Akebia Therapeutics, Inc.

Good day and thank you for standing by. Welcome to the QVS third quarter 2021 financial results. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. And to ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, simply press star 0. With now, I would like to hand a conference over to our first speaker, Mercedes Carrasco. Thank you, and please go ahead.

Thank you, and welcome to Kibia's third quarter 2021 financial results and business updates conference call. Please note that a press release was issued on Thursday, November 4th, detailing our third quarter financial results, and that release is available on the investor section of our website. For your convenience, a replay of today's call will also be available on our website shortly after we conclude. Joining me for today's call, we have John Butler, our Chief Executive Officer, Dave Spellman, Chief Financial Officer, Del Falkingham, Chief Commercial Officer, as well as Dr. Stephen Burke, our Head of R&D and Chief Medical Officer, who will be available for questions. Before we begin, 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 November 4th, 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. The forward-looking statements on this call speak only as of the original date of this call and, except as required by law, we do not undertake any obligation to update or revise any of these statements. With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks, everyone, for joining us today. Well, today we're within five months of the PDUFA target action date for Vatadustat. Our investigational hypoxia-inducible factor, prolohydroxylase inhibitor, or HIF-PHI, currently under review by the FDA for the treatment of anemia due to chronic kidney disease in adult patients, both on dialysis and not on dialysis. As a reminder, Vatadustat is not yet approved. Any discussions or comments we'll make about the potential of Vatadustat are subject to its regulatory approval. We have a tremendous opportunity. to bring a potential first-in-class product to market, a novel oral therapeutic for people living with this disease. And approval has the potential to be a pivotal catalyst for Akibia, and importantly, a step towards delivering on our purpose to better the lives of people impacted by kidney disease. That is what motivates our team, and we're excited about the momentum we've gained as we prepare for launch. Developments over the past quarter continue to increase our confidence in a path for approval and launch success for Vatadustat, including the FDA's completion of our mid-cycle review and release of additional global phase 3 data for Vatadustat during ASN Kidney Week, which just completed this weekend. Our team has also made significant progress preparing for successful launch. including our medical team's efforts to educate physicians, payers, and dialysis organizations about anemia due to CKD and Vatadustat. We're excited about Vatadustat's potential to be the first in class HIF-PHI in the U.S. This is a much larger market opportunity than we anticipated just a few months ago. Of course, we believe Vatadustat can have a significant impact globally as well. The product was launched by our partner, MTPC, just over a year ago in Japan. We're encouraged that the HIF-PHI share of the anemia market continues to grow in Japan, along with Vafcio market share, and that more physicians in Japan have stated an intention to prescribe HIF-PHIs over erythropoiesis stimulating agents, or ESAs. We're proud to have worked closely with our collaboration partner, Otsuka, on the European marketing authorization. which was submitted last month to the European Medicines Agency. We will continue to support Otsuka as the EMA begins the review process. We continue to explore development opportunities for Vatadustat. University of Texas helps ongoing investigator-sponsored study of Vatadustat as a potential therapy to prevent and lessen the severity of acute respiratory distress syndrome, or ARDS, in adult patients who've been hospitalized due to COVID-19 continues to progress. With the support of their data monitoring committee, UT Health has decided to expand their study beyond the initial 400 patients, an enrollment target they've now surpassed. We look forward to updating you on this study when UT Health completes it. Right now, we are focused on preparing for a successful launch of Atadustat as a treatment for anemia due to CKD, as our PDUFA date is fast approaching. In a moment, I'll ask Del to share some details on our launch preparation. But first, let me share a few words on the market opportunity and our data. I'd like to start with the big picture opportunity. There are approximately 560,000 dialysis patients in the United States, and approximately 90% are being treated with ESAs to manage their anemia. The dialysis data from our phase three program are clear and consistent. We feel very confident that these data support an approval for this patient population. Our phase three data demonstrated that once daily dosing of Atadustat increased hemoglobin in a gradual and steady manner and minimized hemoglobin overshoots compared to darbopoietin alpha and ESA. In the MACE safety analysis, Atadustat demonstrated a hazard ratio of 0.96. with an upper bound of the confidence interval of 1.11, well below the agreed-to target of 1.25 in the U.S. and 1.3 in Europe. Our data published in the New England Journal of Medicine and additional data presented at ASN last week demonstrated no increased risk of thromboembolic events, seizures, or serious infections, and a rate of dialysis-axis thrombosis equal to that of darbopoietin. In the past, we've discussed the importance of home dialysis, which is the fastest growing segment of the market. Data on Vatadustat for treatment of anemia in patients with dialysis-dependent CKD receiving peritoneal dialysis was also presented at ASN Kidney Week. The data demonstrated the ability to titrate hemoglobin into the target range with fewer dose adjustments over time. The ability to dose Vatadustat once daily means PD patients won't have to come into dialysis centers regularly for infusions of ESA. The data presented showed that the safety profile of Vatadustat in patients with dialysis-dependent CKD receiving peritoneal dialysis was similar to what was seen in the overall dialysis program. Our data are encouraging and support the unique value proposition we believe Vatadustat offers, to both the growing number of home dialysis patients and to dialysis providers looking to better support these patients. The impact of anemia on all patients with CKD is significant. We believe in the potential of Vatadustat to help these patients. With U.S. approval, we'll have the potential to address the unmet needs of over half a million adult patients on dialysis and rapidly establish Vatadustat as the new oral standard of care for the treatment of anemia due to CKD. That represents a potential $2 billion market opportunity in the U.S. alone. We believe there are compelling data supporting a positive benefit-risk profile for the use of Vatadustat broadly in patients with CKD, including non-dialysis patients. We remain cautious about receiving a broad label for Vatadustat that would extend to non-dialysis patients with anemia due to CKD. However, we believe we've put forth a compelling and extensive data package in the NDA with respect to the non-dialysis population. We continue to be pleased with our engagement with the FDA and look forward to their decision in March. And with that, let me turn to Dell who will speak to our pre-commercialization activities.

