Akebia Therapeutics (NASDAQ:AKBA) Q1 2026 Earnings Call

0:00 Day, and thank you for standing by. Welcome to Akebia's First Quarter twenty twenty six 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. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mercedes Carrasco. Please go ahead. Thank you, and welcome to Akebia's First Quarter twenty twenty six Financial Results and Business Updates Conference Call. Please note that a press release was issued earlier today, Thursday, May 7, detailing our first quarter twenty twenty six financial results, and that release is available on the Investors section of our website.

0:58 For your convenience, a replay of today's call will be available on our website after we conclude. Joining me for today's call, we have John Butler, Chief Executive Officer Nick Grund, Chief Commercial Officer and Eric Ostrovsky, Chief Financial and Chief Business Officer. Doctor. Steven Burke, our Chief Medical Officer, will also be available during Q and A. I'd like to remind everyone that this call includes forward looking statements. 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 is included in the financial results press release that we issued on May 7, as well as in the Risk Factors and Management Discussion and Analysis section of our most recent annual and quarterly reports filed with the SEC.

1:52 With that, I'd like to introduce our CEO, John Butler. Thanks, Mercedes, and thanks to all of you for joining us this morning. We are very pleased and excited by the start to 2026. I want to focus on three key areas that we feel we need to execute on to create near and long term value for patients and shareholders. First, we have to drive the near term launch performance of Vafsio. Second, continue to build the clinical evidence to make Vafsio standard of care for patients on dialysis. And third, execute on our impressive kidney disease focused clinical development pipeline. We've made important progress across each of these areas. Starting with the VapSio launch, revenues were nearly $16,000,000 in Q1, representing our highest quarter of VapSio net product revenue to date, and demonstrating the growth we expected over Q4 twenty twenty five.

2:47 We're pleased with the progress we're seeing within and across dialysis organizations, as we expand the breadth and depth of prescribing, and continue to educate the nephrology community on the benefits of Vafsio. We believe this growth is being driven by dialysis organizations that have chosen to implement an observed dosing protocol. Nick's going to expand on that important point and provide more detail on the quarter and trends we're seeing in 2026. Now we continue to work to take advantage of the TDAPA opportunity for the balance of 'twenty six. Of course, we're already planning for the beginning of twenty twenty seven when Vasya will enter the dialysis bundle. The ESA market today for patients on dialysis is estimated to be approximately $1,000,000,000 This is the market we're competing in, where we continue to work to become standard of care.

3:42 This leads to the second area of focus, building clinical evidence. And that body of evidence supporting the potential benefits of Vaseo continues to grow. The post hoc hierarchical composite endpoint analysis from our Phase III INNOVATE program in dialysis was recently published in the Journal of the American Society of Nephrology. The analysis demonstrated that patients treated with Vafsio in the INNOVATE trial experienced a lower risk of dying or being hospitalized than patients treated with the ESA comparator. Earlier in Q1, at the annual dialysis conference, we presented an economic analysis on the cost of hospitalizations for patients treated with vadadustat versus darbepoetin.

4:28 That analysis showed that patients in the INNOVATE trial treated with vadadustat had 7.7% fewer hospitalization events annually, a 16% reduction in hospitalization days, and based on Medicare cost data, a 14.8% lower annual hospitalization cost. We believe these data further support the potential benefits of managing anemia with Vascio and provide critical data to providers and prescribers making care decisions. We continue to share these important data with the medical and scientific community as we gear up for results from the VOCAL study expected by year end. VOCAL is being conducted at DaVita clinics to evaluate Vafsia dosed three times weekly, and it contains a sub study of red blood cell characteristics, which we believe will further differentiate Vafsio's clinical profile versus ESA's.

5:25 Local top line data will be followed by results from the VOICE trial, being run by US Renal Care, evaluating Vascio versus standard of care on a hierarchical composite endpoint of all cause mortality and hospitalization rates. Top line data from VOICE are expected in early twenty twenty seven. If positive, they further support the findings of the recently published Win Statistics analysis. Both VOICS and VOICS utilize a three times weekly dosing regimen aligned with in center dialysis treatment. Most dialysis organizations are systematically electing to move to an observed dosing protocol. We believe that shift is improving adherence and could lead to greater utilization over time.

