Akebia Therapeutics, Inc. Q3 2025 earnings call

Thank you, and welcome to Akebia's Third Quarter 2025 Financial Results and Business Updates Conference Call. Please note that a press release was issued earlier today, Monday, November 10, detailing our third quarter 2025 financial results, and that release is available on the investor 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, Nick Grund, Chief Commercial Officer, and Eric Ostrowski, Chief Financial and Chief Business Officer. 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 November 10th, as well as in our risk factors and management discussion and analysis section of our most recent annual and quarterly reports filed with the SEC. With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks to all of you for joining us this morning. The team is just back from a very successful American Society of Nephrology meeting, where we met with prescribers and customers and also presented data that continue to demonstrate the positive impact Vafseo can potentially have on important clinical outcomes in dialysis patients. The quality of data that we believe will lead to Vafseo becoming standard of care to treat anemia in dialysis patients. Of course, today there is significant focus on our current launch progress. I'm proud to share that through 41 weeks of launch, Vafseo has generated more total prescriptions than any recent launch in dialysis. This is a reflection of the recognition from prescribers of the potential clinical benefit Vafseo can bring. That being said, from a business perspective, I'm not satisfied with generating $14.3 million in revenue this quarter.

No one on the Akebia team is. To be clear, we are pleased with the direction of all the important launch indicators that we believe will lead to long-term success for the product. We increased accessible patients from 40,000 patients in the first half of the year to almost 70,000 by the end of Q3 with the initiation of the DaVita pilot and the addition of IRC and several smaller providers late in the quarter. However, as we advance through the launch, we continue to appreciate how long it takes to align all of the logistics and processes for a new therapy to be made available for patients, particularly one that will be delivered to a patient's home, a departure from how anemia has been treated for the past 35 years.

The bottom line is that getting patients on therapy and, in some cases, keeping them on in the highly protocolized dialysis environment has taken longer than we expected. That said, these are operational issues that we and our dialysis provider customers are working through as quickly as possible. We believe that our positioning is compelling. Market research and every conversation I had at the ASN meeting supports physician desire to prescribe. Nick will share more information on our launch as well as sentiments from prescribers that we heard at ASN. Further, I expect that strong interest from physicians is only going to grow with the Win-Odds analysis based on data from the INNO2VATE trials that was presented at ASN last week by Dr. Glenn Chertow. The purpose of the Win-Odds analysis is to bring a greater level of statistical power to analyzing critical clinical outcomes.

It's a statistical method designed to prioritize clinically meaningful endpoints in outcomes trials. This post-hoc data analysis showed that patients randomized to Vafseo experienced a lower risk of death or hospitalization compared with patients randomized to the ESA control, darbepoetin alfa. The benefit became more significant when you looked at an on-treatment analysis. You've heard me say repeatedly that continuing to provide data that supports the clinical differentiation of Vafseo will be critical for the product to become standard of care. This data is an incredibly strong start and an important step in delivering on that promise. We will, of course, work diligently to have these new data published so our medical team can communicate them in the field as appropriate. Moreover, Dr. Block has adopted this Win-Odds endpoint as the primary endpoint in the VOICE study, which we expect to read out in early 2027.

As a reminder, late next year, we'll also have the results from the VOCAL study that we're conducting at DaVita clinics. These readouts will be two important data catalysts for the company, and we believe the newly generated information should support continued long-term growth of Vafseo prescribing. Now, both the VOICE and VOCAL studies utilize three-times weekly or TIW dosing regimens. We've said before that observed dosing will be important for the in-center patient population as the dosing schedule can coincide with their dialysis treatments. Now, we plan to engage further with the FDA on adding TIW dosing to the label, but we have heard from physicians and providers that they are moving to this dosing regimen based on the evidence that already exists.