Thank you, John. We are deep in commercial preparedness activities. And I'm pleased to share the picture of what we believe launch will look like if Vatadustat is approved. Today, we'll focus on the opportunity within dialysis. Although it's important to note that we are planning in parallel for the opportunity in non-dialysis as well. Our overall objective is to prepare for a successful launch that maximizes the Vatadustat commercial opportunity. Our team is energized by the potential to be first to market. As John highlighted, with a U.S. approval, we will have the opportunity to address the unmet needs of over half a million adult patients on dialysis. And we will seek to rapidly establish Vatadustat as the new oral standard of care for the treatment of anemia due to CKD. That represents a potential $2 billion market opportunity in the U.S. alone. Our cross-functional team, with support from our partner Otsuka, has developed a robust launch plan. We are investing in pre-commercialization activities aimed at addressing the unmet needs of patients on dialysis with anemia due to CKD, differentiating Vatadustat from the current standard of care, and providing broad access for all appropriate patients if Vatadustat is approved. Specifically, as we look to secure rapid adoption for Vatadustat, our distribution relationship with V4 Pharma will be critical. The agreement facilitates access to Fresenius Medical Care and certain other dialysis providers, which together treat up to 60% of U.S. dialysis patients. Additionally, Akibia already has a strong presence in the kidney community, and our nephrology-focused sales force is well positioned to engage with DaVita and other strategically important dialysis providers when appropriate to access the remaining 40% of U.S. dialysis patients. We believe that rapid adoption is also likely in the U.S. due to a reimbursement model unique to the dialysis market referred to as Tdapa. This is an add-on payment to the bundle that is intended to encourage adoption of innovative therapies by clinicians and dialysis providers. Our team is preparing for reimbursement for Vatadustat under Tdapa, which we anticipate will take approximately six months from regulatory approval to official Tdapa designation, and will extend for two years from the date of designation. Our leadership position in the kidney space has been established with Arixia, our current commercial product. We have an experienced team that knows the payers, healthcare providers, and patients. Our field team possesses deep insights related to the unmet needs of the CKD community. And this information has been beneficial in informing our Vatadustat launch plans as well as our view of what we believe to be a highly attractive commercial opportunity. Our commercial team is on the ready to support a second product and is a key component to a successful U.S. launch. With that, I want to recognize our team as they remain dedicated to kidney patients who have been disproportionately impacted by the COVID-19 pandemic. Revenue for Arixia continues to grow. We are encouraged with how the market views Arixia's strengths and applaud the commitment and tenacity of our team to find new ways to connect with customers and support patients. We continue to expect Arixia to deliver annual revenue growth for 2021, and again, believe this is an important foundation to support the successful launch of Vatadustat if approved. Now, I'll turn the call over to Dave to discuss our financial results.

