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Operator
Thank you for standing by. Welcome to the Akibia's first quarter 2023 financial results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1-1 on your phone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Ms. Mercedes Carrasco, Senior Director of Investor and Corporate Communications. Ms. Carrasco, please go ahead.
Mercedes Carrasco
Thank you. And welcome to Ikebia's first quarter 2023 financial results and business updates conference call. Please note that a press release was issued earlier today, Monday, May 8th, detailing our first quarter financial results and that release is available in the investor section of our website. For your convenience, a replay of today's call will be available on our website after we conclude. Joining me for today's call, we have John Butler, Chief Executive Officer, and Dave Spellman, Chief Financial Officer. I'd like to remind everyone that the call includes forward-looking statements. Each forward-looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Additional information describing these risks is included in the financial results press release that we issued on May 8th, 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 obligations to update or revise any of these statements. With that, I'd like to introduce our CEO, John Butler.
John Butler
Thanks, Mercedes, and thank you all for joining us. I want to begin today by recognizing an exciting milestone that's been years in the making. Last month, the European Commission granted marketing authorization for Vafseo, Vatadustat, approving the product as a treatment for symptomatic anemia associated with chronic kidney disease in adult patients on dialysis. The headline here is that Vataducet is now approved in 32 countries. We're extremely proud of this accomplishment and are eager to bring Vafseo to market in Europe and beyond, delivering an additional oral therapeutic option to patients on dialysis with anemia. To that end, I'll note that our priority in Europe is to quickly complete a partnership with a company that truly understands the complexity of the dialysis market across Europe and who will make Vafseo a priority for the more than 325,000 dialysis patients across Europe who are currently treated for anemia due to CKD. We're running a very active process, and we look forward to announcing our partner, then collaborating with them to support a launch of AFSEO in Europe late this year. Again, the approval was an important catalyst for Akibia, and it would not have been possible without our dedicated team. If you recall, we assumed responsibility for the marketing authorization application last summer, and we worked to remain on track for approval. I'm proud of the team's demonstrated commitment to patients and to Akibia. I'm also grateful for the patients, physicians, investigators, and site coordinators who participated in our clinical trials that led to the approval. In the U.S., our work towards a potential approval for Vatadustat continues, as we remain engaged with the Office of New Drugs, or OND, on our appeal to the Vatadustat Complete Response Letter, or CRL. Last quarter, we met with Dr. Peter Stein, Director of the Office of New Drugs, and the deciding authority on our appeal. Since that time, Dr. Stein indicated he has completed his internal discussions with experts within the OND, and we anticipate a response within the next 30 days. We continue to believe in the potential benefits Vatadustat can deliver as a treatment for anemia due to chronic kidney disease, and we believe in the overall market opportunity for that indication. In fact, last month, we announced positive top-line results from FOCUS, an alternate dosing study evaluating the efficacy and safety of Vatadustat in hemodialysis patients who were converted from a long-acting erythropoiesis stimulating agent, or ESA, to three times weekly oral Vatadustat dosing for the maintenance treatment of anemia. The data demonstrated that Vatadustat met the primary and secondary efficacy endpoints and was non-inferior to an ESA in the treatment of anemia due to chronic kidney disease in patients on hemodialysis when used three times a week at the time of dialysis and with a comparable safety profile to the current standard of care. We believe the positive top line results are important because if Vataducet is approved for this dosing schedule, a three times weekly dosing schedule aligns with in-center hemodialysis visits, ensuring patient compliance. Again, I want to extend our sincere appreciation to everyone involved in this study, as it was a significant undertaking, and we are very pleased with the results. You'll recall we're also working with UT Health evaluating Vatadustat as a treatment for acute respiratory distress syndrome, or ARDS. Since our last update, I'll confirm that we continue to work with UT Health to design and initiate an adequate, well-controlled study in a broad ARDS patient population, and we expect to enroll patients this year. As strategic business decisions and our team's adherence to our strategic focus has enabled us to live up to our purpose to better the lives of people impacted by kidney disease. We know there are many potential catalysts ahead in the near term, and we look forward to reporting on them as we continue to execute against our strategic plan. And with that, I'll ask Dave to talk more about our quarterly financials.
