Akebia Therapeutics, Inc. Q4 2025 earnings call

Thank you, welcome to Akebia's fourth quarter and full year 2025 financial results and business updates conference call. Please note that a press release was issued earlier today, Thursday, February 26th, detailing our fourth quarter and full year 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 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 Erik Ostrowski, Chief Financial and Chief Business Officer. Dr. Steven K. Burke, our Chief Medical Officer and Head of Research and Development, is available for Q&A, dialing in from the Annual Dialysis Conference in Kansas City today, where Akebia will present data on Vafseo this weekend. 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 February 26th, as well in the Risk Factors and Management Discussion and Analysis section of our most recent annual report 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. 2025 was an important year for Akebia, marked by the commercial launch of Vafseo, vadadustat, our oral HIF-PH inhibitor for the treatment of anemia due to chronic kidney disease for patients on dialysis. Vafseo, along with our phosphate binder, Auryxia, generated $227 million in net product revenue in 2025, during which time we also progressed multiple post-marketing clinical trials and advanced and enhanced our growing pipeline. Let's start with Vafseo. 2025 got off to a very fast start before a number of challenges flattened demand in the second half of the year. We addressed those challenges head-on, we believe today we're starting to see the demand growth that we've expected.

Most importantly, the body of evidence is growing that supports the potential for Vafseo to become standard of care in what is a $1 billion U.S. market opportunity after the TDAPA period ends, when we expect Vafseo will be priced roughly in parity with ESA pricing. While we didn't see the growth we expected in the second half of 2025, we built real excitement for Vafseo. Today, just over a year into the launch, more than 1,000 prescribers at 24 different dialysis organizations have written a prescription for Vafseo, and 290,000 patients have access to Vafseo in dialysis clinics with a protocol in place. I'm particularly encouraged by the shifting dynamics we began to see in Q4 that are continuing in Q1 that suggest greater breadth of prescribers as well as improving adherence rates.

Nick will provide more detail on these very encouraging trends in his remarks. A key element of our strategy to have Vafseo become standard of care includes continuing to generate data, supporting the benefits of managing anemia with a more physiologic approach compared to ESAs. At the ASN meeting in November, we presented a post hoc hierarchical composite endpoint analysis of prospectively collected outcomes of death and hospitalization from our phase 3 INNO2VATE program in dialysis. This analysis demonstrated that patients treated with Vafseo experienced a lower risk of dying or being hospitalized than patients treated with the ESA comparator. This coming weekend, at the ADC in Kansas City, we're presenting a cost comparison of Vafseo versus Darbepoetin based on INNO2VATE data.

In this analysis, Vafseo showed a 7.7% lower annual hospitalization rate, 16% reduction in hospitalization days, and based on Medicare cost data, approximately 15% lower Medicare hospitalization costs for patients treated with Vafseo versus Darbepoetin. Reduced hospitalization translated into a cost savings of about $3,700 per patient per year, meaning a savings of almost $2 billion per year if all eligible patients were treated with Vafseo. Late this year, we'll have the results from the VOCAL study that we're conducting at DaVita Clinics that's evaluating Vafseo dosed three times weekly. The trial also contains a sub-study of red blood cell characteristics, which we believe could make a compelling argument for Vafseo.

Fundamentally, when you manage hemoglobin levels with a more physiologic approach, you get a more physiologic and potentially better functioning red blood cell. The VOCAL data will be followed by results from the VOICE trial being run by USRC, evaluating Vafseo versus standard of care on a hierarchical composite of all-cause mortality and hospitalization rates. Data expected in early 2027. In my experience, in order to make a drug standard of care, particularly with nephrologists, you have to continue to deliver data that demonstrates the benefit of the product for their patients versus current treatment. In addition to the launch of Vafseo in 2025, we introduced our rare 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 disease community, and fits squarely within our corporate mission. We will host an R&D day for investors on April 2nd to discuss our mid-stage assets in detail, namely praliciguat and AKB-097, as well as introduce our early HIF-PHI, AKB-9090. praliciguat is an oral, once-daily, soluble guanylate cyclase stimulator being evaluated in a Phase 2 clinical trial of focal segmental glomerulosclerosis, or FSGS. We expect to enroll up to approximately 60 patients in this trial, which will evaluate change from baseline in urine protein to creatinine ratio, or UPCR, at 24 weeks as the primary endpoint.

