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.