Akebia Therapeutics, Inc. Q2 2026 earnings call

Thank you, and welcome to Akebia's second quarter 2026 financial results and business updates conference call. Please note that a press release was issued earlier today, Wednesday, August 5th, detailing our second quarter 2026 financial results, and that release is available on the investors 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 today, we have John Butler, Chief Executive Officer, Dr. Steven Burke, our Chief Medical Officer, Nick Grund, our Chief Commercial Officer, and Erik 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 August 5th, 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. With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks to everyone for joining us this afternoon. As you know, we've been focused on two critical areas of our business that we believe will deliver both important therapeutic advances for patients and value to shareholders. Those are advancing our kidney disease pipeline and making Vafseo standard of care for the treatment of anemia due to CKD in dialysis patients. We've had incredibly important advances in both areas since we last spoke to you. Today, I'll start with research and development. I believe our pipeline is underappreciated, and clinical advancement of our rare disease pipeline specifically provides the greatest opportunity to build value. Earlier this week, we announced that we initiated the phase II basket trial to evaluate ebribafusp, previously known as AKB-097 and ADX-097, in IgA nephropathy, lupus nephritis, and C3 glomerulopathy.

We believe ebribafusp, a next-generation complement inhibitor, could be truly differentiated in the rare kidney disease space in these indications and others. Beyond this initial basket study, we're doing the work to prepare for a phase II study in ANCA-associated vasculitis and expect to start that study next year. Our other rare kidney asset, praliciguat, continues to enroll in its phase II study in FSGS. As with Ebri, we believe there are multiple indications where Prali can play an important therapeutic role. Again, we believe the mechanism of Prali will allow it to occupy a unique competitive position in these rare diseases that each have significant unmet need. Our third kidney disease clinical candidate is AKB-9090, which was in a phase I study in healthy volunteers. 9090 continues to move successfully through the SAD/MAD study, and we expect to report data early next year.

Following that data readout, our plan is that next year, our development team's efforts and our dollars will be focused on Ebri and Prali, where we believe the largest opportunity to drive near-term value exists. Dr. Steven Burke, our Chief Medical Officer, is currently attending GlomCon Hawaii, where medical professionals around the world have met to discuss treatments for glomerular disease. That's the reason we're having our call this afternoon rather than our normal morning timing. I'll now ask Steve to share a few remarks on Ebri and Prali. Steve?

Thank you, John. We've built upon our team's commitment to patients and expertise in kidney disease to advance several programs into the clinic in 2026. We believe our mid-stage pipeline products, ebribafusp and praliciguat, have the potential to deliver differentiated and targeted approaches to severe diseases with high unmet need. As John mentioned, we just initiated a phase II basket trial for Ebri. The goal of this trial is to evaluate the safety and efficacy of Ebri in patients suffering from diseases marked by complement activation in the kidney glomeruli, namely IgA nephropathy, lupus nephritis, and C3 glomerulopathy. These rare kidney diseases affect thousands of patients, and while there are therapies available, each requires lifelong treatment. The currently available treatments include complement inhibitors, which suppress the complement system in the blood, and many require frequent administration.

Importantly, they generally have a box warning for significant infection risk, and this profile creates concern for long-term use. In non-clinical studies completed by Q32 Bio, Ebri was shown to be targeted specifically to the sites of complement activation. In patients with complement mediated glomerular diseases, we believe Ebri should localize to the affected glomeruli, which have significant deposits of C3d, while avoiding complement inhibition in the blood. We highlighted this during our R&D Day in April and expect the findings from non-clinical and phase I studies to be published in medical journals. During our R&D presentation, Dr. Jonathan Barratt, Mayer Professor of Renal Medicine from the University of Leicester, shared that he believed a complement inhibitor with this profile could be used long-term and in combination with B-cell-directed therapies such as APRIL and APRIL-BAFF inhibitors without the associated potential of systemic complement inhibition.

