Welcome to Jefferies 2025 Global Healthcare Conference. My name is Roger Song, one of the senior analysts covering Medicaid Biotech in the U.S. It's my pleasure to have the five-star chair with our first of the day company, Akebia Therapeutics. We have our CFO, CBO, Erik, and then Chief Commercial Officer, Nick, here with us. Welcome, gentlemen.
Great. Thanks, Roger.
Awesome. All right, let's just kick this off. We know Vafseo just had a great first quarter, full quarter launch. Maybe just give us some tidbits and highlights for the first quarter sales and a surprise to you, how you get the traction, and then we get the conversation going.
Yeah, we are very pleased with the launch of Vafseo and how it's going in the first quarter. We measure ourselves on a couple of different measures. First, we look for prescriber depth, and we look for prescriber reach. In that reach category is how many physicians are prescribing. In Q1, in the first quarter, we had 640 physicians prescribing the product, which is very, very broad reach. Most of those physicians were associated with U.S. Renal Care, but we have seen prescribing at other IDOs and SDOs or the small and the medium-sized dialysis organizations. The second is depth. Typically, as you go through a launch, people go through the stages of trial to adoption. We had over 12 prescriptions per physician in the first quarter, which is very, very high for our launch.
The surprising thing, if anything, about that is we've always talked about patient populations for which we thought the product was going to be used, whether it be the high-dose ESA patient, whether it be the home patient. Those are the profiles that we most heard that physicians wanted to use the product in. In the first quarter, we saw broad prescribing across all different patient types, which means physicians are seeing the value not only for those initial patients, but beyond the patients they had originally identified to use the product in. If that's the only surprise we have throughout the whole launch, that would be great.
Excellent. Great. Thanks for that. Exciting to see this very successful launch. It's not easy to do this in the renal business, particularly for the dialysis-dependent patient. Drill down a little bit. You mentioned the breadth and the depth of the use, which is very pleased to see. Maybe I know it's early, but you do not have the steady state of numbers. If you can throw us some number in terms of the breakdown between this high ESA, home use versus others, and then also in terms of the payar mix, I know the initial focus is fee for service, but also seems you are getting some traction in the Medicare Advantage as well.
Yeah, we do not quite have all of the data yet at this time to say which patients are high dose versus other versus home. We do know that we see the home patients at about 12% of our prescriptions are home patients, which is in line with the percentage of the population, which are home patients within the dialysis community. When we look at the payer mix, we are actually very encouraged. What we originally thought was we would be most available to fee for service Medicare patients. That is about 40% of the population. When you see the prescribing and the plans that are covering today, we have seen coverage with Medicare Advantage plans. That represents another 40% of the patient population. They are a little slower to come on. It requires a negotiation between the dialysis organization and the Medicare Advantage plan.
In the first quarter, we saw an additional up to 20% coverage of patients through those Medicare Advantage plans. So very encouraged to see that so early on in the launch.
Excellent. Wow, that speaks to the profile of the Vafseo and then the demand and the need in this population. Okay, and how about the DO, the size? I know you are trying to get those larger ones, but also you start with some small, mid one.
Yeah, and so today we're working with the MDOs, LDOs, and SDOs, in other words, the small and the medium dialysis organizations, a vast majority of prescriptions in Q1 with U.S. Renal Care. That being said, we have been working with the large dialysis organizations. For example, one large dialysis organization is going to do a pilot in the second half of the year in the third quarter. What they mean by a pilot is it could be between 50 and 200 clinics. Now, to put that into perspective, 200 clinics would make them the fifth largest dialysis organization in the U.S. Just the pilot alone has significant breadth to it. In that pilot, they usually train their physicians, and it's an operational pilot. They're not trying to prove safety or efficacy.
What they're trying to do is really make sure a physician can order it, and it goes through their electronic medical record. They get reimbursed for it. The patient gets that prescription in the home or in the clinic, and then they're allowed to get refills. Those are typically shorter pilots. An operational pilot is typically two to three months long. This large dialysis organization is indicated after that. They'll make it available broadly to their physician base. With the other large dialysis organization, they're a little bit further behind. We're working together to work through the protocol process with them. We expect that'll end in a good place, but later on, likely into 2026.
Yeah, it makes sense for those large DO to do some kind of pilot operation because it's just too big to roll out right away across all the clinics. You mentioned this 50-200, that's not considered small anymore, right? It's not real pilot pilot.