Thank you, Del, and good morning, everyone. As John and Del mentioned, having laid the groundwork for potential approval, we're advancing pre-launch preparations for Vatadustat. We believe we are well-positioned with our existing commercial footprint and working to ensure appropriate commercial drug supply at the time of launch, subject to approval. Turning to our financial results for the quarter, starting with revenues. Total revenue is $48.8 million for the third quarter of 2021 compared to $60 million for the third quarter of 2020, reflecting lower collaboration revenue since we successfully completed our global phase three clinical development program for Vatadustat and are currently engaged in closeout activities with respect to the program. It is worth noting explicitly here that our collaboration revenue is directly tied to work performed on the Vatadustat program. Collaboration revenue is reduced because battery stat-related expenses have tapered. For Orixia, net product revenue increased 7% to $36.8 million for the third quarter of 2021, compared with $34.4 million for the third quarter of 2020. The Akiva team is very proud of the performance. This is a challenging market where COVID has caused increased mortality in the patients we serve. The growth is reflective of a higher net revenue per pill than previously realized over the last three years and includes some one-time true-ups that reflect what we believe is our current payer mix. Turn into expenses. You've all had some time to review our expenses, but a few items that are worth noting. We have prioritized our spend with expenses to build our supply chain and to invest in value creation initiatives, including work on our three-times-a-week studies for Vatadu's debt and and continued HIF-based research. We're able to cost-effectively prioritize this spend because of our already existing commercial footprint, thereby avoiding more significant supply chain build-out costs than most other biotechs without a commercial product would incur. As a reminder, consistent with the terms of our collaboration agreements, certain Vatadustat supply chain costs are shared across our partnerships. For our bottom line, net loss was $59.5 million for the third quarter of 2021 compared to $60 million for the third quarter of 2020. Regarding our capital position, we ended the third quarter with $207.2 million in cash-cash equivalents and available for sale securities. Our third quarter cash balance includes net proceeds of $16.1 million from sales of common stock under the company's at-the-market offering program. during the third quarter of 2021, which was previously disclosed. For clarity, there were no sales on the ATM between the filing of the second and third quarter 10Qs. We believe that our cash resources will be sufficient to fund our current operating plan through at least the next 12 months. Commenting beyond that would require guidance on battery stat launch revenues, which we are not prepared to provide at this time. On our last call, we provided clarification on future milestone payments to Akibia, which are worth repeating. Subject to the terms of our collaboration agreements with OTSUCA, Akibia has the right to receive milestone payments from OTSUCA upon the approval of Vatavustat in the U.S. and Europe. Given the tiered nature of these milestones, if Vatavustat succeeds in being the first HIF-PHI to be approved in the U.S., The U.S. regulatory milestones from OTSUKA are estimated to be up to $65 million. Additionally, there are significant potential sales milestones. As a part of our existing R&D funding arrangement with OTSUKA, up to 50% of these milestones may be used to offset our accumulated R&D pre-funding, which today stands at $100 million. Given that our partner OTSUKA has now filed their MAA in Europe, we should point out that we are eligible to receive up to $17 million in regulatory milestones, assuming no delays in the MAA review process. In addition, consistent with the terms of our license agreement with B4, Akebia has the right to receive $25 million in milestone payments upon U.S. approval of Batadu's debt and its inclusion in the prospective payment system or Tdapa, whichever is first. With that, we'll open the line to questions.

Operator?