6:12 Now shifting from Vafsir to our third area of focus, our R and D organization has been highly productive in advancing our kidney disease pipeline, which we believe will be an additional and important value driver for the company going forward. Strategically, this initiative is a natural extension for us, as it leverages our expertise in kidney disease drug development, broadens our presence within the kidney community, and aligns to our purpose to better the lives of people impacted by kidney disease. In April, we hosted an R and D Day to review our pipeline with the investor community. We were joined by leading medical experts, Doctor. Jim Tumlin, Michael Hoelers, and Jonathan Barrett. During that event, we reviewed the preclinical data in focal segmental glomerulosclerosis, or FSGS models, and prior clinical data in diabetic kidney disease for prilissauguat, our soluble guanylate cyclase stimulator.

7:10 This is an indication that has received increased attention, as there's now an approved treatment specifically for FSGS. We view this as a positive development for patients and the field. And we believe priliskoat could deliver a differentiated approach via unique mechanism of action in this heterogeneous disease. Enrollment in our Phase II study is ongoing. We're targeting up to approximately 60 patients who are already on maximally tolerated background dose of ACEs or ARBs. The study will evaluate change for baseline in UPCR at twenty four weeks as the primary endpoint. AKB097, whose generic name is Ebrigafuse or Ebri, is our tissue targeted anti C3D complement inhibitor.

7:59 We believe this product candidate could have comparable efficacy to the most efficacious currently approved complement inhibitors in a well characterized pathway. Initial data suggest that EVRI quickly leaves the bloodstream directly targeting the tissue of complement activation, in this case, the kidney. We believe this could avoid the increased infection risk you see with current products. We also believe this will allow every to be delivered at a lower dose in a more convenient dosing regimen. As Doctor. Barrett articulated during our R and D Day presentation, every is a second generation complement inhibitor. We believe these characteristics support the potential for every to be a uniquely differentiated product in the market.

8:45 We expect to initiate a Phase II open label basket trial in the second half of this year, evaluating Ebri in IgA nephropathy, lupus nephritis, and C3 glomerulopathy. These indications represent opportunity, and of course, we're evaluating additional indications to investigate as well. As part of the basket study, we'll be evaluating safety, tolerability, pharmacokinetics, pharmacodynamics, and effects on disease relevant biomarkers such as proteinuria and kidney function. Importantly, we expect the study to be designed to be able to demonstrate the efficacy and tissue targeting profile of EVRI. As a reminder, as the basket studies open label, we expect to begin reporting initial data in 2027.

9:32 Lastly, this quarter, we were pleased to announce the initiation of a phase one study of AKB-nine thousand ninety, our internally developed HIF PH inhibitor product candidate with an expected initial indication for the prevention of acute kidney injury associated with cardiac surgery. This randomized double blind, placebo controlled SADMAD study is designed to evaluate safety, tolerability and pharmacodynamics in up to 70 healthy adult participants. And top line data from this program are expected in early twenty twenty seven. Overall, we've had a strong start to the year, and we're making meaningful progress on both the commercial execution of Vafsio and the advancement of a pipeline that we believe can support long term growth.

10:17 Now let me turn it over to Nick for more granularity on the Vafsio launch. Thanks, John. Good morning, folks. Like John, I am encouraged by the growth potential for Vafsio in 2026, which we believe is supported by our first quarter trends. While we ended 2025 with approximately 290,000 patients with prescribing access, the start of 2026 was when prescribing access translated to more widespread prescribing and more patients on therapy. I'll recap the quarterly results first, and then explain what I believe is driving growth. With the move to observe dosing protocols across multiple additional dialysis providers, we are no longer receiving as much detailed data as we have in the past, but I believe we can still provide a very good sense of vascular utilization and growth.

11:03 Q1 brought a significant increase in the number of prescribers writing and patients on Vassio. Approximately ten twenty five prescribers wrote a prescription for Vassio, which was approximately 28% higher than the number of prescribers in Q4 twenty twenty five. Importantly, approximately 30% of those prescribers were from dialysis organizations other than USRC. Dialysis organizations inventory remained relatively flat from Q4 twenty twenty five to Q1 twenty twenty six. As you know, we reported Vascio inventory destocking in the fourth quarter of twenty twenty five as a result of dialysis organizations transitioning to observed dosing protocols and the related shift in distribution from shipping bottles to patients' homes to stocking bottles at dialysis centers.

