Akebia Therapeutics, Inc.

Good day and thank you for stopping by. Welcome to the Akibia second quarter 2025 financial results. At this time, all participants are in listening only mode. After the speakers presentation, we'll open up for questions. To ask a question during the session, you will need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's call is being recorded. I would now like to hand the conference over to your speaker, Mercedes Carrasco, senior director of investor relations. Please go ahead.

Thank you and welcome to Akibia's second quarter 2025 financial results and business updates conference call. Please note that a press release was issued earlier today, Thursday, August 7th, detailing our second quarter 2025 financial results. And that release is available on the investor sections 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, Nick Grunz, chief commercial officer, and Eric Ostrowski, chief financial and chief business 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 August 7th, 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. With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks to everyone for joining us this morning. Since VAPSEO VADDUSAT's approval, and even prior, I've spoken about our goal to make VAPSEO standard of care for patients with anemia due to chronic kidney disease. From my perspective, this endeavor has three parts. First, successfully launch VAPSEO in dialysis during the TdapA period. Second, continue growth in dialysis post-TdapA, potentially supported by the data, creating additional areas of differentiation. And third, approval and launch of VAPSEO to treat anemia of CKD in patients who are not on dialysis. That's the journey we're on, and I'm proud to report the progress we've made in each area during the second quarter, and to date, in Q3. I continue to be incredibly pleased with the progress of our launch. We generated over $13 million in VAPSEO revenue in Q2, with approximately $12 million in demand sales, a 55% increase over Q1. In Q2, US Renal Care continued to represent the vast majority of our revenue, and we appreciate their foresight partnership and ongoing commitment to delivering innovative therapies to patients. But we have to broaden that access to achieve our goals. While we're pleased with the first two quarters of launch, we really only had access to about 40,000 dialysis patients during those months, through USRC and other smaller dialysis organizations that operationalized the protocol to easily enable prescribing. In Q2, we had expected to have broader access at the other two mid-size dialysis providers, DCI and IRC, the fourth and fifth largest dialysis provider. Today, I'm pleased to report that both are now completing their processes to make VAPSEO available. As of September, we expect that physicians at these dialysis organizations will be able to write a prescription for VAPSEO without restriction, bringing the total patients of access to over 75,000. We believe this will enable a significant step up in growth. Even more significant from a volume and patient access perspective, the VITA, one of the largest dialysis providers, is completing preparations for its operational pilot for VAPSEO. They've placed an initial order and expect patients to receive the drug starting in the middle of August. Upon the successful completion of the pilot, we expect to increase patient access by more than sixfold, from 40,000 patients in Q1 and Q2 to at least 275,000 patients later in Q4. Nick will give you more color on all of this launch progress and metrics. The second focus to drive VAPSEO to become standard of care is to enhance the environment for growth post-Tiapa. I'm very pleased to report the voice trial being conducted in collaboration with USRC has been fully enrolled as of late June. Over 2,100 patients enrolled in only seven months. I believe this clearly speaks to investigators' interests in the potential benefits VAPSEO may bring their patients and a desire to prove that dosing and administer during dialysis may be beneficial as well. The timing of remodeling completion is important as it means the study will complete in late 2026 with data available in early 27, shortly after the end of Tiapa. A voice and outcomes trial looking at all-cause mortality and all-cause hospitalization. While its primary endpoint is non-inferiority, its power to demonstrate potential superiority is a key for that to do staff for all-cause hospitalization. We believe any data demonstrating a positive clinical outcome will be critical in establishing VAPSEO as a standard of care. We're also pleased to have initiated VOCALS, a study looking at dosing of VAPSEO three times a week, being performed in 18 DaVita dialysis facilities. This study will enroll about 350 patients. An important and exciting sub-study will look at characteristics of red blood cells in patients treated with VAPSEO. The previous studies have shown that other HIPP-PHIs can improve the lifespan of a red blood cell. I believe showing a potential positive impact on red blood cell characteristics, size, lifespan, oxygen carrying capacity, with VAPSEO in a dialysis population can demonstrate the tangible differences a more physiologic approach to treating anemia can yield. The third area of focus