Thank you. At this time, we would like to take any questions you might have for us today. And as a reminder, to ask a question, you will need to press star, then the number 1 on your telephone keypad. Once again, please press star 1 to ask a question. We'll pause for a moment to compile the Q&A list. This will only take a few moments. Our first question comes from the line of Chris Raymond from Piper Sandler. Your line is open. Please go ahead.

Hi. Good morning. This is Allie Brathlon for Chris this morning. Thanks for taking the question. So I guess just coming off the ASN meeting and some of the additional Vata-Dustat analyses presented there, what kind of feedback are you getting from the nephrology community on Vata's profile, maybe especially as it relates to comparisons to the Dapper-Dustat data set presented this weekend. I guess any color or characterizing of that feedback and how docs are viewing differentiation among HIFs would be really helpful.

Sure, Ali. Thanks so much for the question. Obviously, the DAPA-DU-STAT data was just presented this weekend, so I think it's early. It'll be very immediate kind of feedback, and I think, you know, as the New England Journal papers are out there and people digest them, we'll learn more. You know, I think generally speaking, you know, there was also a presentation at the ASN meeting from Spherics. Jennifer Robinson presented on physicians' reactions to HIF and their expectations around that. And, you know, I was really encouraged to see that I think it was almost 60% of physicians said they were probably or extremely likely to prescribe HIFs and fully 85%. you know, kind of fell into the expectation of prescribing at some point. So, you know, I think the concerns that were, you know, kind of felt around the ROPS DO-STAT data are starting to, people are seeing that there's differences between the products and that there's a path forward. And again, I think the DAPRA DO-STAT data really only serves to confirm that the issues seen with RoxDusat were not a class effect and that these products can be used safely. Quite frankly, I think that Dr. Dusat's data, for our part, gives us more confidence in our approval, certainly in dialysis, but with the non-dialysis data that they saw as well. Steve, did you want to make any other comments about that?

No, I agree. I think people are taking comfort in the Daprodustat data, and it supports our hypothesis that you can use these drugs safely if you appropriately target the hemoglobin.

Right. I mean, remember, the Daprodustat studies, they had a hemoglobin target of 10 to 11 across all of the patients. And remember, our non-dialysis studies, you know, the data that we've put forth to the FDA is that the U.S. population, where we did target a 10 to 11, you see a data set that looks extraordinarily like the overall data set for DAPRO-DU-STAT, where 10 to 11 was targeted. So once again, I think that supports our contention. And, you know, while obviously we've only seen, you know, what's been presented on DAPRO and dialysis, our own data, is incredibly strong there, and I think that, you know, this only kind of confirms what we've seen and, you know, gives us that much more encouraging path forward. And then when you think about the data we presented that I referenced in my remarks, those issues around imbalance in thromboembolic events, seizures, and serious infections that were really the center of the concern at the ADCOM We present the data now. Some was in the New England Journal papers, but now we presented that more discreetly. We just don't see that. So, you know, that gives us great confidence across the board.

Got it. Thanks, guys.

Thanks, Ali.

Our next question comes from the line of Alicia Young from Cantor Fitzgerald. Your line is open. Please go ahead.

Hey, guys, thanks for taking my questions. Maybe a couple for me. One, I feel like one of your competitors kind of recently said in passing that they suspect that they may have a conference. I'm sorry, a panel, but, you know, maybe that's conjecture on their part. I just wanted to kind of get your perspective and any kind of updated commentary you heard on your end. It sounds like you reiterated your confidence in not having one. And then a little bit more on DAPA, I guess, you know, with their trial, you know, kind of hitting a non-dialysis, does that change the kind of the calculus as you think about non-dialysis, even though, I mean, I know that this valuation is optionality, but just wanted to kind of get your perspective on that. And then as it relates to dialysis, I guess, the question is, you know, is now the V4 collaboration seems to have, will it kind of continue to lock in that potential share, even if there was another competitor to enter the market? Thanks.

