| Item 1.01. | Entry into a Material Definitive Agreement. |
On October 1, 2018, Keryx Biopharmaceuticals, Inc., a Delaware corporation (“Keryx”), entered into the First Amendment to Agreement and Plan of Merger (the “First Amendment”) with Akebia Therapeutics, Inc. (“Akebia”), a Delaware corporation, and Alpha Therapeutics Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Akebia (“Merger Sub”), amending the Agreement and Plan of Merger, dated June 28, 2018, by and between Akebia, Keryx and Merger Sub (the “Merger Agreement”). As previously disclosed, pursuant to the Merger Agreement, Keryx and Akebia will combine their respective businesses through the merger of Merger Sub with and into Keryx, with Keryx continuing after such merger as a wholly-owned subsidiary of Akebia (the “Merger”).
The First Amendment provides that, as of the effective time of the Merger (the “Effective Time”), Akebia must take all necessary corporate action to cause an increase in the size of the board of directors of Akebia (the “Akebia Board”) to ten (10) directors, comprising (i) four (4) directors designated by the Akebia Board, each of whom shall be a director of Akebia prior to the Effective Time and be reasonably acceptable to Keryx (the “Continuing Directors”), (ii) five (5) directors designated by the board of directors of Keryx (the “Keryx Board”), each of whom shall be a director of Keryx prior to the Effective Time and be reasonably acceptable to Akebia (the “Keryx Board Designees”), and (iii) one (1) additional independent director to be designated by the Akebia Board and the Keryx Board (the “Additional Director”), who is neither a member of the Akebia Board nor a member of the Keryx Board prior to the Effective Time. The Additional Director shall serve as chairperson of the Akebia Board as of the Effective Time. Pursuant to the First Amendment, Akebia and Keryx shall designate the Continuing Directors, the Keryx Board Designees and the Additional Director, as applicable, as soon as practicable, but no later than immediately prior to the Effective Time. The First Amendment also provides that, as of the Effective Time, the Continuing Directors, the Keryx Board Designees and the Additional Director shall be allocated among three classes of directors as follows:
| | • | | Class II (up forre-election in 2019): 1 Continuing Director, 2 Keryx Board Designees; |
| | • | | Class III (up forre-election in 2020): Additional Director, 1 Continuing Director, 1 Keryx Board Designee; and |
| | • | | Class I (up forre-election in 2021): 2 Continuing Directors, 2 Keryx Board Designees. |
Other than as expressly modified pursuant to the First Amendment, the Merger Agreement remains in full force and effect as originally executed on June 28, 2018. The foregoing description of the First Amendment is not complete and is subject to and qualified in its entirety by reference to the First Amendment, a copy of which is filed as Exhibit 2.1 to this Current Report on Form8-K and is incorporated herein by reference.
Merger Update
In addition to entering into the First Amendment, Keryx and Akebia are filing a joint proxy statement/prospectus regarding the Merger with the U.S. Securities and Exchange Commission (the “SEC”) today, which contains important information about the proposed Merger and the two companies. In connection with of the filing of the joint proxy statement/prospectus, Keryx is filing this Current Report on Form8-K to provide certain updates on its business.
Auryxia Formulary Status
Keryx has completed contract negotiations with Part D sponsors for the 2019 calendar year, and has secured coverage for Auryxia® (ferric citrate) on two additional Part D formularies. In 2019, Keryx expects Auryxia will be on formulary at nine of the ten major Part D plans.
The Centers for Medicare & Medicaid Services (“CMS”) recently communicated to Medicare Part D sponsors that Auryxia is considered by CMS a Part D drug when it is used for itsFDA-approved indication for the control of serum phosphorus levels. CMS also indicated that it does not consider use of Auryxia covered under Part D when it is used solely for the treatment of iron deficiency anemia (“IDA”) in patients with chronic kidney disease not on dialysis, which is Auryxia’s otherFDA-approved indication. CMS expects Part D sponsors to utilize a prior authorization edit (“PA”), or other process, to ensure that Auryxia is being used for a Part D covered indication. Keryx expects Part D sponsors will implement a PA for Auryxia no later than January 2019. Keryx expects to interact with CMS and Part D sponsors further on this matter.
Keryx believes that the vast majority of the Part D prescriptions written for Auryxia today are for the treatment of hyperphosphatemia and therefore will continue to be covered by Part D plans in the future.
