Akebia Therapeutics Reports Second Quarter 2023 Financial Results and Recent Business Highlights
Akebia to host conference call on August 25, 2023 at 9:00 a.m. ET
Expects to resubmit NDA for vadadustat as a treatment for anemia due to CKD in adult patients on dialysis in Q3 2023
Reports Auryxia® (ferric citrate) net product revenue of $42.2 million for Q2 2023 and reaffirms 2023 net product revenue guidance of $175.0-$180.0 million
CAMBRIDGE, Mass., Aug. 25, 2023 /PRNewswire/ -- Akebia Therapeutics®, Inc. (Nasdaq: AKBA), a biopharmaceutical company with the purpose to better the lives of people impacted by kidney disease, today reported financial results for the second quarter ended June 30, 2023 and reviewed recent business highlights. Akebia intends to file an amendment to 2022 Annual Report on Form 10-K to revise previously filed financial statements.
In July, Akebia completed an End of Dispute Type A meeting with the U.S. Food and Drug Administration (FDA) to discuss Akebia's anticipated resubmission of its New Drug Application (NDA) for vadadustat as a treatment for anemia due to chronic kidney disease (CKD) in adult patients on dialysis and received the FDA's Meeting Minutes in August. Akebia plans to resubmit its NDA for vadadustat by the end of this quarter with a potential PDUFA date projected in March 2024.
Akebia reported Auryxia® (ferric citrate) net product revenue of $42.2 million for the second quarter of 2023. Akebia also reaffirmed previously issued 2023 Auryxia net product revenue guidance of $175.0 - $180.0 million.
"Through 2023 we have worked to best position Akebia to deliver a new potential oral treatment option for anemia due to CKD to dialysis patients around the globe," said John P. Butler, Chief Executive Officer of Akebia. "This past quarter alone we made remarkable progress by gaining approval for vadadustat in 33 additional countries, securing Medice as our partner to bring Vafseo to patients in Europe in 2024 and clarifying the path to resubmission of the vadadustat NDA in the U.S. These impactful milestones mark significant progress toward our purpose to better the lives of people impacted by kidney disease."
Akebia reported additional business highlights in the second quarter:
The European Commission, United Kingdom Medicines and Healthcare products Regulatory Agency and Swiss Agency for Therapeutic Products approved Vafseo for the treatment of symptomatic anemia associated with chronic kidney disease in adults on chronic maintenance dialysis. Akebia expects a regulatory opinion on vadadustat in Australia this year. With these additional approvals, vadadustat is now approved in 34 countries.
In May, Akebia entered into an exclusive license agreement with MEDICE Arzneimittel Pütter GmbH&Co.KG (Medice), granting Medice the rights to market and sell Vafseo in the European Economic Area, the United Kingdom, Switzerland and Australia. Under the terms of the agreement, Akebia recognized an upfront payment of $10.0 million, and is eligible for commercial milestone payments up to an aggregate of $100.0 million and tiered royalty payments ranging from 10% to 30% of Medice's net sales.
Akebia strengthened its management team, announcing that Ellen Snow joined as Senior Vice President, Chief Financial Officer and Treasurer. Most recently serving in a leadership role within a commercial pharmaceutical organization, Ms. Snow brings more than 25 years of accounting and financial management expertise to the role, critical as Akebia moves toward a launch of vadadustat in the U.S. next year, if approved.
In June, Akebia reported positive topline results from IMPACT, a Phase 4 collaborative study investigating the impact of Auryxia, when used as the primary phosphate-lowering therapy, on the utilization of erythropoiesis-stimulating agent and intravenous iron as well as on laboratory parameters indicative of phosphate and anemia management compared to the standard of care in adult patients with CKD on dialysis.
Q2 2023 Financial Results
Revenues: Total revenue was $56.4 million for the second quarter of 2023 compared to $126.4 million for the second quarter of 2022.
COGS: Cost of goods sold was $17.3 million for the second quarter of 2023 compared to $18.6 million for the second quarter of 2022. The decrease was primarily due to lower write-downs of inventory as a result of excess, obsolescence, scrap or other reasons charged to costs of goods sold in the second quarter of 2023. Akebia continues to incur a non-cash amortization expense related to the intangible asset of $9.0 million per quarter through the fourth quarter of 2024.