Akibia
Thank you, John, and good morning, everyone. I'd like to begin by addressing Arixia Revenue. It's important to note that we are affirming our annual net product revenue guidance of $175 to $180 million. While last quarter we noted a significant increase in channel inventory, this quarter there was a significant move against us with a large reduction in Erixia inventory at our selling partners to the tune of approximately $5 million. Erixia net product revenue in the first quarter of 2023 was $34.8 million compared to $41.4 million in the first quarter of 2022, a 15.9% decrease. We anticipate that with current contracting dynamics, quarterly performance will be a little bit bumpy. We are realizing a higher net price per tablet, approximately 80% higher than three years ago. As a result, changes in inventories in the channel are now much more apparent. Cost of goods sold decreased versus the same period in 2022. We are now what I would call at a normal, cost of goods for Eurexia, which will include the $9 million quarterly non-cash Eurexia intangible asset amortization cost through Q4 of 2024. Next, I'll review operating expenses, an area I believe that our team has performed extremely well. In the first quarter of 2023, we realized a nearly 50% reduction in operating expense versus the first quarter of 2022 and a nearly 30% reduction from the fourth quarter of 2022. Our team has been diligent in its efforts to manage spend and sustain a reduction in operating costs. Rather than diving into the comparisons, I believe it would be valuable to remind folks of the actions we have taken over the last 12 months while working diligently to further reduce our overhead. Some of those actions and accomplishments include reducing our headcount by more than 55% from Q1 of 2022, reducing external spend on several support functions, occupying less office space, winding down of historical clinical programs, reduction of contractors and consultants, and a reduction of our supply chain commitments to better reflect our current needs, as well as other important activities, while still having several value creation activities ongoing, supporting our third strategic pillar. As for cash, with our continued execution of our plan, our cash and Erixia revenues will allow us to fund our business for at least the next 12 months. We ended the quarter with approximately $57 million in cash on hand. Our debt position has been reduced to $51 million, a 24% reduction from the end of the year. We have significantly reduced our current liabilities. I also want to address our stock price and NASDAQ listing. As many know, we have been out of compliance with NASDAQ's minimum bid price rules for over a year. In an effort to regain compliance earlier this year, we filed proxy materials proposing amendments to our charter, including a proposal to affect our reverse stock split of our outstanding common stock. The primary purpose for affecting the reverse stock split was to increase the per share trade in price of our common stock so as to regain compliance with the minimum bid price rule and maintain the listing of our common stock on NASDAQ. Unfortunately, the proposal did not pass, and we anticipate that we will receive a delisting notice imminently. While we plan to appeal the delisting, NASDAQ is under no obligation to accept the appeal, and there could be no assurance that the appeal will be successful. Per NASDAQ rules, the only way to maintain a listing upon completion of the appeal process is to trade over $1 either organically or through a reverse split for no less than 10 consecutive business days. As such, if our stock does not organically regain compliance during the appeal process, we currently plan to file a new proxy statement seeking approval of a reverse stock split. We appreciate that the majority of our voting shareholders supported the reverse stock split proposals at the special meeting and find value in maintaining the NASDAQ listing. In the meantime, we continue to operate our business as usual and recognize the value that could come from potential near-term catalysts. We are extremely proud of our business progress over the last year since we established our new strategic pillars. I'd like to close with a recognition of all the Akibians who have got us here. With that, we'll open the line for questions. Operator?
Operator
Thank you. As a reminder, to ask a question, please press star 11 on your phone and wait for your name to be announced. To withdraw your question, please press star 11 again. Standby has been compiled the Q&A roster. One moment please for our first question. Our first question will come from Alison Bratzel of Piper Sandler. Your line is open.
Allie
Hi, thanks. Good morning and thanks for taking my questions. So first, just on the Vatadustat FDR process, could you just help us understand the communication you've had with FDA on that process, at least to the extent that you can? And just clarify, when did the 30-day clock start, or just what gives you confidence you'll get an answer from Dr. Stein within 30 days? And I have a couple follow-ups.