To this end, U.S. Renal Care is currently implementing a TIW dosing protocol in their clinics with a goal to have it available in all clinics in Q1 of next year. I expect some physicians may wait until Q1 to start new patients on Vafseo when they can leverage TIW dosing. Now, additionally, USRC will be shifting from using 150 mg tablets at home to 300 mg tablets for in-center use, which could impact inventory levels in Q4. In the long run, I believe this change, enabling observed dosing, will improve physicians' ability to drive patient adherence and compliance, which have been factors impacting growth. Before handing the call over to Nick, I want to go back to our launch for a moment. Having more prescriptions written in the first 41 weeks of a launch than any recent launch in dialysis suggests a very strong reception from the dialysis community.

Hearing feedback from physicians about their positive experiences with Vafseo and seeing data like Dr. Chertow presented regarding the potential favorable mortality and decreased hospitalization benefits compared to ESAs gives me more reason to believe we will achieve our goal of making Vafseo standard of care for dialysis patients. I'm extremely confident in achieving that long-term goal. In the near term, our team is tackling operational issues head-on to overcome them. Now, let me turn it over to Nick to give more granularity on these efforts. Nick?

Thanks, John. Good morning, folks. Like many others at Akebia, I spent the last several days in Houston at ASN talking to nephrologists and leaders from various dialysis organizations. The positive sentiment on Vafseo as a compelling treatment for anemia remains high. In fact, from market research, we now have early insights into the perceptions of nephrologists who have patients on therapy. We're pleased to see that more than half of the nephrologists surveyed view Vafseo as providing more consistent control of anemia than their ESA with fewer dose adjustments. More importantly, at ASN, we met with all of the large and mid-sized dialysis organizations with prescribing access, and they reinforced that they are vested in the success of Vafseo. All these factors give me confidence that we'll achieve our goal of making Vafseo standard of care for dialysis patients.

I believe that by continuing to address operational challenges and further improving access, we continue to unlock the true value of Vafseo. To that end, I'll share quarterly launch metrics. Note that as we bring on more dialysis providers in the coming quarters, we will not be able to continue to provide dosing-level data moving forward. During the quarter, approximately 725 prescribers wrote a prescription for Vafseo, and each prescriber, on average, wrote approximately 12.7 prescriptions. More than 85% of prescriptions were refills in quarter three, and the average dose of those refills has increased 5% versus the prior quarter and 32% above the starting dose. We believe this reflects that physicians are getting comfortable treating patients to the optimal therapeutic dose and that this trend of increasing average dose will have a positive impact on revenue.

In summary, overall, Vafseo demand in quarter three was flat versus quarter two, with new patient starts offset by lower-than-expected initial adherence. With expanded access, we have more to do to gain new prescribers and get more patients on therapy. We have extremely strong advocacy at USRC, as we said before, and saw a strong initial uptake. Now, over 85% of USRC physicians have written a prescription. However, we have seen continued lower adherence at USRC than we expected, lower than the industry standard we shared with you in quarter two, and the adherence rate at USRC is lower than we anticipate at other dialysis organizations. To improve adherence, we revamped and highlighted our messaging. We trained our sales team to better educate physicians, and particularly anemia managers, on potential GI issues and dosing and titration strategies. Our medical team is also supporting USRC in adjusting its protocols.

Much of this work is still continuing, and in recent months, we've seen an increase in patients getting a first refill, which we believe means caregivers are beginning to better understand how to successfully treat with Vafseo. While a positive sign that our efforts are making an impact, there's still more to do. I'm proud of our medical team for identifying solutions to discontinuations at any time and educating prescribers on Vafseo data to support dosing decisions as they address challenging protocol restrictions. Also important, the data we are seeing suggests discontinuations are lower in PD patients and at organizations with protocols permitting three times weekly or TIW dosing. As additional dialysis organizations adopt TIW dosing, including USRC, as John mentioned, we believe we'll continue to see an increase in patient adherence.