R&D Expenses: Research and development expenses were $20.2 million for the second quarter of 2023 compared to $26.0 million for the second quarter of 2022. The decrease was primarily due to a reduction in spending on vadadustat development, including decreased clinical trial costs. In addition, Akebia decreased the overall R&D headcount related costs as a result of the April 2022 reduction in force and decreased outsourced contract services.
SG&A Expenses: Selling, general and administrative expenses were $27.0 million for the second quarter of 2023 compared to $32.2 million for the second quarter of 2022. The decrease was primarily due to decreased headcount related costs as a result of the April and November 2022 reductions in force. In addition, Akebia decreased Auryxia marketing, promotional expenses and professional service costs.
Net Loss: Net loss was $11.2 million for the second quarter of 2023 compared to net income of $29.4 million for the second quarter of 2022. The net loss is primarily a result of lower license, collaboration and other revenue due to the second quarter of 2022 benefiting from the $55.0 million termination fee from Otsuka noted above. In the second quarter of 2023 Akebia continued to implement further cost saving initiatives and operate more efficiently with significantly lower headcount as a result of the reductions in force that occurred in April and November 2022.
Cash Position: Cash and cash equivalents as of June 30, 2023, were approximately $53.6 million. Akebia expects to fund its current operating plan with existing cash resources and cash from operations for at least the next twelve months.
Revisions to Prior Period Financial Results
Through the course of preparing its financial statements for the quarter ended June 30, 2023, Akebia identified certain accounting errors related to the recording and reporting of accrued product returns for Auryxia (Product Return Reserves Errors) and, as a result, identified a material weakness in its internal controls over financial reporting as of December 31, 2022 and through June 30, 2023. The amendment to Akebia's 2022 annual report that the company intends to file will reflect revisions to its financial statements for the fiscal years ended December 31, 2022, 2021 and 2020 to correct the Product Return Reserves Errors, which primarily impact the balance sheet in those years and to correct certain other adjustments in those periods.
The Product Return Reserves Errors resulted in an under accrual of liabilities of $8.2 million, $7.9 million and $6.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. In addition, accounts receivable was understated by $1.1 million, $0.7 million and $0.7 million, for the years ended December 31, 2022, 2021 and 2020, respectively, and goodwill was understated by $2.6 million for the years ended December 31, 2022, 2021 and 2020. Additional immaterial adjustments have been made to the prior year financial statements. Included at the end of this release are tables identifying the impacts of the revision on the Company's unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 and the three months ended March 31, 2023 and 2022, respectively.
Conference Call
Akebia will host a conference call on Friday, August 25 at 9:00 a.m. ET to discuss its financial results and recent business highlights. To access the call, please register by clicking on this Registration Link, and then you will be provided with dial in details. To avoid delays, we encourage dialing into the conference call fifteen minutes ahead of the scheduled start time.
A live webcast of the conference call will be available via the Investors section of Akebia's website at: https://ir.akebia.com/. An online archive of the webcast can be accessed via the Investors section of Akebia's website at https://ir.akebia.com approximately two hours after the event.
About Akebia Therapeutics
Akebia Therapeutics, Inc. is a fully integrated biopharmaceutical company with the purpose to better the lives of people impacted by kidney disease. Akebia 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.
About Vadadustat
Vadadustat is an oral hypoxia-inducible factor prolyl hydroxylase inhibitor designed to mimic the physiologic effect of altitude on oxygen availability. At higher altitudes, the body responds to lower oxygen availability with stabilization of hypoxia-inducible factor, which can lead to increased red blood cell production and improved oxygen delivery to tissues. Vadadustat is not approved by the U.S. Food and Drug Administration. Vadadustat is approved in Europe for the treatment of symptomatic anemia due to CKD in adult patients on chronic maintenance dialysis. In Japan, vadadustat is approved as a treatment for anemia due to CKD in both dialysis-dependent and non-dialysis dependent adult patients
IMPORTANT SAFETY INFORMATION FOR VAFSEO (vadadustat)
For safety information, view the European Summary of Product Characteristics (SPC/SmPC) for Vafseo® (vadadustat) at https://ec.europa.eu/health/documents/community-register/2023/20230424158854/anx_158854_en.pdf, https://products.mhra.gov.uk/, and will be available via SwissMedic here.
