Hello, everyone. Thank you for joining us at the H.C. Wainwright Second Annual BioConnect Investor Conference at NASDAQ. For our next session, we have Akebia, Akebia Therapeutics. With us today is Mr. John Butler. He's the President and CEO. Welcome to the session. Perhaps we can start out if you can provide us a brief description of Akebia.
Sure. First, Thomas, thanks so much for the invitation. It's great to, to have the opportunity to be here with you today. So at Akebia, we are a purpose-driven company with our purpose to better the lives of people living with kidney disease. We are in a very exciting moment for the company now. We are a commercial company with our first product, Auryxia, on the market. But we're excited because we just had our second product approval for Vafseo, vadadustat, from the FDA, approval at the end of March, and we're looking forward to making the product available in January of next year, and we'll talk about the dynamics behind that.
But, you know, we're a company now with multiple commercial products, with a commercial organization already in place. And, you know, we're really poised to disrupt a new market for us, the anemia of chronic kidney disease for patients on dialysis. And then, we think that there's great opportunity to expand the use of Vafseo as well. So, it's really just a very unique and exciting time for the company.
Great, yeah. Speaking of Vafseo, can you talk a little bit about the label between Vafseo and also with daprodustat? What are some limitations on the label, in your view, and what are some rooms for improvement?
So, you know, it's quite normal, I think, natural to ask, you know, the differences between vadadustat, Vafseo, and daprodustat, the GSK product. I think it's important to remember, from our perspective, that our competitor is the ESAs, right? I mean, the 99.9% of patients who are on treatment for anemia and chronic kidney disease on dialysis are on an ESA. From that perspective, you know, we are very pleased with the label that we have. We clearly have a label that allows us to position the product broadly. You know, we're positioning this Vafseo in the market as a new oral standard of care.
You know, the label allows for that. It is a broad label, you know, that allows us to target any patient who's on dialysis at this point, who's been on dialysis for three months. Remember the concern around the CRL from the FDA, which we disagreed with, was the potential to cause hepatotoxicity, and so we knew we'd have that in the label. But when you look at how that's handled in the label, we're incredibly pleased, you know, that you basically have to do testing for six months.
And this is something that they do for dialysis patients anyway. They take blood every month to measure hemoglobin and other things, so there's no added issues for dialysis providers at all. When you compare us to daprodustat, the GSK product, I mean, they have a warning around patients who have a history of hospitalization for heart failure. We don't have that warning, and that's about 40% of dialysis patients have a history of hospitalization for heart failure. So avoiding that, again, these are all things that just expand the patient population that could be, you know, where vadadustat, Vafseo, can be used. Now, we have the data in there that suggests that they should be on dialysis for three months before starting.
This is, again, something we need to go back and talk to the FDA about. This came in late in the review cycle. But, you know, we don't agree with that being added to the label either. We actually just presented data in January, it was January, at a dialysis conference that demonstrated that in the first months, between patients in our non-dialysis trial who converted to dialysis or patients who were in our dialysis program, you know, who started dialysis on vadadustat, there was no increased risk with those patients at all versus the ESA. You know, that is language we feel we'll have the ability to go back and talk to the FDA about.
But we've presented that data, we're working on publishing that data, and we don't know that that will. The conversations we've been having is with dialysis providers, that doesn't really impact their the desire to use the product.
So sounds like the label is pretty broad, and Vafseo is pretty safe. Can you discuss what's Vafseo's market opportunity there in actually allowing the dialysis patients?
Yeah. So the market opportunity, again, I mean, obviously, we're positioning the product as a potential new oral standard of care. Today, about 90% of the 550,000 dialysis patients that are out there in the US, about 90% of them are treated with an ESA for their anemia. So, you know, this is it today, it's about a billion-dollar market. It was a larger market in years past, but the prices for the ESAs have come down, you know, somewhat significantly over the last few years. We're still talking about, you know, kind of the $2,000-$3,000 a year range, which leads to about a billion-dollar market opportunity.
Of course, as you're introducing a new product, with this TDAPA reimbursement that I'm sure we'll discuss, you know, dialysis providers and physicians are now using the product to learn where it fits into the treatment paradigm, you actually have a more significant opportunity than that from a revenue standpoint b ecause of this TDAPA reimbursement for two years. So it's a large market opportunity. Now, as I said, we'll position it for all patients, but, you know, clearly there will be areas where physicians, whenever you launch a new product, there's where is the physician thinking about using the product first?