John Butler
Thanks, Allie. So we've been in regular contact. We mentioned that we had a formal type A meeting with Dr. Stein last quarter. And there's been regular communication with the project manager as there normally is during an FDA review. And so we expect to have an answer from Dr. Stein within 30 days. but recall that it's also possible that he'll ask more questions and extend it another 30 days. We don't think that's where it's going to go, but we don't really have insight into what that next communication will say. While we believe that he has the information he needs to make a decision, and of course, we feel strongly about where that decision should go, we don't really have any insight into what that communication is going to be. So we're looking forward to seeing that. And of course, I'm sure there'll be ongoing communication over the next 30 days as well, just that regular course of business.
Allie
Got it. And then just on the EU partnership, can you just help us understand what kind of partnerships could be on the table there and just how those discussions have progressed now that you have the approval in hand in Europe and any kind of clarity or visibility on timing there for a partnership. That would be helpful. Thanks.
John Butler
Sure, Allie. It is a very active process now. Obviously, You know, we've been saying all along, you know, having the CHMP vote was important, but, you know, having the approval in hand and knowing exactly what's in the label, et cetera, you know, really has accelerated that. It is, I guess at the end of the day, you know, you can expect a pretty typical type of transaction would be my guess at this point. I think the important thing is the indication is in dialysis, and dialysis is a complicated market. And so finding a partner who really understands that market opportunity, and again, I mean, it's a European approval, but every one of those European markets is different, and dialysis is different within each one. So that expertise is really important, and we're weighing that heavily as we weigh between you know, the options that we think we have for a partnership. So, you know, again, it's the kind of thing we want to move quickly because, you know, we want to launch the product as quickly as possible and we're anticipating that before the end of the year. But, you know, we want to be very deliberate and pick the right person who's going to maximize the value in the long term.
Allie
Got it. That's helpful. And then this last one from me, just on the focus trial data, can you kind of walk us through the importance of that, the three times weekly, that dosing, and maybe what venue we could expect to see full data presented or published at? Just seems you'd want to get that data out to docs pretty quickly. Thanks.
John Butler
Yeah, that's exactly right. I mean, as you know, dialysis is delivered three times a week. hemodialysis in center. We know that home dialysis is going to be an important market for VEDA. We've talked about that from the beginning, and the once-a-day oral dosing for VEDA is quite important there. But hemodialysis is still a dominant way of delivering dialysis, both here and in Europe. And having the option for dialysis providers to basically give the patient their pills while they're on dialysis just simplifies things for everyone, for the dialysis providers and for the patients who are ensuring their compliance. And particularly in the US, when you think about PDAPA and the fact that the dialysis providers are buying the Vatadustat, will be buying the Vatadustat if we're approved, they want to ensure that the drug is being taken by the patient. And, you know, so we think that three times weekly dosing is quite important. And as you referenced, we want to try to have that data be available as quickly as possible. So, you know, I know that there's a manuscript that's being worked on. And, you know, of course, the meeting you generally will present data at will be the ASN meeting. So we certainly don't know whether the data will be presented there yet, but that would be my expectation.
VEDA
Okay, got it. Thank you.
Operator
Thanks, Ali. Thank you. One moment, please, for our next question. Our next question will come from Ed Arcee of HC Wingright. Your line is open.
Ali
Hi, good morning, everyone. This is Thomas here asking a couple questions for Ed. Just perhaps the first question regarding the FDRR process, as you alluded to, and the response expected within 30 days. Just internally wondering what would you consider to be the best and worst case scenarios, and would you be open to file another round of FDRR if needed?
Thomas
Thomas, thanks for the question.