That's right.
Okay, got it. Initial launch is very encouraging, right? Obviously you have the dynamic is you have a two-year TDAPA outside of the bundle and then later on. Let's just focus on the initial kind of TDAPA period. How do you think about the next stage of the growth look like, and then how do you think about the ramp-up going to look like?
Yeah, and just to take a step back, TDAPA is Transitional Drug Add-on Payment Adjustment, which is a mechanism that CMS put in place to allow for innovative therapies to be created and launched into a space that has a bundled environment. It allows for an additional payment or reimbursement outside of the bundled rates. In dialysis, dialysis organizations receive $274 per treatment for each patient that's treated. This would sit outside of that bundle. They would still receive the $274, and then additionally, they would get Vafseo reimbursement. When we think about that two-year period, the economics in there are certainly one that help the DO cover the cost of innovation. After the TDAPA period, we spoke about this in several places. We're going to be lowering the price to be approximately the ESA price, which is $2,500 a year on average.
Remember, $2,500 a year times 500,000 patients who are anemic is a billion-dollar marketplace. Post-TDAPA, we're going to be being competitive on price. The second thing, which is actually more important, is the clinical profile of the product. As we continue to invest in studies to create data to support the product, we'll hopefully see decreased hospitalization and mortality through the VOICE trial. That's the second piece. The third piece is expanding the pie with access to only Medicare fee for service and some Medicare Advantage. Post-TDAPA, all patients have access. The pie gets bigger, the data gets bigger, and hopefully the market share continues to grow.
Got it. Yep. All right. Good. Maybe just to remind us in terms of the DO, the breakdown between the small, mid, large, and then I think you said that right now it's mostly coming from the relatively mid to small, a little bit large. What do the next two years and then the trajectory look like?
Yeah, so great question. We really list small to medium size. We use the word small to medium size. It is 150,000 patients, so it is significant. Today we have plenty of room to grow in the second quarter and beyond with just the small to medium-sized dialysis organizations. As we approach the second half of the year, the large dialysis organization who is kicking off the pilot becomes another catalyst to grow. What we have to remember is the current physician base of those writers that we have today, 50% of them also write in the large dialysis organizations. Their experience should allow us faster penetration than you might normally see in that LDO who is running the pilot and beyond. The other LDO, 2026, we will see where that ends up. Beyond TDAPA, we talked about pricing, data generation, and having access to the full population.
Yep. Yep. That's great. I think in the next two years, the pricing is not the issue because it's outside the bundle, and you just keep this momentum going, right, based on the profile and then based on the operation. People get, if they start to use and they like it, and then they kind of keep those patients on treatment because CKD patient is chronic disease. If you like the experience, that's good. You have the initial kind of the experience to get there. After the TDAPA, then post-TDAPA period, the key thing is pricing and then also expand this whole pie. Hopefully you can keep the market share and even grow from there.
The other important part, frankly, is NDD. I mean, when we think about the non-dialysis patient population to really become standard of care, there's a significant unmet medical need in the non-dialysis population. Now, I'm out with physicians often with our sales representatives. Not only are they excited about dialysis, but every single one of them says, when can we use it in non-dialysis patients or that pre-dialysis patient population? When we think about that, it also aligns with what we've heard from the FDA, where there's a significant unmet medical need in non-dialysis for an oral therapy. If you look at the landscape of products that are being developed, we're the only oral therapy that's being developed for that patient population. Super excited for growth drivers on NDD. I don't know, Erik, if you have anything.
Yeah, and I just add from a market opportunity perspective, the NDD opportunity is very significant. Nick had mentioned earlier that within the dialysis-dependent segment, it's about a $1 billion opportunity in the U.S. There's approximately 500,000 patients, and that $1 billion is derived from the current standard of care cost that Nick mentioned. When we look to NDD from a patient population standpoint in the U.S., again, it's about 500,000 patients. This is outside of the bundle payment scheme. You'd be looking at your more typical mix of commercial and Part D pricing, where the pricing you'd expect would be a multiple of what we see in dialysis-dependent. Therefore, NDD is a multi-billion dollar market opportunity.