There are some, you know, really straightforward areas, where that's the case. The easiest one to think about is the home dialysis patient. You know, patients on home dialysis today go into the dialysis center once or twice a month to get their shot of ESA. A once-a-day oral product for that patient population, they don't have to come back into the dialysis center. I think most physicians naturally gravitate towards that as a clear area where they want to use the drug. It's about 15% of the market. Most estimates say that will grow to 20%-25% of the market over the next few years. The other area, you know, where we see physicians really wanting to use the product is in their patients who are on the highest doses of ESAs.
You know, higher doses of ESAs are associated with higher risk of MACE. When you look at our data, you know, we had a much tighter dosing range for Vafseo. As doses increased, you didn't see any change in MACE risk, yet patients still had their anemia managed. So, you know, those high-dose ESA patients are the ones where physicians see the highest safety risk, and dialysis providers see the highest cost.
So, you know, the idea that that's a group that might, that might move to, to Vafseo more quickly makes a lot of sense. So you look at those two market opportunities, really depends on where you define high-dose ESA, but, you know, you're talking about potentially 30%-40% of the patient population, that we think we can penetrate over time, and as I said, we're not stopping there. We clearly, you know, expect to be able to grow beyond that as well.
Right. So you touched on TDAPA briefly. Can we talk about what are some financial incentives for with TDAPA to these dialysis clinics for TDAPA and Vafseo? And what are your thoughts on after this TDAPA period this two years, what's your strategy after that period is over and Vafseo goes into the bundling reimbursement?
Yeah. Yeah. So TDAPA reimbursement, TDAPA is transitional drug add-on payment adjustment. So it's a, it's an add-on payment to the bundled rate. And I think CMS created TDAPA because they recognized that with a bundle, it's very hard to make room for innovation. And so they said: "We need to create a payment mechanism where the dialysis providers have an incentive to use new innovation." Now, they're not gonna use a new innovation unless physicians want to. So, you know, as we think about what we have to do to launch the product successfully when we introduce the product, we have to— you have to, mom and apple pie, you have to drive demand from the physicians who are gonna be prescribers. But then we have to contract effectively as well.
You know, we've got to create contracts where the cost of switching is worth it for the dialysis providers. You know, that's what we're working on now. You know, we haven't announced our WAC pricing yet because we're looking at a few things. We're looking at the ability to expand the market for the product into non-dialysis, and that leads to a different pricing structure, but also looking at, you know, kind of what makes sense in the TDAPA environment to get physicians and dialysis providers to wanna use the product. The third thing that we have to do well-
is to generate, continue to generate new data. So we're working on collaborative research that, one, puts the product in the hands of potential prescribers But two, really generates important data that demonstrates patient benefit and potential savings for dialysis providers, and that's part of the post-TDAPA strategy. So as you think about it, we'll set a WAC, we'll contract with the dialysis providers, you know, so that they are adequately incented for the complexity of switching their patients to Vafseo, and then we'll also generate new data so that once the TDAPA period ends, where we clearly will have to bring pricing in line with ESAs.
You know, there will be a decrease in our net price, but the great thing is, the way you construct the contracts. Well, they get volume discounts. So the higher they drive penetration, the lower our net will be, but less of a decline post-TDAPA. And at the same time, we're generating new data in dialysis patients that will allow you to continue to grow the dialysis market.
We're working on expanding into non-dialysis, and that will at a much different price point, allow us to continue to grow the revenue for Vafseo, through 2032. We think we have, you know, the right near-term strategy in place to drive, I mean, physicians wanna use the product. You know, we've got to continue to drive that demand, contract effectively so that they can use the product, generate new data, and put the product in the hands of physicians so they see how easy it is to use. This is one of the things that's really struck me, is when I talk to people who've been investigators in our studies, particularly our 3x-weekly study, where you know, they deliver the drug during dialysis.
They say: "You know, look, if someone's got a hemoglobin of 10.3 or 10.4, they just stay there with Vafseo. I'm usually getting calls from the anemia managers and nurses. 'This person's too high, this person's too low.' They love using the product 'cause they don't get those calls a nd the product just works.
And so putting that in the hands of more physicians, getting them to experience that while generating important data, we think will help drive the use of the product pretty significantly in the future.
I see. You touched on it a little bit. You mentioned there will be some kind of future studies with these dialysis centers, post-approval, you know, once launch is over. Can you describe some of these studies and you know, to further increase Vafseo's adoption? And then you mentioned earlier, currently 90% of dialysis patients on ESAs. What proportions of these patients, once they switch over to Vafseo, you know, will they stay on to Vafseo? And, what percentage of patients on ESA do you foresee will just keep using ESA?