IMPORTANT U.S. SAFETY INFORMATION FOR AURYXIA (ferric citrate) CONTRAINDICATION
AURYXIA (ferric citrate) is contraindicated in patients with iron overload syndromes, e.g., hemochromatosis.
WARNINGS AND PRECAUTIONS
Iron Overload: Increases in serum ferritin and transferrin saturation (TSAT) were observed in clinical trials with AURYXIA in patients with chronic kidney disease (CKD) on dialysis treated for hyperphosphatemia, which may lead to excessive elevations in iron stores. Assess iron parameters prior to initiating AURYXIA and monitor while on therapy. Patients receiving concomitant intravenous (IV) iron may require a reduction in dose or discontinuation of IV iron therapy.
Risk of Overdosage in Children Due to Accidental Ingestion: Accidental ingestion and resulting overdose of iron-containing products is a leading cause of fatal poisoning in children under 6 years of age. Advise patients of the risks to children and to keep AURYXIA out of the reach of children.
ADVERSE REACTIONS
Most common adverse reactions with AURYXIA were:
Hyperphosphatemia in CKD on Dialysis: Diarrhea (21%), discolored feces (19%), nausea (11%), constipation (8%), vomiting (7%) and cough (6%).
Iron Deficiency Anemia in CKD Not on Dialysis: Discolored feces (22%), diarrhea (21%), constipation (18%), nausea (10%), abdominal pain (5%) and hyperkalemia (5%).
SPECIFIC POPULATIONS
Pregnancy and Lactation: There are no available data on AURYXIA use in pregnant women to inform a drug-associated risk of major birth defects and miscarriage. However, an overdose of iron in pregnant women may carry a risk for spontaneous abortion, gestational diabetes and fetal malformation. Data from rat studies have shown the transfer of iron into milk, hence, there is a possibility of infant exposure when AURYXIA is administered to a nursing woman.
To report suspected adverse reactions, contact Akebia Therapeutics at 1-844-445-3799.
Please see full Prescribing Information
Forward-Looking Statements
Statements in this press release regarding Akebia Therapeutics, Inc.'s ("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, and include, but are not limited to, statements regarding: Akebia's expectations regarding the filing of an amendment to its Annual Report on Form 10-K for the year ended December 31, 2022; Akebia's expectations and plans with respect to the resubmission of its NDA for vadadustat, including the timing thereof; Akebia's expectations regarding the timing for a decision by the FDA on its NDA for vadadustat once resubmitted; Akebia's expectations on the timing for certain regulatory decisions for vadadustat by regulatory authorities in Australia; Akebia's plans and expectations with respect to commercializing Vafseo in Europe, including the timing thereof; Akebia's revenue guidance for Auryxia in 2023 and assumptions related thereto; and Akebia's goals, objectives and expectations with respect to its operating plan, expenses, cash resources and sources of funding for its cash runway, including its belief that its existing cash resources and revenues from Auryxia will be sufficient to fund its current operating plan for at least the next twelve months. The terms "intend," "believe," "plan," "goal," "expect," "potential," "anticipate," "will," "continue," derivatives of these words, and similar references are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results, performance or experience may differ materially from those expressed or implied by any forward-looking statement as a result of various risks, uncertainties and other factors, including, but not limited to, risks associated with: the potential demand and market potential and acceptance of, as well as coverage and reimbursement related to, Auryxia, including estimates regarding the potential market opportunity; the competitive landscape for Auryxia, including potential generic entrants; the ability of Akebia to attract and retain qualified personnel; Akebia's ability to implement cost avoidance measures and reduce operating expenses; decisions made by health authorities, such as the FDA, with respect to regulatory filings, including the anticipated resubmission of the NDA for vadadustat; the potential therapeutic benefits, safety profile, and effectiveness of vadadustat; the results of preclinical and clinical research; the direct or indirect impact of the COVID-19 pandemic on regulators and Akebia's business, operations, and the markets and communities in which Akebia and its partners, collaborators, vendors and customers operate; manufacturing, supply chain and quality matters and any recalls, write-downs, impairments or other related consequences or potential consequences; and early termination of any of Akebia's collaborations. Other risks and uncertainties include those identified under the heading "Risk Factors" in Akebia's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and other filings that Akebia may make with the U.S. Securities and Exchange Commission in the future. These forward-looking statements (except as otherwise noted) speak only as of the date of this press release, and, except as required by law, Akebia does not undertake, and specifically disclaims, any obligation to update any forward-looking statements contained in this press release.