Sure. On the first question on the panel, you know, I know that at this point we're the only HIF-PHI that's in front of the FDA. So, you know, while we are preparing for a panel and certainly open to one, you know, the FDA has not given us any indication that we'll have a panel. So, you know, we've said that we've expected one and would be ready for one, but I think the message from FDA has continued to be that, you know, you know, at this time, they don't expect a panel, which always allows them the opportunity to change their mind. So, you know, we'll just kind of wait and see as the review progresses. But the, so as I referenced in answer to the last question, a non-dialysis, actually the DAP-reduced data really encourage us, encourages us around our own path forward. You know, this is, you know, as I mentioned, what we've been saying is when you target a hemoglobin of 10 to 11, which is the target in the U.S., which we had for U.S. patients in our studies, recall outside the U.S. we targeted 10 to 12, and patients were generally managed to a higher hemoglobin level. In the U.S., we had a hazard ratio. If you looked at U.S. patients using age as a continuous variable, you had a hazard ratio of just over 1, 1.01, or 1.02, I think it was 1.01, with an upper bound at 1.22. So, you know, clearly not showing an increased cardiovascular risk. That result for Daprodustat really was confirmed, basically, in their overall population where they hit their primary endpoint. So, you know, for us, it really gives us that much more confidence that, you know, as FDA looks at this class broadly, that there isn't an elevated cardiovascular risk. And importantly, again, FDA is recognizing, if you saw the ROCS DUSDAT panel, they recognize that there is an unmet need here, that patients need treatment options. And that's what goes to this benefit-risk. The benefit of treating patients with a Vatadustat outweighs the risk. particularly when you go back and look at the things that it really focused on in the ROXA panel, which were thromboembolic events, seizures, and serious infections, where we simply didn't see any difference there. So, you know, we'll see. As I said, we're engaged with the FDA. It's ongoing. We're pleased by their level of engagement. But, you know, we'll continue to look forward to March 29th, I guess, is what it comes down to. And then with dialysis, yes, as I said, we had been planning to be second of three, and, you know, that was a rationale for the V4 deal. You know, now we're planning to be first of two, and that rationale doesn't change. And, you know, we think it's very important to have V4 to have access to those for seniors patients. I don't know, Del, is there anything you want to add to that? We think that's an important point. you know, opportunity for us.

Yeah, no, absolutely. We're excited about the market opportunity for Vatadustatin dialysis. And I think the access that V4 gives us to FMC and certain other dialysis providers does, you know, enable us to be the exclusive HIF in 60% of the U.S. dialysis patients. So we do think that's a real opportunity for us at launch, and we're excited about it.

And Alicia, as you mentioned, non-dialysis being kind of optionality, and I certainly wouldn't disagree with you there. We've talked about being cautious, though. We're very confident in our data. I think when you look at valuation today, dialysis isn't reflected, right? And this is, you know, approval and dialysis is not reflected. And this is a $2 billion opportunity that we get you know, to be in first for a year or more, depending on filing dates. So, you know, we think this is a phenomenal opportunity for us.

Great. Thank you for all the color.

Thank you.

Our next question comes from the line of Eric Joseph from J.B. Morgan. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking the questions. I just wanted to follow up on some of the commentary regarding pre-commercial activities, specifically how you anticipate any expansion of the cells or MSL teams to support beta-DUSAT in dialysis over what you're currently sized for with Eryxia and sort of what personnel support do you expect coming from Otsuka in the U.S.? And then, you know, Yes, there's the optionality in non-dialysis, I guess, you know, in order to kind of support expansion or launch in the non-dialysis segment. How should you think about Salesforce sizing there as well?

I'm sorry, Eric, that last part of your second question there faded out.

Sorry, how should, if you are approved in non-dialysis, how should you be thinking about Salesforce MSL sizing to support non-dialysis and sort of the contribution from Acadia versus Otsuka?

Great. That's one of the benefits of having a commercial organization already in place is we add that and do that, we're going to get great leverage from that organization. But Del, do you want to give a little detail there?