Yep, that's right. We will ask a couple more questions about NDD in a moment. You mentioned the, and Nick, you mentioned the VOICE trial, and maybe just to remind us the status of that, and then how, based on your market research or the advice from your investigator, how this TIW is going to change the pattern, the prescribing pattern, and how this will drive the market share.
Yeah, so I'll start, and then I'll turn it over to Erik. When we think about the VOICE study, it's designed to demonstrate a 10% reduction in hospitalization and mortality. That's a massive importance. If we're able to achieve that, if you think about hospitalization, the average dialysis patient is hospitalized just about two times a year. The average cost of each hospitalization is $60,000. Oftentimes, the dialysis organizations are on the hook for some part of that. Showing a 10% reduction in hospitalization is so meaningful from an economic perspective. Second, it keeps the patient in the chair. They receive the $274 if they're sitting in the chair. If they're in the hospital, they don't receive that bundled payment. Lastly, patients being in the hospital is bad for patients. Keeping patients out of the hospital is the primary goal for it.
The second part of your question was TIW. Frankly, we're already seeing TIW today in some clinics. We have a paper that we've published that we did a study in alternative dosing forms, one of them being TIW. That study is available for physicians. We make it available as part of their protocol development process when we share all of our data with them. Some folks have decided to move in that direction already. The VOICE study being TIW, I think adds to that data package. Frankly, I think we'll see people deciding to move there on their own with the existing body of evidence that we have for TIW.
Got it.
Yeah, yeah. I just add, when we think about long-term adoption of Vafseo and making it the standard of care in anemia management, we believe that generating incremental data that show the benefits, whether they be economic or clinical, is very helpful to that end. The VOICE trial, it's a collaborative trial with U.S. Renal Care. Dr. Block is doing an incredible job from an enrollment perspective. We announced on our Q1 call that we were 75% through enrollment of 2,200 patients. We've made progress since then. We look forward to completing enrollment soon this year.
Excellent. Maybe just add a little bit the granularity here in terms of the dose, the average dose used for patients for the DD-CKD, because now your VOICE is every three times a week versus right now it's every day. I think based on the discussion we had before is the pricing, the per patient cost is neutral impact. Tell us a little bit more about why.
Yeah, and so typically when a patient receives the product in the home, they have issues like compliance. Do they take their medicines? Unfortunately, dialysis patients have a significant pill burden, and so we can expect somewhere in that kind of 60%-70% compliance rate. Adjusting for that, because compliance if taken in center, TIW is typically better. Adjusting for compliance rate, you see just about equal dosing between those two patient populations, net-net.
Yeah, got it. Okay, great. All right. Coming back to the NDD population, that's absolutely multi-billion, multiple compared to the DD population. I think you're having some discussion with the FDA. Maybe the first question is any change with the new FDA, kind of the new dynamic there? Tell us a little bit more about the recent interaction, and also where you are to start the phase three. I believe it's by the end of the year.
Yeah, so yeah, as you mentioned, we're engaging with FDA. We plan to meet with them later this year and plan to initiate this phase III trial in the second half of this year. This would be a U.S.-based trial. Yeah, we'll provide updates as those engagements continue.
What is the primary endpoint design and what's the current thinking versus anything you get the preliminary feedback from the FDA?
Yeah, so we're looking at this as a cardiovascular outcomes trial, looking at from a patient perspective, about 1,500 patients compared to the standard of care.
Okay, got it. Okay. You had that trial before in the NDD population, and it seems to have the more benefit in the U.S. population. That's why you want to focus for your phase three for this time. Any other evidence to suggest why this could be the success for phase three?
Yeah, it's a really important question because we think we're going to be going to the FDA with a really compelling data package. Remember, we've had almost 100,000 patients non-dialysis taking the therapy in Japan. That data will be part of the submission. We had the PRO2TECT trial, which you referenced. We just had a publication in JASN, which is a Journal of the American Society of Nephrology, that demonstrated that in the U.S. cohort of the PRO2TECT trial, there was no difference in safety or efficacy versus the standard of care. We'll have more than two years of dialysis use and the safety profile there. We will have this study. That data package is very, very robust when we go to the FDA. Not that anything tells us what the FDA is going to do, but we believe it gives us a decent shot at improvement.
Yeah, yeah, basically the new label expansion for the NDD will combine the whole package, as you just mentioned, and then you think this is a robust package for the potential labeling expansion.