Both the extensive preclinical work in FSGS disease models, as well as previous clinical results for praliciguat in diabetic kidney disease, give us confidence in the potential for the therapy to impact FSGS. AKB-097 is our tissue-targeted complement inhibitor that we acquired late last year. We believe this product candidate could have comparable efficacy to the most efficacious, currently approved products in a well-characterized pathway. The tissue targeting allows for the potential to, first, avoid the box warning for infection risk, and second, to deliver the drug in a more convenient dosing regimen. We believe this has best-in-class potential. We plan to initiate a phase 2 open label basket trial in the 2nd half of this year. We will be looking at initial indications of IgA nephropathy, lupus nephritis, and C3 glomerulopathy. These diseases represent a multibillion-dollar market opportunity in areas of high unmet need.

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. As this is an open label basket study, we expect to begin to report initial data in 2027. Lastly, we plan to initiate a phase I study in healthy volunteers of AKB-9090 in the first half of 2026, with top-line results later this year. Our initial target disease area for 9090 is acute kidney injury associated with cardiac surgery. Our research and development team is working hard to deliver these important catalysts as quickly as possible. Of course, all of this work will be built on the success of Vafseo. Let me turn it over to Nick, give more granularity on the launch.

Thanks, John. Good morning, folks. Like John, I am encouraged by the growth potential for Vafseo in 2026, which is supported by early Q1 data. First, let me recap the quarter four, 2025. During the quarter, approximately 800 prescribers wrote a prescription for Vafseo, and each prescriber, on average, wrote approximately 10.3 prescriptions. Of note, 128 of those were new prescribers. During quarter four, we were pleased to see our customer base expand and the number of new starts at dialysis organizations outside of USRC, specifically at DaVita and IRC, increased over Q3. Approximately 25% of new patients came from dialysis organizations other than USRC during the fourth quarter.

That said, Vafseo demand in Q4 was slightly down versus Q3, as we reported $6.2 million in Vafseo net product revenue on about $11 million in demand. We believe the slight decrease in demand, specifically in Q4, was primarily a result of a lower number of patient starts at dialysis organizations deciding to transition to an observed in-center dosing protocol and thereby waiting until the observed dosing protocol was available. USRC, for example, began to transition in November in approximately 25% of clinics. By the end of Q1, we expect the vast majority of USRC in-center patients to be receiving Vafseo three times a week while receiving dialysis, utilizing USRC's observed dosing protocol.

Of note, USRC's decision to transition to an in-center observed dosing protocol did result in a reduction in their inventory as they shifted from shipping a bottle to a patient's home to stocking bottles at their centers. The distribution change resulted in a one-time inventory drawdown impact of about $4.8 million in the fourth quarter of 2025. Now, let's turn to 2026. We begin the year on an optimistic note as we are already building momentum. At present, 290,000 patients have prescribing access, as DCI has implemented a Vafseo protocol. With the almost fivefold increase in prescriber access since the end of Q3 2025 and our field teams actively calling on physicians with expanded access, we are seeing an expansion of brand awareness and a comfort prescribing Vafseo within the nephrology community.

Additional commercial trends give us confidence in quarter one and the year ahead. First, we saw improved adherence from the beginning of 2025 through the end of the year and continuing into 2026. More importantly, the percentage of patients who got an initial refill rose from approximately 75% for all daily dosing patients in the first 9 months of 2025 to approximately 91% among the small subset of patients who were on observed dosing regimen. Looking at early patient data from January, we've continued to see an improvement in first refill adherence, with approximately 87% among the now larger subset of patients on an observed dosing regimen. We're encouraged by this improvement and will continue to monitor adherence rates in 2026 as centers implement their observed dosing protocols.