Absolutely. So, you know, as you know, we have an experienced nephrology-focused field team that's really established a strong reputation in the kidney market with Eryxia. And we think that this is really a key point of leverage as we move towards the potential launch of Vatadustat. Certainly, being first to market is an exciting opportunity. And as we've looked at the field force sizing and our current MSL and sales footprint, we really feel like we largely have the team here at Akibia to launch in dialysis. And even if you look at the opportunity in non-dialysis, if we receive approval in both indications, we still believe that the field resources needed are going to be incremental. And, you know, this is where our partnership with Otsuka would come in. We can leverage their existing commercial and medical footprints as well to make sure what we have, we have what we need to support the share of voice in the marketplace. This is one where we really feel like we're in a great position today, and we won't need to add a lot of infrastructure moving forward to create a successful launch.

Yeah, Otsuka has just been a great partner, and that's one of the things we're working on. Dell particularly is working on the detail around the who does what in the launch. But our sales force is focused on dialysis, and the Otsuka sales force is focused outside of dialysis. We're in a great position that if we get that expanded patient population, that we have access to those resources without having to build a larger team at all. So it really is a great position to be in. And I think as we kind of finalize some of those discussions with Otsuka around the detail, we'll be able to update you as we get closer to launch.

Thanks. That's very helpful. Just a follow-up, if I could, with respect to the milestones that you outlined in your prepared remarks. There's 65 million in the U.S. Is that considered approval in both dialysis and non-dialysis? Are certain milestones amounts tied to individual segments like this?

Yeah, Eric, it's a good question. So we had previously disclosed that 15 million of that is attached to dialysis, and 50 is attached to non-dialysis, and those are based on being the first HIF to market.

Okay, great. Thanks for taking the questions, guys. Thanks, Eric.

Our next question comes from the line of Serge Ballinger from Needham & Company. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking my questions. First one on the commercial prep for VEDA DUSAT, assuming you get approval in late March, maybe talk about your readiness for launch in terms of product supply. And since SADAPA is a key reimbursement aspect but is a six-month process, how does that play into the launch timing? And then secondly on the RIXIA, Maybe just talk about what has been driving recent growth and given the recent settlement with Generics, does that change your outlook for the product? Could we see additional investments now that you have clarity on the IP runway? Thanks.

Serge, thanks so much. Thanks for the questions. It's nice to welcome you to the call. So from a supply perspective, we have two API and two drug product suppliers for launch. So we made the decision to build redundancy into our supply chain early on. And so we are very comfortable that we'll have adequate supply available at launch for a very successful fast uptake within the dialysis range. market. Dale, do you want to talk about kind of the Tdapa process and the like?

Yeah, as you mentioned, we expect, you know, at regulatory approval to apply for Tdapa. As you said, we expect the process to take approximately six months. But we plan to launch in dialysis as soon as possible after regulatory approval. We don't anticipate waiting until the Tdapa period starts. You know, when you think about the opportunity to be first to market, we want to be out there focusing on educating on the unmet patient needs and the clinical data for Vatadustat and ensuring that we have all the operational details in place so that once dialysis providers begin to ramp, we'll be certainly ready to go there. Obviously, given that TdapA was created to encourage adoption of new therapies, we believe the timing of TdapA will be important as you think about our rate of adoption of Vatadustat in dialysis. Or said another way, we think that the revenue ramp for Vatadustat will certainly be linked to TdapA timing. So that's our plan for Vatadustat in dialysis. You know, as far as eryxia goes, you know, as I think most companies are experiencing, it's been a challenging market. The overall phosphate binder market is down and really is significantly due to the disproportionate mortality in this space. And, you know, and so that's been really difficult. And then certainly access to healthcare providers continues to be a challenge. But I think our team has really demonstrated, you know, some strong resilience and has adapted a hybrid approach to engagement where we're focusing more on multichannel and non-personal promotion. But overall, I think we're really proud of the job the team has done this year, given the market dynamics. You know, we expect the market to continue to be challenging. But we certainly believe we can continue to grow Erixia net revenue moving forward.