Akebia Therapeutics®, Auryxia® (ferric citrate) and Vafseo® (vadadustat) are registered trademarks of Akebia Therapeutics, Inc. and its affiliates.
Akebia Therapeutics Contact
Mercedes Carrasco
mcarrasco@akebia.com
AKEBIA THERAPEUTICS, INC. | |||
Unaudited Consolidated Statements of Operations | |||
(in thousands, except per share data) | |||
Three Months Ended June 30, | |||
2023 | 2022 | ||
Revenues | |||
Product revenue, net | $ 42,244 | $ 43,309 | |
License, collaboration and other revenue | 14,132 | 83,056 | |
Total revenues | 56,376 | 126,365 | |
Cost of goods sold | |||
Product | 8,273 | 9,589 | |
Amortization of intangible asset | 9,011 | 9,011 | |
Total cost of goods sold | 17,284 | 18,600 | |
Operating expenses | |||
Research and development | 20,197 | 26,027 | |
Selling, general and administrative | 27,036 | 32,240 | |
License expense | 949 | 892 | |
Restructuring | (94) | 14,531 | |
Total operating expenses | 48,088 | 73,690 | |
Operating (loss) income | (8,996) | 34,075 | |
Other expense, net | (1,652) | (4,626) | |
Loss on lease termination | (524) | — | |
Net (loss) income | $ (11,172) | $ 29,449 | |
Net (loss) income per share - basic | $ (0.06) | $ 0.16 | |
Weighted-average number of common shares - basic | 186,817 | 183,598 | |
Net (loss) income per share - diluted | $ (0.06) | $ 0.15 | |
Weighted-average number of common shares - diluted | 186,817 | 190,375 | |
Unaudited Selected Balance Sheet Data | |||
(in thousands) | |||
June 30, 2023 | December 31, 2022 | ||
Cash and cash equivalents | $ 53,572 | $ 90,466 | |
Working capital | 26,263 | 55,646 | |
Total assets | 253,712 | 356,054 | |
Total stockholders' equity | (26,807) | 5,230 | |
The following tables reflect the impact of the revision on the Company's condensed consolidated financial statements as of and for the three and six months ended June 30, 2022. Only the individual lines previously reported that are impacted by the Product Return Reserve Errors as well as the correction of other immaterial misstatements to the financial statements are shown below (dollars in thousands, except per share amount):
June 30, 2022 | ||||||
Unaudited Condensed Consolidated Balance Sheet | As Previously | Adjustment | As Revised | |||
Inventories | $ 36,272 | $ 3,954 | $ 40,226 | |||
Accounts receivable, net | 81,869 | 133 | 82,002 | |||
Total current assets | 304,163 | 4,087 | 308,250 | |||
Goodwill | 55,053 | 3,991 | 59,044 | |||
Total assets | 521,804 | 8,078 | 529,882 | |||
Accrued expenses and other current liabilities | 91,284 | 3,721 | 95,005 | |||
Total current liabilities | 233,680 | 3,721 | 237,401 | |||
Other non-current liabilities | 66,889 | 7,721 | 74,610 | |||
Total liabilities | 459,504 | 11,442 | 470,946 | |||
Accumulated deficit | (1,493,496) | (3,363) | (1,496,859) | |||
Total liabilities and stockholders' equity | $ 521,804 | $ 8,078 | $ 529,882 | |||
Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income | Three Months Ended June 30, 2022 | |||||
As Previously | Adjustment | As Revised | ||||
Product revenue, net | $ 43,703 | $ (394) | $ 43,309 | |||
Selling, general and administrative | 32,807 | (567) | 32,240 | |||
Operating income | 33,902 | 173 | 34,075 | |||
Net income and comprehensive income | $ 29,276 | $ 173 | $ 29,449 | |||
Earnings per share - basic | $ 0.16 | $ — | $ 0.16 | |||
Earnings per share - diluted | $ 0.15 | $ — | $ 0.15 | |||
Six Months Ended June 30, 2022 | ||||||
Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income | As Previously | Adjustment | As Revised | |||