is securing an indication for non-dialysis patients in the VAPSEO label. Recall that while the stage four and five non-dialysis population with anemia is roughly the same size as dialysis, about 550,000 patients, it doesn't have the same pricing complexity that dialysis has in a post-TDAPA setting, making it potentially four to five times larger than the $1 billion addressable market size of the dialysis market. We've continued to work to move this initiative forward. We completed a type D meeting with the FDA in May. The meeting addressed a single focused written question to the agency related to the comparator arm for the Valors trial in NDD-CKD. Based on FDA written feedback, we're now planning for an active ESA comparator. We believe this design will simplify the pool of data with our prior phase three USProtect program. We've recently submitted a type C meeting request to further discuss the study design, statistical analysis, and pool pooling strategy. And we're working to initiate Valor by the end of the year. The team at IKEA believes strongly that patients not on dialysis would benefit from access to VASIO, and we're working hard toward our goal to gain alignment with the FDA and to be in a position to enroll the trial quickly. With the launch of VASIO and continued strong performance of Erixia, we had over $60 million in net product revenue in Q2, the highest level in the history of the company. In a moment, Eric will talk to you about our strong second quarter financial results and solid financial position. But first, let me turn it over to Nick to give more color on the VASIO launch and what we're learning in the field. Thanks, John. Good morning, folks. As we work to build a new standard of care in treating CKD anemia in dialysis patients, we are taking a comprehensive and long-term view on how to establish a successful brand in a large category. To this end, we are rapidly advancing efforts across multiple workstations, which include building patient access, broadening patient physician prescribing, and continuing physician education. We are making great progress on all fronts. Let me begin with some updates on prescription models. During the launch, we are focusing on breadth, the number of physicians prescribing, and depth, the amount they are prescribing. We are very pleased to have 725 prescribers right within quarter two, up from approximately 640 in the first quarter. The prescribers are now writing an average of 13.3 prescriptions each, which is also an increase from the 12 prescriptions we reported in the first quarter. The breadth and depth of prescriptions are growing, but there is still more to do. I also want to touch on refills and average doses of VASIO over time. Refills represented greater than 80% of prescriptions in quarter two, and the average dose of those refills is up 28% from the starting dose. We believe this reflects that physicians are getting comfortable treating patients at an optimal therapeutic dose, and as a result, each of our prescriptions becomes more valuable. Upon market availability, we had expected the frequency and intensity of dialysis patient care would have resulted in a higher than typical adherence rate for VASIO. As we have now been out in the field since January, we have observed adherence rates consistent with the industry at 70 to 80%. As we saw in our clinical trials, some patients, especially those on higher doses of VSA, experience a hemoglobin drop on transitioning to 300 milligrams starting doses of VASIO. This is a departure from the experience with today's standard of care, and anemia managers are conditioned to react as quickly as possible for a hemoglobin drop. In some cases, anemia managers did not assess tight rates per the protocol, and patients were moved back to their prior VSAs. I am proud of how quickly the Akivia team and our partners reacted to improve adherence. We quickly revamped and highlighted our messaging focusing on dosing and titration. We worked with existing customers to adjust protocols, and we educated dialysis organizations who were developing protocols to consider this in their protocol design. We believe our messages on improving adherence are getting out there and taking effect. Our focus ahead is to accelerate growth by increasing utilization and additional DOs by enabling nephrologists with access to write prescriptions. I would like to spend a minute providing more detail on our partners. As we have discussed previously, we have commercial contracts in place with all key dialysis organizations and group purchasing organizations covering nearly 100% of dialysis patients. That was step one. We are also supporting dialysis organizations in the creation and operationalization of VASIO treatment protocols. I will refer to this as prescribing access. As John mentioned, we are prescribing access to over 40,000 dialysis patients in the first half of the year, resulting in most of our orders since launch coming from USRC. Within the next month, we will have prescribing access to over 75,000 dialysis patients, an increase of over 85%, which includes DCI, IRC, and many independent and small dialysis organizations. Momentum around protocol development and implementation is picking up further in the third quarter as Zabita physicians will be