Yeah, I mean, the FDA was very clear. There's a high unmet medical need in that population for an oral therapy. They are looking, we believe, to work with us to approve a drug. Remember, in that population, only 28% of patients with anemia are getting the therapy. There's a lot of data out there that talks to that if a patient moves from non-dialysis onto dialysis and they are anemic, they have worse outcomes. There is a desire to treat this patient population by physicians, certainly by us. We believe the FDA recognizes the unmet medical need.
Yeah, got it. Okay, great. One question when I do the diligence about Akebia is very interesting. We look through as well with the competitive landscape. It seems you are the only one, at least for the novel mechanism and then novel therapy and then HIF inhibitor. Maybe first of all, why you are the only one right now is launching the U.S. I believe we have passed, we have maybe successful phase , but did not get approval. They even got approval, but they withdrew. Tell us about what is special about this market and why you are the only one in town to launch in this market.
Yeah, it's a really great question. As obviously, the prior launch was GSK. I never like to focus on perhaps what they did wrong. I love to focus on what we're doing right. It starts with access. We went out early and we created a pricing strategy that allowed us to get nearly 100% of patients serviced by a dialysis organization under contract. That's a great step. As far as we know, that's the only time within the TDAPA period that's ever happened. Before launch, we had secured 100% of those contracts. You still have to go through the protocol process with those dialysis organizations, but it starts with contracting. The second piece is getting our team out there early with the TDAPA rules. We apply for TDAPA and in our case, nine months later, we received TDAPA.
We had nine months to create awareness and talk about the benefits of the product in the marketplace. Folks were ready to go or physicians were ready to prescribe early on. As we look at what we've done initially, we continue to grow the body of evidence. Our label is a broad label. The clinical differences between Vafseo and the GSK product are meaningful. They had a warning and precaution against using the product in patients with a history of heart failure. 40% of dialysis have a history of heart failure. We do not have that warning and precaution in our label. There are differences. No two HIFs are created equal. We believe our clinical profile is better suited for the marketplace.
Excellent. That's great. It's good or bad, right? On one side, you don't have a competition and then you have therapy. On the other side, people are always, for the investor side, we don't have validation for this market, how likely you're going to have the novel mechanism, novel therapy going to capture in this market because it's a well-established market. That's okay. That's dynamically understood. Maybe just take a step back on the molecular level. You say something the label is differentiated or advantage compared to GSK. What drove that for Vafseo to get that type of label? Do you think the molecular is better than the other HIF inhibitor?
Yeah, and you're asking the commercial guy a very scientific question, right? Again.
Yeah, there are no HIFs aren't created equal. Our molecule is very different from whether it be GSK's molecule or even Roxadustat. That was the product that didn't get approved. We've seen that where our product has a more gentle rise in hemoglobin than those other products done, probably due to the characteristics of the model. Am I going to be able to tell you what those characteristics are?
Probably not.
Yeah, no, as you talk with physicians, a lot of people, they also don't care about why it is different, but at least you have some rationale. Okay, the label is the result, and then I tell you a little bit about why the mechanism can drive this result. I think the gentle rise of the hemoglobin is one of them, right?
Okay, good.
Maybe just looking ahead, we try to also look down the road what the other things potentially can emerge. In your knowledge, and then what's in the pipeline for this population, both DD and NDD, and then anything really you will keep eye on this.
Is this with respect to Vafseo in that competitive landscape?
Yeah, Vafseo competitor for DD-CKD and NDD-CKD, anything in the pipeline emerging?
Yeah, we don't see anything out there in a competitive landscape standpoint in terms of a competitor for whether it's dialysis or non-dialysis. Obviously, the market is currently a majority of ESAs or erythropoiesis- stimulating agents. We don't see anything beyond what the current therapies are.
Okay, got it. The advantage you compare to the ESA and then other current standard of care is really the product profile tries to be a more gentle rise and then the benefit of the label.
It's really the mechanism of action. When we think about a HIF-PH inhibitor, what you're really doing is trying to help the body's normal physiological process start to work again. Whereas with an ESA, you're really putting in synthetic ESA or erythropoietin into the system. You're not helping the body do what it's meant to do. We believe that mechanism of action is one of the things that physicians are very interested in understanding versus an ESA. One of the compelling data points is mechanism of action.