11:50 From a patient perspective, we note a 60% increase in the number of patients on Vaseo at the end of Q1 'twenty six over the number of patients at the end of Q4 twenty twenty five to nearly seven thousand five hundred patients. The number of new patient starts in quarter one was the highest in any quarter since the initial quarter of launch. The majority of new patients began in March, so Q1 revenue reflects at most only one month of treatment for these patients. We believe increases in number of prescribers writing and number of patients on Vassio are important indicators that adoption is broadening as more organizations implement Vassio treatment protocols that allow for greater access. Finally, I want to spend some time on adherence, and particularly the transition that dialysis organizations are making toward observed dosing protocol.

12:42 By the end of the quarter, USRC had observed dosing protocols available in nearly all of their clinics, as did IRC and DCI. In quarter one, approximately two thirds of all Vacio patients were being treated three times weekly, which we expect to continue to grow in coming quarters due to these protocol decisions. First refill adherence rates through the end of the March were approximately eighty six percent for patients treated under an observed dosing protocol. We believe this will reinforce the dialysis organization's decisions to provide access to Vassio using observed dosing. Because of this expanded access, we anticipate the greatest opportunity for Vacio revenue group will be among dialysis organizations that have implemented observed dosing, and expect nearly all in center patients across the EOs to be on an observed dosing protocol by the end of the year.

13:36 We are clearly seeing more patient starts at DaVita, though more slowly than at other dialysis organizations that have ramped up, and that remains our largest potential growth opportunity from a single dialysis organization. We believe DaVita will implement an observed dosing protocol in the second half of the year. To summarize, we are seeing encouraging signs in the underlying commercial indicators that matter most, including broader prescriber engagement, improved adherence in observing dosing patients, and increased prescribing at dialysis organizations beyond USRC, which all lead to a significant increase in patients on Vafsio therapy. As prescribers continue to gain real world experience with Vassio, and we generate and disseminate more data, we expect to further grow the breadth and depth of prescribing.

14:25 Let me now turn it over to Eric. Thanks, Nick. We're pleased to deliver Avastio revenue growth this quarter as we continue our pursuit to make Avastio standard of care for the treatment of anemia and dialysis patients with CKD. I'll now provide an overview of our Q1 twenty twenty six financial results as compared to the prior year. Total revenues, which are comprised of net product revenues and license and collaboration revenues, were $53,500,000 in Q1 'twenty six compared to $57,300,000 in Q1 'twenty five. This decrease was driven by lower Auryxia revenues, which was partially offset by higher Vaseo revenue. Of these amounts, Vaseo net product revenues were $15,800,000 in Q1 'twenty six compared to $12,000,000 in Q1 'twenty five, representing a 32% increase with an even larger increase in underlying demand as evidenced by the strong Q1 patient growth Nick described as well as by the fact that Q1 'twenty five revenues reflected initial customer inventory build.

15:24 Auryxia net product revenues were $36,200,000 in Q1 twenty six compared to $43,800,000 in Q1 twenty five, which was driven by lower Auryxia price. Looking forward, we note that in addition to the authorized generic for Auryxia that has been on the market for the past year, an additional generic form of Auryxia has entered the market. This increased generic competition is consistent with our expectations and prior guidance. Accordingly, as we've previously communicated, we expect Auryxia revenue to decrease in 2026 as compared to 2025. Lastly, license collaboration and other revenues were $1,600,000 in Q1 twenty six compared to $1,500,000 in Q1 twenty five. Turning to expenses, cost of goods sold was $12,300,000 in Q1 twenty six compared to $7,600,000 in Q1 twenty five.

16:14 This increase was primarily due to an increase in inventory write downs including as a result of excess and obsolescence and scrap primarily related to Auryxia during Q1 twenty twenty six. Of note, Vapsoe related COGS in both periods was derived from prelaunch inventory, which does not include the full cost of manufacturing as a portion of those inventory related expenses were recorded as R and D expenses in the period incurred prior to Zabsio's U. Approval. R and D expenses were $14,800,000 in Q1 twenty six compared to $9,800,000 in Q1 twenty five. The increase in expenses was driven by increased clinical trial activities related to pralisaglutide which we are evaluating in FSGS and AKB9090 which we are evaluating for the prevention of cardiac surgery related acute kidney injury as well as higher headcount related costs.