doing prescribing VASIO as part of its operational pilot at more than 100 dialysis. With large complex systems, it always makes sense to do a test run to ensure our patients are on. That's exactly what Zabita is doing today. Activity around the pilot has already begun as Zabita notified the selected pilot sites, ordered product in July for early pilot prescribing, and began training their staff. The pilot is expected to be concluded within approximately three months, which we believe will increase total prescribing access for VASIO to over 275,000 dialysis patients and enable the opportunity for a significant uptick in ordering in the fourth quarter of the year within Zabita. One additional important note on patient access, in discussions with dialysis organizations with protocols in place and in view of claims data, we've confirmed that a significant number of Medicare Advantage clients are covering VASIO. As a reminder, patients covered by Medicare -for-service represent 35 to 40% of dialysis patients and Medicare Advantage, another 35 to 40% of patients. Therefore, depending on the dialysis organization, the addressable patient population for VASIO could be doubled and potentially up to 80% of all dialysis patients having reimbursed in for VASIO. Looking at the totality of our efforts, we're happy with the progress on growing breadth and depth of prescribing, increasing patient access, and physician education. We have increased demand 50 to 5% quarter over quarter. We expect to meaningfully increase prescribing access from approximately 40,000 patients to over 75,000 patients in the third quarter. And we are on track to access the VEDA, which we expect to lead to prescribing access to over 275,000 dialysis patients in quarter four. We're still in early stages of our goal to build a new standard of care, but we believe we are on track to make our goal three-oddly. Let me now turn it over to Eric. Thanks, Nick. We're happy to report another strong quarter driven by the top-line performance of both VASIO and Eryxia. I will now provide an overview of our results compared to the second quarter of last year. Total revenues, which are comprised primarily of net product revenues, and ultimately include lightning, collaboration, and other revenues, were $62.5 million this quarter as compared to $43.6 million in Q2 of last year, representing an increase of $18.9 million. Of these amounts, net product revenues increased to $60.5 million this quarter from $41.2 million in Q2 of last year. This was driven by sales of VASIO, which is mentioned to be about $13.3 million in quarter, as well as by an increase in Eryxia sales, which were $47.2 million this quarter as compared to $41.2 million in Q2 of last year. As a reminder, Eryxia lost IPX facility in March, and there is an authorized generic for Eryxia on the market, though no generics have been approved by the FDA at this time. We are pleased with this quarter's strong Eryxia results, though caution future Eryxia sales levels are challenging to predict, due to the uncertainty around the timing of potential additional generic competition. Cost of this sold decreased to $9.9 million this quarter as compared to $17 million in Q2 of last year. The key driver of this cost reduction is that we are no longer reporting a $9 million quarterly non-cash synchronization charge related to the acquired development product rights for Eryxia, which is now pulling into effect. Also of note, VASIO sales in the quarter were derived from pre-launch inventory, which does not include the full cost of manufacturing, but a portion of those inventory related costs were previously expensed to R&D prior to VASIO's FDA approval. R&D expenses increased to $11 million this quarter from $7.6 million in Q2 of last year, driven by increased clinical trial activities related to VASIO, as well as our other programs. SGA expenses increased slightly to $26.6 million this quarter from $26.9 million in Q2 of last year. Turning to the bottom line, we generated $247,000 of net income this quarter as compared to a net loss of $8.6 million in Q2 of last year. This quarter's net income was driven by the increase in revenues, which was partially offset by $5.4 million in interest expense related to the deep or settlement loyalty liability, as well as $7 million in non-cash expense related to the change in fair value of our warrant liability, which was driven by an increase in our stock price to over the prior quarter. We ended Q2 with $137.3 million in cash and cash equipment. We believe our existing cash resources and the cash we expect to generate for product, royalty, supply, and license revenues are sufficient to fund our current operating plans of profitability, including to pursue label expansion for VASIO and advance our other pipeline programs. In closing, our Q2 financials reflect increased uptake of VASIO, continued resilience of the Euryxia revenue stream, and careful attention to operating expense, which resulted in our strengthened financial position. As John and Nick mentioned, the team is dedicating significant energy towards continuing to expand both the breadth and depth of VASIO utilization. And we look forward to discussing the results of these efforts on our next learning fall. With that, we welcome questions.