John Butler
So, you know, we've kind of described in the past the, you know, what the potential outcomes are for the process. I think those very much hold. You know, I suppose the worst case scenario is that our appeal is denied and we're referred back to the division. You know, that would be... Again, there probably wouldn't be a path forward for Vatadustat in the US with that outcome. Obviously, that's not the one we're hoping for. The clearest positive outcome then is that the appeal is granted. Remember, this isn't an approval. It's an appeal process. So if the appeal is granted, then we refile the NDA and the division has either two or six months, depending on whether they make it a Type 1 or 2 submission, to review the product again, and then that leads to the approval. You know, with an approved, a granted appeal, I mean, your likelihood of success is extraordinarily high. The other, the third option would be an appeal that's denied but an identified path forward. And, you know, from our perspective, that is almost as good as an appeal granted, right? FDA is giving you, Dr. Stein is giving you a clear path forward for approval. And, you know, we've talked before, maybe that's, you know, holding an adcom that we think that's probably unlikely. Maybe it's, you know, some other, something else he puts forward as, you know, something that allows you to get an approval, something short of more clinical data, right? So it's something, an analysis you have, a REMS program, something else that he says, you know, this will give you a path to approval. And that's a very common outcome, as we've learned from, you know, these FDR processes.
Ali
Thank you so much for laying out all the scenarios. We appreciate it. Perhaps one other question from us. switching gears to Arixia. You mentioned in the press release beyond the loss of exclusivity that's anticipated March 20th, 25th. What are some possibilities to keep that market going? Can you discuss? Thank you.
Thomas
Yeah, no, it's a great question. Thank you.
John Butler
So right now, the expectation in dialysis, remember where Arixia is used is is to treat hyperphosphatemia in dialysis patients. Right now, CMS is expecting to add phosphate binders, all oral products that aren't part of the bundle already, to the bundle as of January 1st of 2025. And what they've said in their last rule is that they're going to have a TdAPA period for these oral products. Because right now, they don't have the data to know what to add to the bundle payment. So if you use the calcium memetics as an example, you know, the Amgen product, they went through their Tdapa period a few years ago. And, you know, you go from being a Part D drug to a Part B drug. CMS collects all of the data on utilization of the product. And then at the end of the Tdapa period, they make a determination for the dollars per dialysis session that they'll be adding to that bundled payment. And so that's what we expect them to do, looking at the different binders, the utilization of each. So for, you know, when you think about this from a dialysis provider's perspective, you know, there's great incentive to, you know, A, treat patients very effectively, so really focus on the treatment of hyperphosphatemia, and frankly, focus on the use of branded products within that. in order to maximize the value of that payment that's added. Because once that's added, it doesn't change. CMS doesn't feel they have the ability to go back and look at that payment again. So for those two years, and that's the TDAPA period that's been defined by CMS at this point in time, so 2025 and 2026, there's a real motivation for them to utilize products like Arixia and utilize the branded products. So we'll have to contract directly with the dialysis providers and work with them on their protocols, et cetera, so that they're utilizing the product. So it's unlike a situation where you simply lose exclusivity and generics come in to dominate the market. We think that there's more opportunity there. Now, even if we get to a situation where we didn't have TdapA, given the nature of these phosphate binders, if you look at Sevelamer, Renogel Renvela as an example, even though they lost their patents, The dynamics, the generic dynamics of the amount of product that has to be delivered to a patient is such that there wasn't really significant interest from generic manufacturers to bring the product to market. So they had a very, very long tail on Sevelimer. And if we see something like that, either through Tdapo or through kind of the normal course, there's very significant revenues still. It'll be a declining revenue stream, to be clear, but one that will need very little sales and marketing investment. So, you know, significant opportunity for positive cash flow for the company.
Ali
I understand. That makes sense. Thank you again for taking our questions, and really looking forward to the FDOR response.
spk08
So are we. Thanks, Thomas.
Operator
Thank you. This will end the Q&A portion of the conference. I would now like to turn the conference back to John Butler for closing remarks.
Thomas
Thanks, Chris.
John Butler
And thank you all again for joining us this morning. And it's hard not to reflect on the progress we've made over the past year since receiving the CRL. And we've negotiated an exit with Otsuka that brought $55 million in cash and secured significant global rights. We've continued to drive Arixia, allowing us to run the company on Arixia revenue plus our cash on hand. We've completely changed the cost structure of the company. We've worked through the FDR process with the FDA. And most importantly, to date, we took over the European filing and led Vatadustat to be approved in Europe. We have what may be even more important milestones ahead in the next month, and I really look forward to discussing those with you in the near future. Thanks, everyone. Have a great week.
Operator
This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.
spk00
Thank you. Thank you. Thank you.