So those questions are very related, right? I mean, that, that's the whole point of, you know, generating new data. You know, you wanna continue to grow the penetration within the market. It's not a, you know, we're gonna take advantage of two years of TDAPA, and then wash our hands, right? I mean, that, that is not our expectation at all. Will we have to adjust price? No question we're gonna have to adjust price. But if we do a good job of generating demand early, generating, you know, increased revenue, and we do a good job of generating new data, that says to dialysis providers: "You're gonna save money by using continuing to use Vafseo and using more Vafseo. And oh, by the way, this is also data that shows a benefit for patients.
So we're still in the midst of developing those protocols, and this will be collaborative research. We'll work with the dialysis providers, hopefully with at least a couple of the larger dialysis providers, and, you know, generate data that's really meaningful for them and really meaningful for patients. For instance, if you could demonstrate that you significantly reduce hospitalization. You know, in our INNO2VATE study, we showed about a 5% decrease in hospitalization.
With giving 3x-weekly dosing and avoiding, you know, some of the excursions that you saw, or avoiding ESA rescue, can you, can you do better than that? You know, if you can demonstrate any kind of significant reduction in the hospitalization. Well, often the dialysis provider is responsible for that patient fully, right? Hospitalization's expensive. Even if they're not, if they're not sitting in the chair dialyzing, they're losing money.
So keeping patients in the chair, anytime you can demonstrate something like that, it's a benefit for the dialysis provider. They wanna keep using the product. And physician prescribers say that's a benefit for the patient as well. And frankly, we believe that as physicians use the product, when they see how easy it is to use. T here were significantly fewer dose adjustments in the FO2CUS study in the Vafseo group versus the Mircera group. It's easier for physicians to use it. They can keep people within the target hemoglobin range. They're gonna wanna use it in more patients.
So while if we don't adjust the price, then you have people who say: "Oh, no, we need to switch back to something that's cheaper. If we're willing to adjust the price, then we can continue to grow the penetration of the product as we develop this data. That's why it's also so important as we think about the non-dialysis market. T he way we're thinking about this, truly this pre-dialysis market, right?
These are people with GFRs 15 or below. They aren't getting treated now. They have a much higher mortality rate when they start dialysis. They have a higher mortality rate a year later. If we can get that, we're gonna, we're gonna engage with FDA and get an answer from them, we hope this year, so that we know our path forward.
If we have that patient population in our label, that's where physicians wanna use the drug more than any other. Now, that's the highest need, an oral product in the non-dialysis population. Well, if you have patients who start dialysis on Vafseo, they're not gonna switch them. If they're doing well t hey're gonna keep them on the drug. So, you know, we think you have multiple strategies here to get off to a quick start with TDAPA. B ut have a real, real staying power for the product and the ability to grow long term, both in dialysis and in non-dialysis.
If we construct our pricing strategy around non-dialysis, particularly that smaller market, there'll be a significantly higher price per patient in the non-dialysis population than in the post-TDAPA dialysis population.
I see. It sounds like, you know, all this analysis and studies that have been done or ongoing, sounds like it's part of the launch plan. Can you discuss. You mentioned Vafseo will be commercially available in January next year. Can you discuss some major factors behind that decision to delay the market launch to January next year? And what are some in addition to data-centric studies, discussions, what are some preparations as well that's ongoing?
Mm-hmm. Well, I'm glad you talked about delaying the launch. You know, we don't look at it that way. We're not delaying the launch. We are actively involved in the launch now. We're simply not making the product available till January, and that's really around TDAPA. Right, once you file for your TDAPA reimbursement, and it's only a once a quarter thing, it just takes CMS six months to give you TDAPA designation. And you really wanna wait to start selling the product until you have TDAPA, 'cause that's when you'll get the greatest penetration. You know, I mean, anyone who's invested in nephrology companies know that nephrology launches are notoriously slow. We're spending the notoriously slow part with our product in the market. We're generating demand.
All those things I talked about us needing to do: driving demand, contracting effectively, starting new clinical trials. Those are the things that we're focused on today. You get physicians wanting to use the product. You contract in a way that the dialysis providers don't just make it available, they are anxious for clinicians to write the drug. They'll never force them to write the drug. B ut there's a difference between it being available and being something that they want them to use because they know it's a positive economic situation for them.
And the third is giving physicians who haven't had the chance to use the drug, some of them, you know, putting it in their hands and generating this new data. All of that's going on over the next however many months or less.
Six months.
6 or 7 months.
Right.
and so, you know, along the line, what are we gonna be showing? Well, we've got to get those contracts in place. You know, I assume that we'll update on maybe percentage of lives that are under contract. You know, we're 6, 7, 8 weeks, whatever it is now, into post-approval, and we're having all of those important contract conversations are ongoing as well. You know, it's also great that, as a company, we have Auryxia as well, you know, our phosphate binder which is also entering the dialysis bundle in January of next year and will have its own TDAPA period.