We're also seeing a nice pickup in utilization and broader adoption from IRC, the fourth largest dialysis center, after IRC made Vafseo available in late August and implemented an observed dosing protocol late in quarter four. DCI has started to put patients on therapy. We also see the number of prescribers within DaVita starting to increase, with some physicians trialing Vafseo in their patients. This has led to a higher % of new patients being from non-USRC clinics than in 2025. The investment dialysis organizations continue to make in Vafseo, taking the time and effort to integrate the therapy into protocols and care plans, make me believe that providers and prescribers understand the clinical benefit Vafseo can deliver and are committed to using it long term.

As prescribers continue to gain real-world experience as they transition patients onto Vafseo, I expect the momentum to continue to build. Our dedicated sales team is focused on increasing the breadth and depth of prescribing, a critical step to becoming standard of care for patients on dialysis. Let me now turn it over to Erik.

Thanks, Nick. As John mentioned, we saw a strong top-line performance in calendar year 2025, as net product revenues increased nearly 50% over calendar year 2024, driven by the U.S. introduction of Vafseo and increased sales of Auryxia. Our continued careful expense management in 2025 allowed us to both invest in R&D initiatives we believe can generate significant shareholder value and maintain our solid financial position. We are excited for a strong 2026 and executing on our plans to grow Vafseo revenues and advance our pipeline, including our mid-stage rare kidney disease programs. I'll now provide an overview of our Q4 2025 and calendar year 2025 financial results as compared to the prior year.

Total revenues were $57.6 million in Q4 2025, compared to $46.5 million in Q4 2024, and $236.2 million in calendar year 2025, compared to $160.2 million in calendar year 2024. These increases were driven by sales of Vafseo and an increase in Auryxia sales. Vafseo net product revenues were $6.2 million in Q4 2025 and $45.8 million in calendar year 2025. As Nick mentioned, Q4 Vafseo sales were negatively impacted by the inventory drawdown at USRC. Auryxia net product revenues were $48.1 million in Q4 2025, compared to $44.4 million in Q4 2024, and $181.5 million in calendar year 2025, compared to $152.2 million in calendar year 2024.

We note that we anticipate generic competition for Auryxia to expand this year beyond the current authorized generic competition and therefore expect Auryxia revenues to decrease in 2026 as compared to 2025 Auryxia. Turning to expenses, cost of goods sold was $12.5 million in Q4 2025, compared to $20.4 million in Q4 2024, and $39.5 million in calendar year 2025, compared to $63.2 million in calendar year 2024. COGS in both periods was driven by higher Auryxia sales volumes in 2025 and was impacted by the elimination in 2025 of a quarterly $9 million non-cash intangible amortization charge we incurred through Q4 of 2024. In addition, costs for calendar year 2024 included a $12.3 million benefit due to our ability to sell inventory previously written down as excess inventory.

Of note, Vafseo-related COGS in both periods of 2025 was derived from pre-launch inventory, which does not include the full cost of manufacturing, as a portion of those inventory-related expenses were reported as R&D expenses in the period incurred prior to Vafseo's approval in the U.S. R&D expenses were $26.6 million in Q4 2025, compared to $11.8 million in Q4 2024, and $62.4 million in calendar year 2025, compared to $37.7 million in calendar year 2024. The increase in expenses in both periods was driven by increased clinical trial-related activities for Vafseo and our other product candidates, higher headcount-related costs, as well as by a $12.8 million charge incurred during Q4 2025 related to acquired in-process R&D costs associated with the acquisition of AKB-097.

SG&A expenses were $26.1 million in Q4 2025, compared to $27.7 million in Q4 2024, and $107.5 million in calendar year 2025, compared to $106.5 million in calendar year 2024. Net loss in Q4 2025 decreased to $12.2 million, as compared to a net loss of $22.8 million in Q4 2024. Net loss for the year also decreased to $5.3 million in calendar year 2025, as compared to a net loss of $69.4 million in calendar year 2024. The decrease in net loss in both periods was driven by the increase in net product revenues, which was partially offset by higher expenses.

... Turning to the balance sheet, cash and cash equivalents as of December 31, 2025, were $184.8 million, as compared to $51.9 million as of December 31, 2024. We believe our existing cash resources and cash from operations will be sufficient to fund our current operating plan for at least the next two years. With that, we welcome questions.