Operator
Good day, and thank you for standing by. Welcome to the Akibia's first quarter 2023 financial results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 11 on your phone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded, and I would now like to hand the conference over to your speaker today, Ms. Mercedes Carrasco, Senior Director of Investor and Corporate Communications. Ms. Carrasco, please go ahead.
Mercedes Carrasco
thank you and welcome to ikebia's first quarter 2023 financial results and business updates conference call please note that a press release was issued earlier today monday may 8th detailing our first quarter financial results and that release is available in the investor section of our website for your convenience a replay of today's call will be available on our website after we conclude joining me for Today's call, we have John Butler, Chief Executive Officer, and Dave Spellman, Chief Financial Officer. I'd like to remind everyone that the call includes forward-looking statements. Each forward-looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Additional information describing these risks is included in the financial results press release that we issued on May 8th 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 accept 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.
John Butler
Thanks, Mercedes, and thank you all for joining us. I want to begin today by recognizing an exciting milestone that's been years in the making. Last month, the European Commission granted marketing authorization for Vafseo, Vatadustat, approving the product as a treatment for symptomatic anemia associated with chronic kidney disease in adult patients on dialysis. The headline here is that Vatadustat is now approved in 32 countries. We're extremely proud of this accomplishment and are eager to bring Vafseo to market in Europe and beyond, delivering an additional oral therapeutic option to patients on dialysis with anemia. To that end, I'll note that our priority in Europe is to quickly complete a partnership with a company that truly understands the complexity of the dialysis market across Europe and who will make Vafseo a priority for the more than 325,000 dialysis patients across Europe who are currently treated for anemia due to CKD. We're running a very active process, and we look forward to announcing our partner, then collaborating with them to support a launch of AFSEO in Europe late this year. Again, the approval was an important catalyst for Akibia, and it would not have been possible without our dedicated team. If you recall, we assumed responsibility for the marketing authorization application last summer, and we worked to remain on track for approval. I'm proud of the team's demonstrated commitment to patients and to Akibia. I'm also grateful for the patients, physicians, investigators, and site coordinators who participated in our clinical trials that led to the approval. In the U.S., our work towards a potential approval for Vatadustat continues as we remain engaged with the Office of New Drugs, or OND, on our appeal to the Vatadustat Complete Response Letter, or CRL. Last quarter, we met with Dr. Peter Stein, Director of the Office of New Drugs, and the deciding authority on our appeal. Since that time, Dr. Stein indicated he has completed his internal discussions with experts within the OND, and we anticipate a response within the next 30 days. We continue to believe in the potential benefits Vatadustat can deliver as a treatment for anemia due to chronic kidney disease, and we believe in the overall market opportunity for that indication. In fact, last month, we announced positive top-line results from FOCUS, an alternate dosing study evaluating the efficacy and safety of Vatadustat in hemodialysis patients who were converted from a long-acting erythropoiesis stimulating agent, or ESA, to three times weekly oral Vatadustat dosing for the maintenance treatment of anemia. The data demonstrated that Vatadustat met the primary and secondary efficacy endpoints and was non-inferior to an ESA in the treatment of anemia due to chronic kidney disease in patients on hemodialysis when used three times a week at the time of dialysis and with a comparable safety profile to the current standard of care. We believe the positive top line results are important because if Vataducet is approved for this dosing schedule, a three times weekly dosing schedule aligns with in-center hemodialysis visits, ensuring patient compliance. Again, I want to extend our sincere appreciation to everyone involved in this study, as it was a significant undertaking, and we are very pleased with the results. You'll recall we're also working with UT Health, evaluating Vatadustat as a treatment for acute respiratory distress syndrome, or ARDS. Since our last update, I'll confirm that we continue to work with UT Health to design and initiate an adequate, well-controlled study in a broad ARDS patient population and we expect to enroll patients this year. Our strategic business decisions and our team's adherence to our strategic focus has enabled us to live up to our purpose to better the lives of people impacted by kidney disease. We know there are many potential catalysts ahead in the near term, and we look forward to reporting on them as we continue to execute against our strategic plan. And with that, I'll ask Dave to talk more about our quarterly financials.