And I think the settlement, you know, the final end of settlement, which pushes out, you know, kind of gives us confidence in, you know, the market opportunity up till 3 of 25. you know, it's just a great opportunity for us to continue to grow the product. And just because, you know, that there's the ability for generics to enter the market in 2025 doesn't mean we don't think we can continue to have important business with Arixia, particularly given that phosphate binders could be moving into the bundle payment system, the PPS payment in 2025. That creates an opportunity for us long-term and having multiple products as part of that bundle gives us great opportunities as well. So it's great to have confidence that no one's entering before then, but we think that the area under the curve for quite a while will contribute significantly from a cash perspective. And just to clarify one thing I said, just for clarity, the supply that we have in place is comfortable for us with quick uptake in dialysis. But if we have both dialysis and non-dialysis, we're still in a comfortable position. We do expect to take the non-dialysis ramp will be slower than dialysis. But, you know, we've made sure we'll be in a supply position to support any speed of launch in both patient populations. Thanks, Serge.

Our next question comes from the line of David Lebowitz from Morgan Stanley. Your line is open. Please go ahead.

Hi, this is Avatar Jones. I'm for David this morning. A couple questions from us. The first is, how should we look at SG&A expenses over the next 12 months in the context of a potential new launch? And secondly, can you provide any color on developments for Medicare Part D reimbursement of Arixia and potential timelines for resolution there. Thank you. Dave, you want to handle SG&A?

Yeah, I think so. For SG&A, you know, like we've talked about a few times, we're, you know, very proud of the infrastructure that we've built, and I think that in terms of the team that we need to build to support a successful value-set launch, I think the team is largely in place, and that From an expense perspective, you'd really just be looking at some shared expenses that we would have with Otsuka to build the Vatavistat brand. But largely, from a personnel perspective, the team is in place.

And I think your second question was on the Medicare Part D coverage for Erixia. And I assume that was focused on the IDA indication where We didn't have coverage for, or don't have coverage for, for Eryxia. And you might have seen a few weeks ago, we put out an announcement that we did dismiss the lawsuit against CMS, where we were seeking coverage for the IDA indication. This was a very difficult decision for us to make. You know, we know that patients have a need to access this drug. You know, it's incredibly unfortunate that CMS disagrees that the product should be covered. Now, it's covered for dialysis patients for hyperphosphatemia. So that's, you know, which is by far the larger market opportunity for us. So we continue to grow in that space. But, you know, we've spent so much time and resources on the lawsuit. We didn't get the preliminary injunction. We made the very difficult decision that, you know, we were going to walk away from that. But we're not walking away from those patients or working to get coverage for IDA. And, you know, we're looking more on the legislative side where we've been engaging with members of Congress, and we have recently had legislation introduced to provide coverage for it. Obviously, there's still a lot of work to do to get to a to an answer for that. So we're not walking away from the opportunity. And then Dell and his team are working on ways to optimize access for the hyperphosphatemia population and continuing to grow that population. IDA was a small, much smaller part of the Eryxia revenue, and it's stayed that way, even though private pay patients can access the product for IDA. You know, we expect that until we find a legislative fix that it'll stay that. But as Del referenced earlier, we have the opportunity to continue to grow in hyperphosphatemia for some time, and that's where our focus is.

Understood. Thank you.

Our next question comes from the line of Ed Orser from H.C. Wainwright & Company. Your line is open. Please go ahead.

Thanks for taking my questions. A couple for me. Firstly, on the commentary around your sales footprint being largely in place right now and even just incremental investment would be necessary if non-dialysis were approved. Wondering in that regard, how many, if you could remind us, how many reps and MSLs and other sort of ancillary support staff in the overall sales and marketing teams do you have today? And perhaps also discuss the areas of training and readiness activities that would be going on ahead of the approval. And then secondly, I think there was a comment early on in the prepared remarks that the overall anemia market is much larger than expected even just a few months ago. I'm wondering if you could clarify that. What have you discovered and what exactly do you see now? Thanks so much.

Thanks so much for your questions. I'll take the second question and I'll pass it to Del for the first. The $2 billion market opportunity is still the size of the market opportunity, but a few months ago, we were expecting to be the second product to the market. The opportunity to be the first product to the market and have that opportunity to introduce the first in class HIF-PHI is an opportunity we're not expecting. I haven't been expecting for the last eight years. We've been expecting to be second. That's how we've been planning. First to market with We think at least a year or so of a head start over a second entrant is a really great opportunity for us and a much larger opportunity than we had been considering. And Del, maybe you can talk about the footprint and training readiness.