The recently initiated phase II BASKET trial is expected to enroll up to 30 patients and will evaluate a once-weekly subcutaneous dose of Ebri for 26 weeks in the main study, followed by a long-term extension study for responders. In the phase I study of Ebri in healthy volunteers, again conducted by Q32 Bio, this same dose achieved exposures necessary to provide tissue-specific complement inhibition without inhibiting the complement system in the blood. The primary endpoint of the phase II study is the incidence of adverse events, and secondary endpoints including the change in proteinuria and kidney function. In addition, the trial will measure Ebri pharmacokinetics and complement biomarkers in the blood and urine to detect if Ebri reduces complement activity in the kidney tissue while avoiding inhibition of the complement system in the blood.

The phase II BASKET trial is open label. We expect to report initial data in 2027. With regards to our phase II study of Prali in patients with FSGS, enrollment activities are ongoing. FSGS is characterized by focal and segmental scarring in the glomeruli. Prali is a small molecule that is designed to stimulate the soluble guanylate cyclase enzyme and has been shown in animal models of kidney disease to inhibit glomerular scarring and preserve kidney function. There are about 40,000 patients currently diagnosed with FSGS in the U.S.

This trial will enroll up to 60 patients with primary or genetic FSGS in a randomized, double-blind, placebo-controlled trial. The primary endpoint is change in urine protein-creatinine ratio, or UPCR, from baseline to week 24. The secondary endpoint is partial remission of proteinuria, defined as a 40% UPCR reduction and a UPCR less than 1.5 g per gram.

In a phase II study of diabetic kidney disease conducted by Cyclerion, Prali demonstrated rapid and sustained reduction in proteinuria as measured by urine albumin creatinine ratio, or UACR. We look forward to providing further updates on these studies. Now I will turn it back over to John.

Thanks, Steve. Now let's turn our attention to Vafseo and our efforts to make this important product standard of care. We had a very positive surprise this quarter when Dr. Geoff Block of U.S. Renal Care completed the planned interim analysis of the primary endpoint in the VOICE trial and found the statistical result significantly exceeded the pre-specified stopping criteria. Vafseo demonstrated a statistically significant and clinically meaningful reduction in the primary composite endpoint of all-cause mortality and hospitalization, with the result driven by a 10% reduction in hospitalization. USRC Kidney Research stopped the trial after a recommendation from the independent data monitoring committee and trial steering committee. For reference, the VOICE trial enrolled 2,116 patients.

Results of the planned interim analysis as of June 1st demonstrated that the trial met the predefined stopping criteria with a win odds of 1.16 and a P value of 0.0016, establishing non-inferiority and superiority of the primary composite endpoint. We've always had confidence in the clinical differentiation of Vafseo and the potential for a positive outcome of the study, but we were extremely pleased that we had this result earlier than expected. The result is consistent with the post-hoc analysis of the phase III INNO2VATE program, published earlier this year in the Journal of the American Society of Nephrology. When you look at both VOICE and the INNO2VATE analysis, you see that Vafseo demonstrated a consistent result whether dosing the product daily or three times weekly, and whether comparing Vafseo to a long-acting or a short-acting ESA.

It's also important to note that no head-to-head study of ESAs has ever demonstrated a significant benefit in hospitalization. We believe these data will make a huge difference for patients for years to come. As I've said many times, our goal is to make Vafseo standard of care for dialysis patients. Frankly, the VOICE data gives me greater confidence that we will achieve that goal. I'm especially encouraged by the increased interest we're seeing from the dialysis providers since we made the announcement.

At the same time, we currently have only shared data through a press release. Dr. Block is working with our support to present these data at a medical conference and have it published in a peer-reviewed journal as quickly as possible. While the tangible impact of this provider interest could take some time, we believe these data help competitively position and differentiate Vafseo moving forward.

In the meantime, I'm pleased to report that we had our first quarter with over 10,000 patients and $20 million in revenue. Here's Nick to provide more insight into the quarter. Nick?

Thanks, John, and good afternoon, folks. We're pleased to report significant sequential quarterly revenue growth as well as several adoption metrics and an important milestone with more than 10,500 patients active on Vafseo. Vafseo net product revenue increased to $21.3 million in quarter two of 2026, a 34% increase over the previous quarter, representing a continuation of robust growth. The total patients on therapy in quarter two represents an approximate 41% increase compared with quarter one.

