Akebia Therapeutics, Inc.

Good day, and thank you for standing by. Welcome to the Akibia Therapeutics third quarter 2023 financial results conference call. At this time, all participants are in 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. Please go ahead.

Thank you. Thank you, and welcome to Akebia's third quarter 2023 financial results and business updates conference call. Please note that a press release was issued earlier today, Wednesday, November 8th, detailing our third quarter financial results. and that release is available on the Investors section of our website. For your convenience, a replay of today's call will also be available on our website after we conclude. Joining me for today's call, we have John Butler, Chief Executive Officer, and Ellen Snow, Chief Financial Officer. I'd like to remind everyone that this call includes forward-looking statements. Each forward-looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Additional information describing these risks is included in the financial results press release that we issued on November 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 obligation to update or revise any of these statements. With that, I'd like to introduce our CEO, John Butler. John?

Thanks, Mercedes. For those who've been following our story over the past couple of years and have witnessed all of our team's efforts, you know it gives me great pleasure to talk to you about Akibia's future today with an extremely important and hard-fought catalyst in our sights. As we've reported, The FDA set a user fee goal date, or PDUFA date, of March 27, 2024, for Vatadustat, our oral HIF-PH inhibitor to treat anemia due to chronic kidney disease, or CKD, in patients on dialysis. That's less than five months away. Our team has been working diligently towards U.S. approval for Vatadustat. We completed a formal dispute process and engaged with the FDA during an end-of-dispute Type A meeting. We then resubmitted to our NDA for Vatadustat in September. Our resubmission included post-marketing safety data from tens of thousands of patients in Japan where Vatadustat is approved and has been on the market for more than three years. Based on the new data in the resubmission, the FDA assigned a six-month review cycle in line with our prior expectations. Today, they are actively engaged in the review. I just returned from the American Society of Nephrology Kidney Week last week. I was excited to see how much innovation is happening for patients with kidney disease, including multiple products introduced since the meeting last year. I had the pleasure of having many conversations with key medical experts, and I can say unequivocally that these physicians are very excited about the role that Adustat and HIFS can play in the treatment of patients with CKD. they were very happy to share thoughts on where the greatest patient need exists, as well as areas for future research. For our part, we're confident in our path forward and continue to believe in the benefit Vatadustat can deliver to patients. If approved, we're eager to bring Vatadustat to market in the U.S. as an alternative oral treatment to deliver on our commitment to patients, our partners, and the broader kidney community. Before I speak to the potential commercial opportunity for Vatadustat in the US, I want to again applaud our regulatory team for their productive interactions with the FDA over the past year and timely completion of the resubmission. I also want to thank our partner Mitsubishi Tanabe Pharma Corporation, or MTPC, who markets Vatadustat in Japan and was instrumental in collecting the safety data included in the resubmission as part of their typical post-marketing vigilance in Japan. Now, with the regulatory resubmission in our rear view mirror, we're now shifting our focus to the Vatadustat launch phase that we expect next year if Vatadustat's approved. In the international markets, Vatadustat's approved in 36 countries. Since our last call, Vatadustat's been approved in Australia and Taiwan. Work is underway by our partner, Bidisi, to bring Vafseo Vatadustat to market in Europe in 2024. which would generate future royalties and potential milestones for Akibia. That said, a US launch of Atadusat would represent our most significant commercial opportunity. With approval, we have the potential to target an approximately $1 billion market, based on estimates that approximately 88% of the nearly 550,000 patients on dialysis would be treated with an erythropoiesis stimulating agent, or ESA, for anemia. These are the injectables that are the standard of care. It's important to highlight that we are already well prepared for a potential launch and have identified important tailwinds we believe will contribute to our success. First, we have our commercial product supply ready to go, awaiting final label post-potential approval. Second, we also have an experienced commercial sales organization actively calling on dialysis centers. We believe there's approximately a 96% overlap between Arixia prescribers and potential Vatadustat prescribers. Importantly, we'll also benefit from our partnership with CSLV4, which enables potential access to 60% of the treatment centers through its collaboration with Fresenius Medical Care and other small and medium-sized providers. While we do expect to invest appropriately in the Vatadustat launch to reflect the significant opportunity, based on our initial preparedness from 2022 and our existing infrastructure, we expect that investment in 2024 to be incremental compared to our current OPEX. Now, it's critical to also understand the unique payment landscape in dialysis. Medications used to treat most dialysis patients in the U.S. are reimbursed as part of a bundle payment made to providers. Included in the bundle payment are funds for an ESA treatment used to manage anemia. To promote innovative drug use for patients in that prospective payment system, CMS implemented a transitional add-on payment adjustment, or TDAPA. For two years post-TDAPA designation, the TDAPA payment would cover the cost of Vatadustat if a physician prescribed their product. Their overall bundle payment does not change. Now, while we continue to work on post-TDAPA payment policy, it's important to recognize that today almost 90% of dialysis patients are treated for anemia, and there are significant dollars in the current bundle payment for the treatment of anemia. We expect to have Vatadustat commercially available quickly following potential approval, but expect minimal initial revenue to be generated in those first months. After the six-month TdapA application process, anticipated to be complete by October of 24, we anticipate the product would be reimbursed and widely available and accessible to patients. As I mentioned earlier, we will have a strong tailwind from our CSLv4 relationship. which will provide a key view of potential access to up to 60% of the dialysis market through CSLV4's collaboration with Fresenius Kidney Care and several small to mid-sized providers with whom they contract. A key bill will receive two-thirds of the profit associated with Vatadustat sales in those centers, net of certain pre-specified costs, and V4 will keep one-third of the profits. Akiva will retain 100% of the economics in markets not covered by our contract, predominantly any sales to DaVita. Now we're also fortunate to be supported through this launch by the robust cash flows from Arixia. Today we reported Arixia net product revenue of $40.1 million in the third quarter. We've guided to $170 to $175 million net product revenue for the year, and I expect we'll come in around $170 million. We expect Rixia revenue to grow in 2024 as we exit unfavorable payer contracts, incrementally expand our commercial and medical footprint, and gain broader access to providers from their interest in learning about Vatadustat if it's approved. Lastly, we were able to delay the cash payments associated with our Pharmacon debt service until October of 2024. which provides us with additional flexibility to invest in the launch of Adadustat as well as other growth opportunities for the company. And to provide more information on our revenue and other financials, I'd now like to turn the call over to Ellen Snow, our Chief Financial Officer. Ellen?