Akebia Therapeutics, Inc. Q1 2026 earnings call

Thank you, and welcome to Akebia's First Quarter 2026 Financial Results and Business Updates Conference Call. Please note that a press release was issued earlier today, Thursday, May 7th, detailing our first quarter 2026 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 Burke, our Chief Medical Officer, will also be available during Q&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 7th, as well as in the Risk Factors and Management Discussion and Analysis section of our most recent annual and quarterly 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. 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 Vafseo. Second, continue to build the clinical evidence to make Vafseo standard of care for patients on dialysis. Third, execute on our impressive kidney disease-focused clinical development pipeline. We've made important progress across each of these areas. Starting with the Vafseo launch, revenues were nearly $16 million in Q1, representing our highest quarter of Vafseo net product revenue to date and demonstrating the growth we expected over Q4 2025.

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 Vafseo. 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. We continue to work to take advantage of the TDAPA opportunity for the balance of 2026. Of course, we're already planning for the beginning of 2027 when Vafseo will enter the dialysis bundle. The ESA market today for patients on dialysis is estimated to be approximately $1 billion. This is the market we're competing in, where we continue to work to become standard of care.

This leads to the second area of focus, building clinical evidence. That body of evidence supporting the potential benefits of Vafseo continues to grow. The post hoc hierarchical composite endpoint analysis from our phase III INNO2VATE program in dialysis was recently published in the Journal of the American Society of Nephrology. The analysis demonstrated that patients treated with Vafseo in the INNO2VATE 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. That analysis showed that patients in the INNO2VATE 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 Vafseo 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 Vafseo dosed three times weekly, and it contains a sub-study of red blood cell characteristics which we believe will further differentiate Vafseo's clinical profile versus ESAs. VOCAL top-line data will be followed by results from the VOICE trial being run by U.S. Renal Care, evaluating Vafseo 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 2027. If positive, they further support the findings of the recently published win statistics analysis.

Both VOICE and VOCAL 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. Now, shifting from Vafseo to our third area of focus, our R&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&D day to review our pipeline with the investor community.

We were joined by leading medical experts Dr. James Tumlin, Michael Holers and Jonathan Barratt. During that event, we reviewed the preclinical data in focal segmental glomerulosclerosis or FSGS models and prior clinical data in diabetic kidney disease for praliciguat, our soluble guanylate cyclase stimulator. 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, we believe praliciguat could deliver a differentiated approach via a 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 from baseline in UPCR at 24 weeks as the primary endpoint.

AKB-097, whose generic name is ebribafusp or Ebri, is our tissue-targeted anti-C3d complement inhibitor. We believe this product candidate could have comparable efficacy to the most efficacious currently approved complement inhibitors in a well-characterized pathway. Initial data suggests that Ebri quickly leaves the bloodstream, directly targeting the tissue of complement activation, in this case, the kidney. We believe this could avoid the increased re-infection risk you see with current products. We also believe this will allow Ebri to be delivered at a lower dose in a more convenient dosing regimen. As Dr. Jonathan Barratt articulated during our R&D day presentation, Ebri is a second-generation complement inhibitor. We believe these characteristics support the potential for Ebri to be a uniquely differentiated product in the market.

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. 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 effect 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 Ebri. As a reminder, as the basket study's open label, we expect to begin reporting initial data in 2027. Lastly, this quarter we were pleased to announce the initiation of a phase I study of AKB-9090, 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 SAD/MAD study is designed to evaluate safety, tolerability, and pharmacodynamics in up to 70 healthy adult participants. Top-line data from this program are expected in early 2027. Overall, we've had a strong start to the year, and we're making meaningful progress on both the commercial execution of Vafseo and the advancement of a pipeline that we believe can support long-term growth. Now, let me turn it over to Nick for more granularity on the Vafseo launch.

Thanks, John. Good morning, folks. Like John, I am encouraged by the growth potential for Vafseo 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 observed 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 Vafseo utilization and growth. Q1 brought a significant increase in the number of prescribers writing and patients on Vafseo.

Approximately 1,025 prescribers wrote a prescription for Vafseo, which was approximately 28% higher than the number of prescribers in Q4 2025. Importantly, approximately 30% of those prescribers were from dialysis organizations other than USRC. Dialysis organizations inventory remained relatively flat from Q4 2025 to Q1 2026. As you know, we reported Vafseo inventory destocking in the fourth quarter of 2025 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. From a patient perspective, we note a 60% increase in the number of patients on Vafseo at the end of Q1 2026 over the number of patients at the end of Q4 2025 to nearly 7,500 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 Vafseo are important indicators that adoption is broadening as more organizations implement Vafseo 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. 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 2/3 of all Vafseo 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 March were approximately 86% for patients treated under an observed dosing protocol. We believe this will reinforce the dialysis organization's decisions to provide access to Vafseo using observed dosing. Because of this expanded access, we anticipate the greatest opportunity for Vafseo revenue growth will be among dialysis organizations that have implemented observed dosing and expect nearly all in-center patients across DOs to be on an observed dosing protocol by the end of the year. 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 Vafseo therapy. As prescribers continue to gain real-world experience with Vafseo, and we generate and disseminate more data, we expect to further grow the breadth and depth of prescribing. Let me now turn it over to Erik.

Thanks, Nick. We're pleased to deliver Vafseo revenue growth this quarter as we continue our pursuit to make Vafseo standard of care for the treatment of anemia in dialysis patients with CKD. I'll now provide an overview of our Q1 2026 financial results as compared to the prior year. Total revenues, which are comprised of net product revenues and license and collaboration revenues, were $53.5 million in Q1 2026 compared to $57.3 million in Q1 2025. This decrease was driven by lower AURYXIA revenues, which was partially offset by higher Vafseo revenues.

Of these amounts, Vafseo net product revenues were $15.8 million in Q1 2026 compared to $12 million in Q1 2025, 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 2025 revenues reflected initial customer inventory build. AURYXIA net product revenues were $36.2 million in Q1 2026 compared to $43.8 million in Q1 2025, 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 previously communicated, we expect AURYXIA revenues to decrease in 2026 as compared to 2025. Lastly, license collaboration and other revenues were $1.6 million in Q1 2026 compared to $1.5 million in Q1 2025. Turning to expenses, cost of goods sold was $12.3 million in Q1 2026 compared to $7.6 million in Q1 2025. 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 2026. Of note, Vafseo-related COGS in both periods was derived from pre-launch inventory, which does not include the full cost of manufacturing, as a portion of those inventory-related expenses were recorded as R&D expenses in the period incurred prior to Vafseo's U.S. approval.

R&D expenses were $14.8 million in Q1 2026 compared to $9.8 million in Q1 2025. The increase in expenses was driven by increased clinical trial activities related to praliciguat, which we are evaluating in FSGS, and AKB-9090, which we are evaluating for the prevention of cardiac surgery-related acute kidney injury, as well as higher headcount-related costs. SG&A expense was $30.4 million in Q1 2026 compared to $25.7 million in Q1 2025. This increase was driven by higher headcount-related costs. Net loss was $9.1 million in Q1 2026 compared to net income of $6.1 million in Q1 2025. The change to a net loss in Q1 2026 resulted from lower AURYXIA revenues along with higher expenses this quarter as compared to Q1 2025.

Cash and cash equivalents as of March 31, 2026 were $162.6 million compared to $184.8 million as of December 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. With that, we welcome questions.