So we have to contract for Auryxia. I knew there was gonna be a benefit in this, but it's amazing to me how positive the conversations are when you're talking to dialysis providers who know they have to get Auryxia under contract because they need to have that available January 1, and they wanna talk about Vafseo at the same time.
That really gives us some real heft to the conversations that we're having with providers, and it really shows Akebia as a company that's really committed to dialysis and willing to work with them, you know, in an important way. So, you know, we'll continue to update on that. We'll update on the progress on the development program. I think one of the most important catalysts for us, you know, before the end of the year, we'll be getting guidance from the FDA on the non-dialysis market.
You know, as we look at that opportunity, you know, you all—I mean, and none of the analysts covering us have any non-dialysis in the model. I understand why. I mean, that, that was the, the conclusion of the PRO2TECT study. But when we got the CRL, FDA said, "Come back and talk to us about subpopulations where the benefit-risk is positive.
We really think that this GFR below 15 group absolutely fits that bill. And if FDA gives us. We expect we'll probably have to do clinical work, although our data from PRO2TECT is incredibly strong in that patient population. We'll probably have to do some clinical work, so it won't be right away, but I think it changes the story around Vafseo for the company if FDA gives us that clear guidance around non-dialysis.
So, you know, it's really seeing from market research that, you know, again, I keep using the example of, you know, kind of tightening a spring, generating the demand from the physicians, getting the contracts in place, getting the product in the hands of people, to start this clinical study, and then introducing the product in January, and hopefully that drives a very quick uptake in the launch. And that's our goal. But, you know, as you think about this year, lots of kind of head-down execution . Again, exactly when before the end of the year, I'm not sure, but getting that guidance from the FDA will be a game-changer for the company.
I see. Gotcha. So you mentioned dialysis and non-dialysis, you know, two different baskets. But for just dialysis for now, can you discuss what you're expecting in terms of launch, early launch trajectory with Vafseo?
Well, we haven't guided on revenue. We're certainly not ready to do that right now. We wanna get the contracts in place, you know, really understand in a kinda where dialysis providers and physicians are thinking about about using the product over the course of the year. Remember, the opportunity, TDAPA is a 2-year opportunity. Two years isn't enough time to really understand how innovation should be added to treatment, and we're spending time in Washington trying to drive that to be a 3-year TDAPA period, and post-TDAPA, have some of those dollars follow the patient.
But, you know, we plan based on what you have today, and what we have today is a 2-year TDAPA. And, you know, if there's, they wanna know how to use the product, and they, you know, again, you're making it economically attractive for them to use the product in clinically appropriate patients, they're gonna wanna do that quickly.
So, you know, our goal is to drive that adoption as quickly as we can. And again, you construct the contracts with off invoice discounts, and then rebates that are based on utilization. So, you know, the faster they adopt the product and increase utilization the more the rebates, the tighter our margins become but the less of a downdraft we have in 2027.
Right. So you touched on it a little bit, just one question, on Auryxia. What's, what's your plan? You know, you mentioned there's some interplay with TDAPA as well. What's, what's your plan to moderate the impact, once the patent expires in, March 2025?
Auryxia's been a great product to have. It did $170.7 million, I think, last year. We said it will grow this year, probably modestly. But it has been phenomenal to have a commercial organization in place. We've added, you know, a handful of folks more to the medical affairs group, but it's allowed us to have this in place. Then, next year, it's added to the bundle. LOE is in March of next year, but if you think about this TDAPA period, they're gonna look at all of the phosphate binder utilization for two years, and they're gonna set the utilization number and add that to the bundle, CMS will, forever basically. If you look at what happened with Amgen, and cinacalcet and Parsabiv, they had a three-year TDAPA.
They added $9.93 to the bundle, and then they stopped using as much branded cinacalcet and Parsabiv. I see something similar, right? There's a motivation to use branded products. We think that we construct the contracts in a way that in 2025, we can maintain most of our revenue opportunity from 2024. You know, as again, remember, you only have one generic entrant for the first six months.
Now, you're towards the end of the year, and you construct your contract in a way that all your rebates make sense. Over the course of 2026, you're probably seeing more of a decline. That's the point where Vafseo is growing. So it's really served a great purpose to, you know, support the company, and allow us to, to be successful. Remember, we've said we have, you know, we had $42 million in the bank at the end of first quarter. We've said we have at least two years of cash in the bank and of course, if we have the launch we expect, that would be even more.
Right. Fantastic.
Great.
Thank you very much, John, and thank you, everyone, for joining this session.
Thanks, Thomas.