Akibia
Thank you, John, and good morning, everyone. I'd like to begin by addressing Arixia revenue. It's important to note that we are affirming our annual net product revenue guidance of $175 to $180 million. While last quarter we noted a significant increase in channel inventory, this quarter there was a significant move against us with a large reduction in Arixia inventory at our selling partners to the tune of approximately $5 million. Erixia net product revenue in the first quarter of 2023 was $34.8 million, compared to $41.4 million in the first quarter of 2022, a 15.9% decrease. We anticipate that with current contracting dynamics, quarterly performance will be a little bit bumpy. We are realizing a higher net price per tablet, approximately 80% higher than three years ago. As a result, changes in inventories in the channel are now much more apparent. Cost of goods sold decreased versus the same period in 2022. We are now what I would call at a normal cost of goods for Eurexia, which will include the $9 million quarterly non-cash Eurexia intangible asset amortization cost through Q4 of 2024. Next, I'll review operating expenses, an area I believe that our team has performed extremely well. In the first quarter of 2023, we realized a nearly 50% reduction in operating expense versus the first quarter of 2022 and a nearly 30% reduction from the fourth quarter of 2022. Our team has been diligent in its efforts to manage spend and sustain a reduction in operating costs. Rather than diving into the comparisons, I believe it would be valuable to remind folks of the actions we have taken over the last 12 months. while working diligently to further reduce our overhead. Some of those actions and accomplishments include reducing our headcount by more than 55% from Q1 of 2022, reducing external spend on several support functions, occupying less office space, winding down of historical clinical programs, reduction of contractors and consultants, and a reduction of our supply chain commitments to better reflect our current needs. as well as other important activities, while still having several value creation activities ongoing, supporting our third strategic pillar. As for cash, with our continued execution of our plan, our cash and Erixia revenues will allow us to fund our business for at least the next 12 months. We ended the quarter with approximately $57 million in cash on hand. Our debt position has been reduced to $51 million, a 24% reduction from the end of the year. we have significantly reduced our current liabilities. I also want to address our stock price and NASDAQ listing. As many know, we have been out of compliance with NASDAQ's minimum bid price rules for over a year. In an effort to regain compliance earlier this year, we filed proxy materials proposing amendments to our charter, including a proposal to affect our reverse stock split of our outstanding common stock. The primary purpose for affecting the reverse stock split was to increase the per share trading price of our common stock so as to regain compliance with the minimum bid price rule and maintain the listing of our common stock on NASDAQ. Unfortunately, the proposal did not pass, and we anticipate that we will receive a due listing notice imminently. While we plan to appeal the delisting, NASDAQ is under no obligation to accept the appeal and there could be no assurance that the appeal will be successful. Per NASDAQ rules, the only way to maintain a listing upon completion of the appeal process is to trade over $1 either organically or through a reverse split for no less than 10 consecutive business days. As such, if our stock does not organically regain compliance during the appeal process, We currently plan to file a new proxy statement seeking approval of a reverse stock split. We appreciate that the majority of our voting shareholders supported the reverse stock split proposals at the special meeting and find value in maintaining the NASDAQ listing. In the meantime, we continue to operate our business as usual and recognize the value that could come from potential near-term catalysts. We are extremely proud of our business progress over the last year. since we established our new strategic pillars. I'd like to close with a recognition of all the Akibians who have got us here. With that, we'll open the line for questions. Operator?
Operator
Thank you. As a reminder, to ask a question, please press star one one on your phone and wait for your name to be announced. To withdraw your question, please press star one one again. Standby has been compiled the Q&A roster. One moment please for our first question. Our first question will come from Alison Bratzel of Piper Sandler. Your line is open.
Allie
Hi, thanks. Good morning, and thanks for taking my questions. So first, just on the Vatadustat FDRR process, could you just help us understand the communication you've had with FDA on that process, at least to the extent that you can, and just clarify When did the 30-day clock start, or just what gives you confidence you'll get an answer from Dr. Stein within 30 days? And I have a couple follow-ups.