17:05 SG and A expense was $30,400,000 in Q1 twenty six compared to $25,700,000 in Q1 twenty five. This increase was driven by higher headcount. Net loss was $9,100,000 in Q1 twenty six compared to net income of $6,100,000 in Q1 twenty five. The change to a net loss in Q1 twenty six resulted from lower Auryxia revenues along with higher expenses this quarter as compared to Q1 twenty five. Cash and cash equivalents as of 03/31/2026 were $162,600,000 compared to $184,800,000 as of 12/31/2025. The decrease in cash was driven by the net loss for the quarter along with a decrease in working capital. We expect our existing cash resources and cash from operations will be sufficient to fund our current operating plan for at least two years.

17:58 With that, we welcome questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. Our first question is from the line of Julian Harrison with BTIG. Your line is now open. Hi, good morning, and congrats on the progress. First, I'm wondering if you could talk more about the prominent increase of patients on VAPSIO in March. Did you see follow through of that trend into April? And was there maybe a specific dialysis provider providers accounting for most of that uptake?

18:44 And then second, is so far recent approval relevant at all to your enrollment efforts in FSGS? Can you maybe walk us through how you're thinking about enrollment dynamics going forward for your Phase II trial? Sure, Nick, you want to take the first question? Yeah, thanks, Julian, the question. The increase in patients nearly 60% quarter over quarter, really was across all of our deals, the major ones. USRC continue to have increases as they've really moved to the observed dosing protocol in all of their clinics, which is really as we've indicated in previous calls allowed them to start adding new patients on without the complications of a lower adherence rate that we saw in the QD dosing scheme for in center patients.

19:31 In addition, we've seen some restarts at USRC, which I think is an important characteristics patients that previously were on QD dosing fell off, perhaps for compliance reasons. And now in a TIW or observed dosing regimen, that they're restarting them on therapy with Vasco, which is really important. IRC and DCI, really, once they got their dosing protocols in place, if you remember that was in Q4, what we saw was a very, very aggressive and accelerated adoption of the product within their physician base. That advocacy that we're seeing at you at IRC and DCI is strong. DaVita also had significant growth in the period. They're lagging a bit behind the others. They're still under a QD dosing protocol.

20:18 But we believe in the second quarter, in the second half of the year, we'll see them moving to an observed dosing protocol as well. And so really great growth across a number of our DOs, you know, we point to diversification. So the diversification away from USRC is an important measure to see how adoption is progressing at other dialysis organizations. It's good to see we have significant room still to grow at USRC, DCI, IRC, where we have great momentum. We all know that the VITA needs to increase. And as Nick said, it's growing for sure. But I think it's that observed dosing protocol that's going make all the difference in the world. So stay tuned. But again, we're really pleased with the growth that we're seeing in the USRC, DCI and IRC clinics, and expect to see significant growth from them as the year progresses.

21:19 On the FSGS trial, we think it's really a positive thing for patients. From a regulatory perspective, you can see that FDA and this is on priligivir, your second question really is supportive of bringing new products for this patient population. Know while everyone's excited that sparsentan has been approved, we know this is not a product that's going to be all the difference in FSGS. So I'll let Steve comment, but I'll say Steve and I were down at an investigator meeting a few weeks ago. And I was incredibly pleased by how excited the physicians were about the opportunity for Prilissaugat and the unique mechanism of action there. And we're pleased with the progress we're making.

22:09 There are multiple products in development there, so it is a competitive space. But we're very pleased that they're as excited as they are about Prilissauguat. We think that enrollment will progress. Don't know, Steve, is there anything you want to add? No, I'd just echo what you said, which is the bigger issue in conducting clinical trials is competing with other sponsors for patients. So I don't think the fill sparri approval's gonna have a significant, we haven't heard that it's having a significant impact on enrollment, don't anticipate it will, just because it's, you know, slightly better than angiotensin receptor blockers or ACE inhibitors, and so the majority of patients are still not going to respond to that drug, and it's going to become basically just a background therapy like ACE and ARBs are.

22:59 Very helpful, all around, thanks again. Thanks, Julian. And Steve is not here in the room with us, because he's down at the NKF Spring Clinical Meeting. So I'm sure he's getting more feedback on our impressive pipeline as well. Sorry, Lauren. Next question. Our next question comes from the line of Roger Song with Jefferies. Your line is now open. Hey, team. Good morning. Thanks for the updates, and thanks for taking our questions. This is Nabil on for Roger. So great to hear about the step up in patients and prescribers. And then regarding the first refill adherence at eighty six percent, how should we think about that level as we dosing scales more broadly across DOs?