Product revenue, net | $ 85,151 | $ (470) | $ 84,681 | |||
Cost of goods sold, product | 31,923 | 771 | 32,694 | |||
Selling, general and administrative | 77,134 | (328) | 76,806 | |||
Operating loss | (24,591) | (913) | (25,504) | |||
Net loss and comprehensive loss | $ (33,145) | $ (913) | $ (34,058) | |||
Net loss per share - basic and diluted | $ (0.18) | $ (0.01) | $ (0.19) | |||
The following tables reflect the impact of the revision on the Company's condensed consolidated financial statements as of and for the three months ended March 31, 2023 and 2022. Only the individual lines previously reported that are impacted by the Product Return Reserve Errors as well as the correction of other immaterial misstatements to the financial statements are shown below (dollars in thousands, except per share amount):
March 31, 2023 | |||||
Unaudited Condensed Consolidated Balance Sheet | As Previously | Adjustment | As Revised | ||
Inventories | $ 20,604 | $ (194) | $ 20,410 | ||
Accounts receivable, net | 17,781 | 950 | 18,731 | ||
Prepaid expenses and other current assets | 25,381 | (678) | 24,703 | ||
Total current assets | 120,719 | 79 | 120,798 | ||
Goodwill | 55,053 | 3,991 | 59,044 | ||
Total assets | 276,858 | 4,070 | 280,928 | ||
Accrued expenses and other current liabilities | 46,367 | 4,712 | 51,079 | ||
Total current liabilities | 82,944 | 4,712 | 87,656 | ||
Other non-current liabilities | 12,643 | 4,129 | 16,772 | ||
Total liabilities | 291,210 | 8,841 | 300,051 | ||
Accumulated deficit | (1,579,130) | (4,772) | (1,583,902) | ||
Total liabilities and stockholders' equity | $ 276,858 | $ 4,070 | $ 280,928 | ||
Three Months Ended March 31, 2023 | |||||
Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income | As Previously | Adjustment | As Revised | ||
Product revenue, net | $ 34,828 | $ (122) | $ 34,706 | ||
Cost of goods sold, product | 10,473 | 705 | 11,178 | ||
Selling, general and administrative | 25,221 | (168) | 25,053 | ||
Operating loss | (24,938) | (659) | (25,597) | ||
Net loss and comprehensive loss | $ (26,217) | $ (659) | $ (26,876) | ||
Earnings per share - basic and diluted | $ (0.14) | $ (0.01) | $ (0.15) | ||
March 31, 2022 | |||||
Unaudited Condensed Consolidated Balance Sheet | As Previously | Adjustment | As Revised | ||
Inventories | $ 39,422 | $ 1,676 | $ 41,098 | ||
Accounts receivable, net | 64,582 | 776 | 65,358 | ||
Total current assets | 302,687 | 2,452 | 305,139 | ||
Goodwill | 55,053 | 3,991 | 59,044 | ||
Total assets | 535,356 | 6,443 | 541,799 | ||
Accrued expenses and other current liabilities | 109,660 | 4,583 | 114,243 | ||
Total current liabilities | 253,914 | 4,583 | 258,497 | ||
Other non-current liabilities | 77,743 | 5,398 | 83,141 | ||
Total liabilities | 509,240 | 9,981 | 519,221 | ||
Accumulated deficit | (1,522,772) | (3,537) | (1,526,309) | ||
Total liabilities and stockholders' equity | $ 535,356 | $ 6,443 | $ 541,799 | ||
Three Months Ended March 31, 2022 | |||||
Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income | As Previously | Adjustment | As Revised | ||
Product revenue, net | $ 41,448 | $ (76) | $ 41,372 | ||
Cost of goods sold, product | 22,333 | 772 | 23,105 | ||
Selling, general and administrative | 44,327 | 239 | 44,566 | ||
Operating loss | (58,493) | (1,088) | (59,581) | ||
Net loss and comprehensive loss | $ (62,421) | $ (1,088) | $ (63,509) | ||
Earnings per share - basic and diluted | $ (0.35) | $ — | $ (0.35) | ||
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