Got it. Okay, great. Maybe we can move on to you have another product and then maybe some of the early pipeline. So for AURYXIA so you have a pretty strong 1Q sales, so it's a bit better than our model. And then tell us what drove that, and then also we understand this generic is coming, and then what should we expect in the coming quarter and then year?
Yeah, you're right. AURYXIA did have a fairly strong Q1, about $44 million in revenues, which was comparable with Q4. We typically see a drop-off from Q4 to Q1, and it was actually up for the quarter on a year-over-year basis. As you recall, AURYXIA lost IP exclusivity towards the end of March. There is an authorized generic. However, there's yet no incremental generic entry into the field thus far, although we do expect that it will eventually happen. In terms of that performance that you referenced, there was a move to put phosphate binders into the bundle this year at the beginning of 2025, which altered the distribution channels. We're actually contracting directly with the DOs now versus with the distributors before. I think those dynamics may have come into play in Q1 as well.
I don't know, Nick, if you want to expound on that a little bit.
Yeah, I mean, we do a little bit of a chest pound around having 100% of dialysis patients contracted on Vafseo. That's also true for AURYXIA. And so having broad uses in AURYXIA is one part of physicians like the profile of AURYXIA clinically, but they also have access and reimbursement for a product broadly. So they can actually write it broadly. As we move forward with the AG, just to add to Erik's comments, is we provide them a limited quantity of the product. It's not enough product to utilize for the whole market. In other words, until a second generic comes on play, there's always a significant value in the brand.
Okay, yeah, okay. That's interesting. Maybe how should, and then my second part of the question is how should we expect for AURYXIA in the coming quarter? Because you say you limited the supply, would you be able to tell us what's the qualification of that?
Yeah, I mean, I would say you're thinking about it in your modeling. I'll tell you how we think about it. We model fairly conservatively on AURYXIA going forward. That said, the longer there is a delay in incremental generic competition, that's upside for us from a cash perspective.
Yeah, and then when that second generic comes on, it'll be your typical generic erosion curve. Again, every day I check my email that nobody's been approved is the day that I do the wipe the sweat off my brow because AURYXIA continues to add value for the company.
Yeah, I think we model conservatively, and then just that's the upside case. Every day you don't have another generic. AG seems to be limited supply in any way, right? You see limited, and how should we think about the limitation?
Yeah, we haven't guided on that at all. It varies from quarter- to- quarter.
All right, good. We have a couple more minutes. You have a couple early pipeline, which is absolutely not in anybody's model or anybody's radar. But seems a big market when I look at those mechanisms and the market opportunity. So tell us a little bit more, and then maybe we will talk more in the future.
Yeah, no, thanks for bringing that up. Today is no different. We often find ourselves spending so much time on the near-term opportunities in front of us that there is not as much time to talk about the pipeline. That does not mean that we are not super excited about it. We really think there is a lot of promise beyond NDD, which we talked about already. Just to note a couple of those programs. One is in AKI, acute kidney injury. We are planning to advance that into the clinic this year, so in a phase I. It is a large market opportunity. Really excited as well about our program in ROP, retinopathy of prematurity. This is a rare disease, as the name implies. This is outside of renal.
This is an ocular disease, but it's one in which we feel that our HIF-based technology could be very well suited to address. There is a lot of passion for that indication as well within the company.
Excellent. Okay, maybe tell us about the cash financial position, and then you have top line revenue, and then also you have a couple of things in the development. How should we think about the cash runway and then the position?
Yeah, we feel really, really good about our financial position. We ended Q1 with $113 million in cash on the balance sheet. We have talked today about the revenue dynamics. Vafseo is off to a nice start. We have talked about AURYXIA as well. From an expense perspective, I think we have shown that we can manage expenses quite prudently when we talk about our cash runway guidance. We are financed to profitability. We take into account this pipeline activity that we have talked about today. One thing I would just add that from a financial perspective, I think benefited us with the launch is that we did not need to incur a sales force scale-up ahead of the Vafseo launch. The AURYXIA sales force was in place. The call point overlap between AURYXIA and Vafseo is 90% +. That was really a great benefit to us as well financially.
That's true. And then clarify your OpEx, your finance for profitability, but also you have a large phase III NDD trial upcoming. So is that also in the?
That is included in that guidance, yes.
Excellent. Great. All right, I think our time's up. Thank you for being with us this early morning. Thank you everyone for listening.
Great, thanks for having us.
Thanks for having us.