23:45 And then I have a follow-up. Nick, you want to take that one? Yeah. In previous quarters, when we talked about first refill, the sample size was still relatively small. Now we're getting to the point where there are we've gotten to a sample size or penetration of observed dosing where we see significant number of patients being utilizing protocols that have observed dosing regimen. And so I feel pretty confident about 86 is going to stick around there may move a couple points one direction or another direction. But there's no reason for us to believe at this point that it shouldn't apply as other DOs bring on. Now every DO has a little bit different protocol, whether it be starting at nine hundred milligrams daily, how often they try to titrate up, whether they're coming from Merserra, or whether they're coming from Evogene.

24:38 But we've seen this consistent number here bouncing around between kind of eighty five and ninety for the last couple of quarters. And so right now, we're really confident that that's how you should think about it moving forward. Great, thank you. And then as we think about BAPCO throughout the remainder of 2026, should we expect the growth to be more linear from here or more back half weighted as the protocol adoption matures? Thank you. Yeah, I I don't know that we can guide that granularly to how it's going to go. I mean, as you see with seven thousand five hundred patients on the drug, there's lots of room to grow. We see great momentum at USRC. I think particularly excited to see so many of the patients who went off of the drug last year with the adherence issues that they have being put back on.

25:35 And with the adherence rates staying on the drug, how quickly that will accelerate. These are all things that will influence it. But there's tremendous room to grow. I remember there's about 66,000 patients just between USRC, DCI, IRC. Not all of them have a TDAPA reimbursement, but the access is quite good. So lots of room just to grow there. And then the question is, how quickly does DaVita move? DaVita's really taken the strategy of allowing physicians to make the choice, where at the others, it's more of a top down push. Here are the patients that are available. You put them on. And they do that over time, as I said, systematically. But it is different. It's a more traditional adoption curve, which it's harder to really handicap exactly how quickly that's going to happen. But we know that pool is so much bigger that we need to tap into it. So I don't think we could say, oh, it's going to be linear, or there's going to be some hockey stick at the end of the year. But certainly once DaVita goes to a TIW protocol and I mentioned the Jason paper, the Winaud's paper. Well, as I said, that was just published.

26:54 Before it was published, our medical folks couldn't talk to physicians about it. Now that it's published, they're out there talking about it. Those are the kinds of data that do change shapes of curves. But exactly how quickly that happens, that's to be determined. But we really are pleased with the momentum that we have in the market today. Thank you for the color, and congrats on that data update. Thanks very much. Our next question comes from the line of Matthew Caulfield with H. C. Wainwright and Co. Your line is now open. Hi. Good morning, guys. For pralisigwat development and FSGS, what do you view as the most clinically relevant change for the twenty four week UPCR primary endpoint?

27:44 Is there a certain delta that will be the most clinically relevant there in addition to preserving the podocyte health and just the overall reduced proteinuria? Thanks a lot. Sure, Steve, do you want to take that question? Sure, I think we would like to see something that's on par with what we've seen with sparsentan, so something around a twenty percent improvement in the change in UPCR, so twenty percent over what's achievable with pace and ARBs. I think the critical thing will be the proportion of patients who end up with a UPCR less than 0.7, because that's the approvable endpoint now for FSGS.

28:31 So that will be the, really the key metric that will drive our decision to go into phase three or not. Understood, Yeah, thanks a think that, obviously, we think that's the bar, the sparsentan bar for approval. But as Steve said, the parasol findings really is encouraging that we have this clarity from the FDA around what we need to do get the product approved. And again, given the heterogeneity of the disease, the uniqueness of mechanism, we really think that there's a place there's about 60,000 FSGS patients in The US.

29:19 The approval of sparsentan is great for patients, but there's significant room for new entrants. Again, hitting that clinical threshold will critical for us. Thanks for the question, Matthew. Yeah. Thanks, guys. Thank you. I'm showing no further questions at this time. I would now like to turn it back to John Butler for closing remarks. Thank you, Lauren, and thanks again to all of you for joining us this morning. We look forward to continuing to update you on the progress we're making in the launch of Vassio, building the evidence to support Vassio's long term growth and the continued advancement of our robust kidney focused pipeline. Have a great day, everybody. Thank you for your participation in today's conference.

30:05 This does conclude the program. You may now disconnect.