Once again, in this quarter, we had the highest number of new patient starts in a quarter since the first quarter of launch, demonstrating strong momentum. The diversification of our prescriber base continues to grow. Today, approximately 1/3 of our prescribers are in LDOs outside of USRC. Additionally, a vast majority of patients are being treated under LDO-implemented observed dosing protocols, which is very much in line with our expectations.

The mid-sized dialysis organizations, USRC, IRC, and DCI, drove the most significant portion of patient growth. We believe that all three still have significant room to grow moving forward. Another common feature of these three customers is the significant level of support in Vafseo that their leadership is demonstrating. Driving prescribing within DaVita is our highest priority as it represents our most significant growth opportunity from a single dialysis organization. In quarter two, we continue to see additional new prescribers and patients on Vafseo at DaVita. As is the case with our mid-sized dialysis organization customers, while it is important to educate prescribers and caregivers on Vafseo, an inflection point comes with top-down support.

To that end, I'm encouraged by the continued high level of interaction between the teams from Akebia and DaVita, bolstered in the past month by DaVita's interest in learning more about the recent VOICE trial results. While I don't expect to see a meaningful increase in the DaVita adoption curve in quarter three, there is a heightened level of senior clinical team engagement regarding detailed operational implementation that we have not seen historically. We believe this bodes well for more impactful growth at the end of the year and sets us up well for 2027. At this stage of the launch, to best support dialysis organizations' engagement overall, in quarter two, we implemented a more targeted, streamlined, and agile commercial strategy that prioritizes a greater focus on large group practices and strategic partners.

The goal is to increase the efficiency and effectiveness of our commercial field team, while at the same time taking advantage of the broad awareness and breadth of patient access created previously. Our team continues efforts to drive Vafseo prescribing and growth. We understand how important it is for our commercial and medical affairs teams to work closely to engage with dialysis organizations and care decision-makers and support prescribers as they continue to get more experience with Vafseo to increase depth of prescribing as well. Now I'll turn it to Erik to go through the financials.

Thanks, Nick. Total revenues were $49.1 million in Q2 2026 compared to $62.5 million in Q2 2025. This decrease was due to lower AURYXIA revenues, which were partially offset by higher Vafseo. Turning to the components of total revenues, Vafseo net product revenues were $21.3 million in Q2 2026 compared to $13.3 million in Q2 2025, representing a 60% year-over-year increase. As we've previously discussed, we note that upon the expected end of Vafseo's TDAPA period on December 31, 2026, we plan to price Vafseo within the price range of ESAs, which is significantly lower than Vafseo's current price.

As a result, while we expect Vafseo unit sales volumes to increase in 2027 as compared to 2026, we expect 2027 revenues to decrease compared to 2026 due to this lower planned price. AURYXIA net product revenues were $25.5 million in Q2 2026 compared to $47.2 million in Q2 2025.

We continue to expect AURYXIA revenues to decrease in 2026 due to generic competition and price pressure. License, collaboration, and other revenues increased to $2.4 million in Q2 2026 compared to $2 million in Q2 2025. Cost of goods sold was $10.4 million in Q2 2026 compared to $9.9 million in Q2 2025. 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 $14.1 million in Q2 2026 compared to $11 million in Q2 2025. This increase was driven by activities related to our phase II clinical trials for fulvestrant and abiraterone, as well as higher headcount-related costs.

SG&A expenses were $28.2 million in Q2 2026 compared to $26.6 million in Q2 2025, driven by higher commercialization-related activity. Net loss was $8.9 million in Q2 2026 compared to net income of $0.2 million in Q2 2025. The change to a net loss this quarter was the result of lower revenues and higher expenses, including a $1.9 million expense related to the commercial reorganization mentioned by Nick, which is aimed at increasing the efficiency and effectiveness of our commercial efforts.

Cash and cash equivalents as of June 30, 2026, were approximately $155.5 million compared to $162.6 million as of March 31, 2026. We believe our existing cash resources and the cash we expect to generate from product, royalty, supply, and license revenues, along with our plan to refinance our senior secured term loan facility, will enable us to fund our current operating plan for at least two years.

With that, we will now open the line for questions. Operator?