Absolutely. So currently, we have a commercial team of 140 people. And of those, we have about 110 field-based employees. So our sales... and our access teams. The medical team, which reports into Steve, has about 13 MSLs plus a small management team. So that's the group that right now is working with Arixia and will be able to support the launch of Vatadustat, certainly in dialysis and largely in non-dialysis as well. As we mentioned, if there are any incremental resources that we need to launch in non-dialysis, that's where we're working out the details of that with our partner, Atsuka, and it's great to have that partnership in place to be able to do that. As far as readiness materials or readiness activities, I should say, The team is really working across the different functions to make sure that we'll be ready at our PDUFA date to launch in full. Certainly from a marketing and a sales training perspective, our market access team has started to have pre-label interactions, and certainly our medical affairs team is talking about education around the space. We certainly feel like we're in full pre-commercialization and pre-launch activities. We'll be ready to go at approval with the full team.

Yeah. I mean, before we have an approval, the commercial team is very limited in what they can do. But the medical affairs team, you know, the idea of educating nephrologists on HIF and the mechanism, the challenges of anemia management. Now, those are incredibly important as we run up towards launch. Of course, if physicians are interested in learning about Vatadustat data, the medical team can educate them on that as well. And it's critically important, particularly given the data sets of three different products that are out there, clarifying those differences is really going to be critical for launch success.

Great. Thanks so much. Thanks, Ed.

Our next question comes from the line of Bert Hazet from BTIG. Your line is open. Please go ahead.

Yes, thanks. Congrats on all the progress. Apologies that this has been addressed a little bit. I've been jumping around calls this morning. It's been a busy morning. But just with regard to the SUPA application in Europe, first of all, do you have any sense of timing in terms of the, not only the application itself, but the reimbursement process in Europe? And then secondly, do you expect them to be addressing the same types of issues with regard to dialysis and non-dialysis data and patients that we discussed in the U.S.? Thanks.

Bert, thanks so much for the question. So the application was submitted and has been validated. Generally, the timing is a 12-month review for Europe. So that's the assumption that we're working on. Del, you want to maybe talk about the reimbursement? I mean, it differs in different countries, but...

Yeah, absolutely. I think that the reimbursement structures are quite different in Europe, and because of the regional differences in treatment and patient characteristics, really looking at Europe more on a country-by-country basis. Certainly, we would expect the larger countries to you know, to be the most important for launch and some of them to be the earliest to reimburse, you know, typically UK and Germany are on the earlier side of European launches with France and Italy and Spain to follow sometime after. But there'll be an individual by country process once we receive approval. So we'll certainly update you more as we learn more.

And from an issue standpoint, obviously, we haven't really, or Otsuka will be leading the discussions with the EMA. So, you know, we don't know exactly where their focus will be. But, you know, I certainly have an expectation that, you know, they'll look at some of the same issues. I mean, I think it's important to note that Rastustat was approved and labeled in Europe, you know, with the challenges that they've had. They've labeled around those. So, you know, when I think about our data package kind of in its totality, I think we, you know, we feel very confident in certainly in dialysis again, and maybe more than, you know, or also we have confidence in the non-dialysis data in Europe as well. So, but again, very, very early days there. Terrific. Thank you very much. Thanks, Bert.

And there are no further questions at this time. John, please continue.

Thanks, Myra. This is a busy and exciting time at Akibia. Now, Vatadustats approved in Japan, the MAA has been submitted to the EMA, and Vatadustats is late in its FDA review process with the PDUFA date set for March 29th of next year. Our focus remains on preparing to bring to market a novel oral therapeutic for people living with anemia due to chronic kidney disease. We remain confident in Vatadustat's potential as a first-in-class treatment for anemia due to CKD in dialysis patients, and we look forward to engaging and continuing to engage with the FDA in the review of our NDA, and we look forward to updating you on our progress.

Have a great day.

This concludes today's conference call. Thank you all for participating. You may now disconnect. Have a great day.