John Butler
Thanks, Allie. So, we've been in regular contact. We mentioned that we had a formal Type A meeting with Dr. Stein last quarter. And, you know, there's been regular communication with the project manager as there normally is during an FDA review and, you know, so we expect to have an answer from Dr. Stein within 30 days. But recall that it's also possible that he'll ask more questions, right, and extend it another 30 days. We don't think that's where it's going to go. But, you know, we don't really have insight into, you know, what that next communication will say. So while we believe that You know, he has the information he needs to make a decision. And, of course, you know, we feel strongly about where that decision should go. We don't really have any insight into, you know, into what that communication is going to be. So we're looking forward to seeing that. And, of course, I'm sure there will be ongoing communication over the next 30 days as well, just that regular course of business.
Allie
Got it. And then just on the EU partnership, can you just help us understand what kind of partnerships could be on the table there and just how those discussions have progressed now that you have the approval in hand in Europe and any kind of clarity or visibility on timing there for a partnership? That would be helpful. Thanks.
John Butler
Sure, Ali. It is a very active process now, obviously. You know, we've been saying all along, you know, having the CHMP vote was important, but, you know, having the approval in hand and knowing exactly what's in the label, et cetera, you know, really has accelerated that. It is, I guess at the end of the day, you know, you can expect a pretty typical type of transaction would be my guess at this point. I think the important thing is the indication is in dialysis, and dialysis is a complicated market. And so finding a partner who really understands that market opportunity, and again, I mean, it's a European approval, but every one of those European markets is different, and dialysis is different within each one. So that expertise is really important, and we're weighing that heavily as we weigh between you know, the options that we think we have for a partnership. So, you know, again, it's the kind of thing we want to move quickly because, you know, we want to launch the product as quickly as possible and we're anticipating that before the end of the year. But, you know, we want to be very deliberate and pick the right person who's going to maximize the value in the long term.
Allie
Got it. That's helpful. And then this last one from me, just on the focus trial data, can you kind of walk us through the importance of that, the three times weekly, that dosing, and maybe what venue we could expect to see full data presented or published at? Just seems you'd want to get that data out to docs pretty quickly. Thanks.
John Butler
Yeah, that's exactly right. I mean, as you know, dialysis is delivered three times a week. hemodialysis in center. We know that home dialysis is going to be an important market for VETA. We've talked about that from the beginning and the once a day oral dosing for VETA is quite important there. But hemodialysis is still a dominant way of delivering dialysis both here and in Europe. And having the option for dialysis providers to basically give the patient, you know, their pills while they're on dialysis just simplifies things for everyone, you know, for the dialysis providers and for the patients who are ensuring their compliance. And, you know, particularly in the U.S., when you think about PDAPA and the fact that the dialysis providers are buying, you know, the Vatadustat, will be buying the Vatadustat, you know, if we're approved, you know, they want to ensure compliance that the drug is being taken by the patient. And, you know, so we think that three times weekly dosing is quite important. And as you referenced, we want to try to have that data be available as quickly as possible. So, you know, I know that there's a manuscript that's being worked on. And, you know, of course, the meeting you generally will present data at will be the ASN meeting. So we certainly don't know whether the data will be presented there yet, but that would be my expectation.
VEDA
Okay, got it. Thank you.
Operator
Thanks, Ali. Thank you. One moment, please, for our next question. Our next question will come from Ed Arcee of HC Wingright. Your line is open.
Ali
Hi, good morning, everyone. This is Thomas Yip asking a couple questions for Ed. Just perhaps a first question regarding the FDRR process, as you alluded to, and the response expected within 30 days. Just internally wondering what would you consider to be the best and worst case scenarios, and would you be open to file another round of FDRR if needed?
Thomas
Tom, thanks for the question.
