Why Akebia Therapeutics’ Stock is Outperforming


Akebia Therapeutics (AKBA) whose stock trades on the NASDAQ is outperforming. The firm’s drug vadadustat — an oral hypoxia-inducible factor (HIF) stabilizer in Phase 3 trial for anemia associated with chronic kidney disease (CKD) is attracting attention, which led to a lucrative agreement.

The enthusiasm towards this firm’s product vadadustat stems from the fact that it is an orally administered drug, which makes it a prospective tough competitor against the injectable red blood growth factor product being on the market for decades, generating billions of dollars.

The recent reason for the stock outperformance is news announcing that Vifor Pharma Group entered into an exclusive license agreement to sell vadadustat to Fresenius Medical Care dialysis clinics in the United States upon FDA approval.

Under the terms of the agreement, Vifor Pharma will exclusively distribute vadadustat to Fresenius Medical Care North America for use solely within its dialysis facilities in the U.S. to meet their need for a HIF-based treatment for anemia associated with CKD.

The agreement is structured as a profit-sharing arrangement between Akebia and Vifor Pharma. It is subject to approval of vadadustat by the FDA and inclusion of vadadustat in a bundled reimbursement model, upon which Akebia will receive a $20 million payment from Vifor Pharma. Included in the agreement also that Vifor Pharma will also make a $50 million equity investment in Akebia at $14 per share.

Akebia’s revenue from the profit and the milestone payment will be shared with its collaborator Otsuka Pharmaceutical Co. Ltd.

Akebia and Otsuka plan to commercialize vadadustat in other dialysis organizations and centers and in the non-dialysis market in the U.S.

Prohost Observations

Good news is that the intended buyer of Akebia drug vadadustat, Fresenius Medical Care, is the largest kidney dialysis provider in the U.S. In 2016, it treated over nearly 40% of the U.S. dialysis patients.

Encouraging is a statement made by Stefan Schulze, President of the Executive Committee and Chief Operating Officer of Vifor Pharma informing that Vadadustat could represent a significant advancement in the treatment of renal anemia with the potential to establish a new treatment paradigm and overcome the limitations of current therapies for patients with chronic kidney disease. He also expressed his belief that that the drug may also be a potential solution for patients who do not respond well to erythropoiesis stimulating agents.

Although the drug promises large revenues, the whole thing depends on the final clinical trial results. In case these results are successful, the whole matter will depend on the FDA decision regarding approval. In case everything goes well in favor of Vadadustat, the reward will be more than great.

An article will be posted later today under “Today’s Highlights” about important News regarding PTC Therapeutics (PTCT), Aerie Pharmaceuticals (AERI) and more good news for Sangamo (SGMO), which might be giving some of its huge profits made last week to profit-takers in today’s trading.     

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