for the treatment of iron deficiency anemia in adult patients with CKD not on dialysis. For more information about Auryxia and the U.S. full prescribing
information, please visit www.auryxia.com.
IMPORTANT U.S. SAFETY INFORMATION FOR
AURYXIA (ferric citrate)
AURYXIA (ferric citrate) is contraindicated in patients with iron overload syndromes, e.g., hemochromatosis.
WARNINGS AND PRECAUTIONS
Most common adverse reactions with AURYXIA were:
SPECIFIC POPULATIONS
suspected adverse reactions, contact Akebia Therapeutics at 1-844-445-3799.
Please see full Prescribing Information
Regarding Preliminary Financial Results (unaudited)
As a result of the completion of the company s business combination with Keryx on
December 12, 2018 and the time required to complete the allocation of the merger consideration to the fair value of the acquired assets and liabilities as well as the assessment of the associated tax impacts, Akebia is finalizing its financial
results for the fourth quarter and year ended December 31, 2018. The unaudited, preliminary pre-tax financial results and the other financial information included in this press release are based upon
currently available information and management s current analysis and estimates of the financial results for the fourth quarter and year ended December 31, 2018, and are subject to revision as Akebia completes its internal review and audit
procedures. Akebia s independent registered public accounting firm, Ernst & Young LLP, has not audited or reviewed these preliminary financial results, and does not express an opinion with respect to, these preliminary financial
results. This summary is not a comprehensive statement of Akebia s financial results for the fourth quarter and year ended December 31, 2018. Actual results may differ materially from these preliminary financial results and other financial
information due to the completion of Akebia s quarterly and year-end internal procedures, final adjustments, items that may be identified in the course of completing audit procedures and other
developments that may arise between now and the time the results are finalized.
Forward-Looking Statements
Statements in this press release regarding Akebia s strategy, plans, prospects, expectations, beliefs, intentions and goals are forward-looking statements
within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, as amended, including but not limited to statements regarding the potential benefits of vadadustat; the potential timing and basis of the JNDA filing for vadadustat;
the rate and timing of enrollment of our clinical trials; the potential benefits of the combined company post-merger; the market and growth potential of Auryxia; the anticipated timing of the availability and presentation of clinical trial data and
results; potential and anticipated payments from our collaborators, including the timing thereof; the preliminary unaudited financial results under the heading Preliminary Financial Results (Unaudited) and the other financial information
included in this press release; and expectations regarding financial position, including the period of time cash resources, including committed funding from our collaborators will fund our current operating plan. The terms anticipate,
believe, expect, opportunity, planned, potential, target, will and similar references are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement, including that
the preliminary fourth quarter and full-year 2018 results may require updates and revisions in connection with the completion of the company s internal review and auditing procedures; the rate of enrollment in clinical studies of vadadustat;
risks associated with market acceptance and coverage and reimbursement of Auryxia; the risks associated with potential generic entrants for Auryxia; the rate of major adverse cardiovascular events in our global phase 3 clinical trials for
vadadustat; the risk that clinical trials may not be successful; the risk that existing preclinical and clinical data may not be predictive of the results of ongoing or later clinical trials; manufacturing risks; the quality and manner of the data
that will result from clinical studies of vadadustat; the actual funding required to develop and commercialize Akebia s product candidates and operate the company, and the actual expenses associated therewith; the actual costs incurred in the
clinical studies of vadadustat and the availability of financing to cover such costs; the risk that clinical studies are discontinued or delayed for any reason, including for safety, tolerability, enrollment, manufacturing or economic reasons; early
termination of any of Akebia s collaborations; Akebia s and its collaborators ability to satisfy their obligations under Akebia s collaboration agreements; the timing and content of decisions made by regulatory authorities; the
timing of any additional studies initiated for vadadustat; the actual time it takes to initiate and complete preclinical and clinical studies; the competitive landscape for Auryxia and vadadustat; the scope, timing, and outcome of any ongoing
legal, regulatory and administrative proceedings; changes in the economic and financial conditions of the businesses of Akebia and its partners; and Akebia s ability to obtain, maintain and enforce patent and other intellectual property