John Butler
So we've kind of described in the past what the potential outcomes are for the process. I think those very much hold. I suppose the worst case scenario is that our appeal is denied and we're referred back to the division. That would be... You know, again, there probably wouldn't be a path forward for Vatadustat in the U.S. with that outcome. Obviously, that's not the one we're hoping for. The clearest outcome, positive outcome, then, is that the appeal is granted. Remember, this isn't an approval, right? It's an appeal process. So, if the appeal is granted, then we refile the NDA. And the division has either two or six months, depending on whether they make it a type one or two submission, to review the product again. And then that leads to the approval. With an approved, a granted appeal, I mean, your likelihood of success is extraordinarily high. The third option would be an appeal that's denied, but an identified path forward. And from our perspective, that is almost as good as an appeal granted. FDA is giving you, Dr. Stein, is giving you a clear path forward for approval. And we've talked before, maybe that's holding an adcom that we think that's probably unlikely. Maybe it's some other, something else he puts forward as, something that allows you to get an approval, something short of more clinical data, right? So it's something, an analysis you have, a REMS program, something else that he says, you know, this will give you a path to approval. And that's a very common outcome as we've learned from, you know, these FDR processes.
Ali
Thank you so much for laying out all the scenarios. We appreciate it. Perhaps one other question from us. you mentioned in the press release beyond the loss of exclusivity that's anticipated March 20th, 25th. What are some possibilities to keep that market going? Can you discuss? Thank you.
Thomas
Yeah, no, it's a great question. Thank you.
John Butler
So, right now, the expectation in dialysis, remember where Rixia is used is is to treat hyperphosphatemia in dialysis patients. Right now, CMS is expecting to add phosphate binders, all oral products that aren't part of the bundle already, to the bundle as of January 1st of 2025. And what they've said in their last rule is that they're going to have a TdAPA period for these oral products, because right now they don't have the data to know what to add to the bundle payment. So if you use the calcium memetics as an example, you know, the Amgen product, they went through their Tdapa period a few years ago. And, you know, you go from being a Part D drug to a Part B drug. CMS collects all of the data on utilization of the product. And then at the end of the Tdapa period, they make a determination for the dollars per dialysis session that they'll be adding to that bundled payment. And so that's what we expect them to do, looking at the different binders, the utilization of each. So for, you know, when you think about this from a dialysis provider's perspective, you know, there's great incentive to, you know, A, treat patients very effectively, so really focus on the treatment of hyperphosphatemia, and frankly, focus on the use of branded products within that. in order to maximize the value of that payment that's added. Because once that's added, it doesn't change. CMS doesn't feel they have the ability to go back and look at that payment again. So for those two years, and that's the TDAPA period that's been defined by CMS at this point in time, so 2025 and 2026, there's a real motivation for them to utilize products like Arixia and utilize the branded products. So we'll have to contract directly with the dialysis providers and work with them on their protocols, et cetera, so that they're utilizing the product. So it's unlike a situation where you simply lose exclusivity and generics come in to dominate the market. We think that there's more opportunity there. Now, even if we get to a situation where we didn't have TdapA, given the nature of these phosphate binders, if you look at Sevelamer, Renogel, Renvela as an example, even though they lost their patents, The dynamics, the generic dynamics of the amount of product that has to be delivered to a patient is such that there wasn't really significant interest from generic manufacturers to bring the product to market. So they had a very, very long tail on Sevelamer. And if we see something like that, either through Tdapo or through kind of the normal course, there's very significant revenues still. It'll be a declining revenue stream, to be clear, but one that will need very little sales and marketing investment. So, you know, significant opportunity for positive cash flow for the company.
Ali
Understood. That makes sense. Thank you again for taking our questions, and really looking forward to the FDOR response.
spk08
So are we. Thanks, Thomas.
Operator
Thank you. This will end the Q&A portion of the conference. I would now like to turn the conference back to John Butler for closing remarks.
John Butler
Thanks, Chris. And thank you all again for joining us this morning. And it's hard not to reflect on the progress we've made over the past year since receiving the CRL. And we've negotiated an exit with Otsuka that brought $55 million in cash and secured significant global rights. We've continued to drive Arixia, allowing us to run the company on Arixia revenue plus our cash on hand. We've completely changed the cost structure of the company. We've worked through the FDR process with the FDA. And most importantly, to date, we took over the European filing and led Vatadustat to be approved in Europe. We have what may be even more important milestones ahead in the next month, and I really look forward to discussing those with you in the near future. Thanks, everyone. Have a great week.
Operator
This concludes today's conference call.
John Butler
Thank you all for participating.
Operator
You may now disconnect and have a pleasant day.
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