Thank you. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for a name to be announced. To withdraw your question, please press star 1-1 again. Please stand by. We'll compile the Q&A roster. One moment for our first question. Our first question will come from the line of Roger Song from Jeffreys. Your line is open.

Hey, guys, morning. Congrats for the quarter, and then thank you for taking our question. You know, you give us a lot of the good numbers here. Just want to get a sense of some of the key metrics here. So first is the patient segment. So in terms of the home use and the high ESA, what do you see this quarter, and how does change over last quarter? And then also, how do you fall looking when you have more people in the room? And then also, how do you see the more larger DO coming online, including the VITA in four queues? You see the patient segment will change. Similarly for the payer, you say the Medicare advantage seems to be a significant amount of the patient and can you quantify compared to the fee for service? And I have a follow-up. Thank you.

I think that's for you. Yeah, and so when we think about the patient segmentation, it's a great question. And where USRC, who is a vast majority of our prescriptions, their protocol is broad. They're allowing huge use for both in-center patients and home patients. And we see usage that is very much similar to the market segmentation between the PE and home patients, seeing about 12% of the total scripts and the remainder being for in-center patients. The second part of that is how do we see that moving forward when we add on to VITA and others in the third and fourth quarter? When we look at all of the protocols that they're putting in place, whether it be an IRC, ECI, or to VITA, they're all broad protocols that allow for both in-center and home use. You know, when physicians think about a patient top of mind that will benefit from VASIO, they go to two important segments first. They go to the home patient where it makes really, really good sense to use an oral therapy for those patients to avoid injections as well as consistent analysis units. And they also think about higher dose ESA patients who have a higher increased mortality and cardiovascular risk associated with those higher dose of ESA. And so we expect to have continued broad uses. It may tip a little bit higher towards the PD section or the home section, but expect consistency moving forward given those broad protocols. The second part of your question was on market access and Medicare Advantage. To date, we're seeing about 20% of total prescriptions being filled in the Medicare Advantage segment of the population, where 80% is Medicare -for-service. But as we look going forward in our discussions with again, IRC and ECI and the VITA, they have all indicated to have significant Medicare Advantage contracts already in place that will support VATIO through additional TdapHA coverage. And so that's a great sign. That means that those populations are growing over our initial expectations of -for-service and they're growing at a faster rate. We always thought they would add Medicare Advantage plans over time. It's happened much earlier than we thought it would. I think even with US Renal, where they started with mostly a focus on -for-service as that Medicare Advantage coverage has grown, they've kind of pushed those patient needs out to the dialysis centers as well. So there's still growth to be had clearly within US Renal. That's correct. When I think about US Renal, over 80% of US Renal care physicians are running, which is an important metric, especially when new coverage becomes available. When that new coverage becomes available, those physicians have the opportunity to treat VATIO to a broader population that is in need of VATIO that previously didn't have coverage. So we're looking forward to continued access increases and look

forward to

driving

deeper penetration within all accounts.

Excellent, thank you for the detail. Just a quick one. And then what's the current average dose strength for your prescription? Because you see, I know you see them at a higher dose. Those levels are in the recent trend, thank you.

Yeah, Nick, I think that's you again. Yeah, and so as I referred to in my script, we're seeing refilled scripts being at about a 28% increase over the 300 milligrams starting dose, which is great. We saw in our InnoVate trial, clinical trial, that folks got to approximately an average of 420 milligrams per script. That would be a 40% increase or at 25% increase or 28% increase to date. So we see as people progress through their prescriptions from first prescription to second prescription, third prescription, those doses continue to titrate them. As you recall, our label has people titrating up at 150 milligrams after four weeks and every four weeks thereafter. Therefore, it's gonna take the second or third refill to get them to the appropriate dose in some cases. And I think when you mentioned the adherence changes, I mean, what some providers are doing is actually allowing the titration at week two, which we saw in the modified trial as well. So, I mean, the one thing to be aware of as you bring on new dialysis providers and they bring on more new patients, so we see this step up in patients, you may actually see a bit of a step down in those because you have more patients at that starting dose. That's exactly what we would hope to see, but as they stay on the drug, they'll titrate to that average dose. And obviously, as you can see, an important component of that growth in the quarter.

Got it, makes sense, congrats again.

Thanks, Roger.

Thank you, one moment for our next question. Our next question comes from Julian Harrison from BTIG. Your line is open.

Hi, good morning, congrats on the quarter and thank you for taking my questions. On the operationalized protocol you're expecting from DaVita, is that expected to be implemented in earlier or late fourth quarter? Are you able to provide any granularity there? And when we start to think about the other large dialysis organization of comparable size to DaVita, should we also expect that corresponding protocol to be proceeded by a pilot study as well?

Yeah, great question, Julian, thanks for it. So the DaVita operational pilot is, they are preparing for it now. They ordered the product, they're training, they're training at the site. And we expect in the next couple of weeks, I think the 18th of the month is when they expect to go live with it. So and then that pilot will last three months. So, you know, up to three months, obviously it could go sooner, but I think the expectation should be around the middle of November, is when they basically open that up to the entire DaVita network. So, you know, and as you mentioned, the other large providers for sitting us, of course, and we continue to talk to Prasenius, you know, present them clinical data, et cetera. We have not been able to progress yet. I think as DaVita comes on and all of these other providers come on, it becomes more and more difficult for them to keep access from their physicians and patients for this innovative product. My expectation, you can correct me if I'm wrong, is they would probably do a similar kind of operational pilot before they get brought back

to us. Excellent,

that's very helpful. And then a follow-up, if I may, on -dialysis-dependent CKD, it sounds like you're very close to finalizing the phase three trial design for Valor. Are you able to give us an approximate sense for how soon this label expansion opportunity could come online for VAP-CO? What does the timeline look like after that study starts around

year end?