To continue the success of the Vafseo launch, we need to continue to increase prescribing access across dialysis organizations. We referred to having prescribing access when a dialysis organization has created and operationalized a Vafseo treatment protocol. In quarter three, we increased prescribing access by greater than 25,000 patients. Additional patients came from three sources: Innovative Renal Care, or IRC, the DaVita pilot, and a number of other regionally important small and independent dialysis providers. While we anticipated broad access at DCI, the fourth-largest dialysis organization, they have yet not enabled broad prescribing access through a protocol. IRC, the fifth-largest dialysis center, made Vafseo available to patients in mid-August and required all clinic staff to be trained by the end of September. With strong physician advocacy and all staff trained, we expect physicians to trial Vafseo in certain patient subgroups, leading to broader adoption in Q1 2026.

The DaVita pilot in over 100 clinics that treat nearly 10,000 patients also began in mid-August. Within large complex organizations, it makes sense to do a test run to ensure a smooth rollout. During the pilot, we saw patients being identified, labs being drawn, insurance being verified, and patients preparing to go on therapy in quarter four. The pilot was successful in that those processes were streamlined and revised when needed, and patients have since been dosed. We're pleased to say that DaVita has decided to roll Vafseo out to the remainder of its clinics and that Vafseo is available broadly as of today. With over 200,000 patients within DaVita now having prescribing access, our teams are working with prescribers to identify those appropriate to start on Vafseo.

In summary, while gaining significant traction is taking time, I believe the core tenets of a successful launch are in place and strengthening. We have strong market awareness, increased prescribing access, and we've already overcome several operational issues. With prescribing access for Vafseo at over 260,000 patients today, we expect several dialysis organizations to increase ordering in the fourth quarter of this year and, importantly, to build momentum into 2026. Let me now turn it over to Eric.

Thanks, Nick. We're happy to report another solid quarter of top-line performance with Vafseo and AURYXIA. I'll now provide an overview of our results as compared to the third quarter of last year. Total revenues, which are comprised primarily of net product revenues and also include license collaboration and other revenues, were $58.8 million in this quarter as compared to $37.4 million in Q3 of last year, representing an increase of over $21 million. Of these amounts, net product revenues increased to $56.8 million this quarter from $35.6 million in Q3 of last year. This was driven by sales of Vafseo, which were $14.3 million in the quarter, as well as by an increase in AURYXIA sales, which were $42.5 million this quarter as compared to $35.6 million in Q3 of last year.

As a reminder, AURYXIA lost IP exclusivity in March, and there is an authorized generic for AURYXIA on the market, though no generics have been approved by the FDA at this time. We are pleased to post another strong quarterly AURYXIA result, 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 decreased to $9.4 million this quarter as compared to $14.2 million in Q3 of last year. The key driver of this COGS reduction is that we are no longer reporting a $9 million quarterly non-cash amortization charge related to the acquired developed product rights for AURYXIA, which is now fully amortized.

Also, of note, Vafseo sales in the quarter were derived from pre-launch inventory, which does not include the full cost of manufacturing, and as a portion of those inventory-related costs were previously expensed to R&D prior to Vafseo's FDA approval. R&D expenses increased to $14.9 million this quarter from $8.5 million in Q3 of last year, driven by increased clinical trial program activities, including our VOICE and VOCAL studies, which aim to continue to generate data highlighting the benefits of treating patients with Vafseo, as well as higher headcount-related costs. SG&A expenses increased to $29.1 million this quarter as compared to $26.5 million in Q3 of last year. The increase was primarily driven by higher marketing costs in connection with the Vafseo U.S. launch, as well as increased headcount-related expense.

Turning to the bottom line, we generated net income of approximately $540,000 this quarter as compared to a net loss of $20 million in Q3 of last year. This quarter's net income was primarily driven by the increase in net product revenues, which was partially offset by higher operating expenses. Our cash position is strong. We ended Q3 with $166.4 million in cash and cash equivalents. We believe our existing cash resources and the cash we expect to generate from product, royalty, supply, and license revenues are sufficient to fund our current operating plans of profitability, including the advancement of our existing pipeline. In closing, our Q3 financials reflect our continued execution of the Vafseo launch and the continued steadiness of the AURYXIA revenue stream. We look forward to discussing our Vafseo launch progress, as well as the advancement of our pipeline on our next earnings call.

We'll now open the call up to questions. Operator?