So the timeline is going to be driven significantly by how quickly we can enroll the study, right? And it's an outcome study. We still expect, again, all of these details are somewhat to be determined, but the numbers we've been giving in the past, about a 1,500 patient trial, now with an active comparator versus VAP-CO or AdduStat, and doing it strictly in the US with US patients. So we can do that pooling of Valor with the US Protect data to enhance the comfort that there isn't an increased MACE risk, which of course we didn't see in US patients with Protect. It's really all about how quickly we can enroll and giving a sense of that before we know what the final protocol looks like. I mean, this is one of the activities that we're doing to prepare is working on feasibility. How many sites, how many patients per site, and that will help us to better inform you, but I don't want to get ahead of that data yet. But obviously our goal would be to enroll as quickly as possible.

Excellent, that makes a lot of sense. Thank you and congrats again.

Thanks so much, Julian. Thank you, one moment for our next question. Our next question will come from Lina Mazze Ali Mohammed from Lyric Partners, your line is open.

Thanks for taking our question. This is Mazze Han for Ruwanaruis. So Erixia revenues actually grew year from year. So I guess one question is, with the only one authorized generic currently in the market, what's your outlook for competitive dynamics over the remainder of 2025? And I guess, how are you thinking about positioning for additional generic entrance in the future?

Easy, thanks for the question. Nick, maybe you can kind of talk about the market dynamics and why we're seeing that growth. Yeah, and the market dynamics, it's great news for Erixia. It's really built on the back of, Erixia is a 10 year old product, and physicians are very comfortable with the clinical profile and the benefits of Erixia, as we've been kind of working with physicians for the last 10 years. When we think about Erixia pre-bundle, the market, the access for Erixia was actually extremely limited in prior years. Physicians often had to do a prior off, in some cases they had to do a medical exception, and they didn't wanna really do the work consistently for their patients. Now that the bundle has been implemented, access for Erixia is actually at one of its greatest points in its history. And so physicians who are very comfortable using the product understand its benefits in patients are taking the opportunity with that and increase access to put more patients on Erixia, which is great news for Erixia. And so when we think about that trend continuing, maybe for the AG pieces, I'll toss it over to Eric or back to John just to go into that piece. Well, I mean, I think, as you said, we have one AG on the market, and we know exactly how much product we're supplying to the actress, and how long that supply agreement really only goes through this year. So we really need to see what happens with FDA. We've always had to be very careful about how we think about the long-term with Erixia, but ultimately we believe that a product will be approved. We've been saying for years that the slope of that curve, post-generic availability, isn't necessarily that patent cliff that you always see. If you use the Alomar as an example, it took years before the generics took the line share of the market because of the volume that you have to manufacture here. But we look at it in a very conservative way. And I'll pass that to Eric to talk a little more. Yeah, no, I totally agree with John. From an internal perspective, due to the reasons we're leading through this curve as well, in my comment, new generic competition could come up in any time. So we budget conservatively, and the longer we go without that incremental generic competition is really just upside to our concern. Yeah, and when we talk about our cash runway, et cetera, being able to finance our pipeline, it's using a very conservative view of where Oryxia lands over time. But we're four months post when we had originally planned to have generics available. So we are pleased every day to continue to be able to deliver the product that's patient.

Thanks for the added color. Congrats on the quarter.

Thank you, appreciate it. Thank you. I'm showing no further questions at this time. I want to turn it back over to John Butler for closing remarks.

Thanks, Victor. And thanks everyone for joining us this morning. We're focused on our goal of making VAPSEO standard of care for treating the EDU-CKD. We're making important progress across all components of that strategy. Our launch is accelerating. We're executing the studies in dialysis patients to continue to build evidence of potential benefits. And we're planning to initiate our NGD study, VALOR, this year. Our revenue performance and cash balance allow us to execute the strategy. And advance our early pipeline from a position of financial strength. We look forward to continuing to update you on our progress. Have a great day.

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