AKBA - Earnings call transcript Q4 2018 | Akebia Therapeutics, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Akebia Therapeutics Preliminary Full-Year 2018 Financial Results and Business Highlights conference call.

As a reminder, this conference call is being recorded. [Operator Instructions]. I would now like to introduce your host for today's conference, Megan [ph]. The floor is yours.

Unidentified Company Representative

Operator. you, Thank thank recent and XXXX joining to us results Good progress you and our call. conference business business year Akebia's discuss and afternoon, highlights for preliminary financial full full preliminary release press for quarter issued also and containing this company's available Investor year The financial on was XXXX our the the results fourth afternoon is earlier and Relations website.

our today's convenience, call will available on today's webcast. audio conclude also we of website replay an after For your shortly be

President Dahan, and Strategy, Chief Jermasek, Butler, Executive Officer; Joining Officer; Jain, the Amello, our John Marketing will call Doug Jason Chief Financial for joining Chief Q&A and are and and be of VP Medical Chief session. Rita also Officer. Officer; Michel Business

conference this forward-looking contained those statements. could materially Before forward-looking statement described is Each call cause call differ these includes and we like actual that begin, I'd uncertainties in statements. from in to to subject risks remind to that results this everyone

Factors in statements on Additional information quarterly forward-looking financial The regarding speaks these like Risk most reports. to our to sections and the these this undertake With obligation Discussion we any John call, Butler. update CEO, described our to I'd statements. annual of or recently do original this any that, factors turn the Analysis of and as and the of revise over only are call not and of date call Management's John?

John Butler

disease. commercialization biopharma creation access X complementary Through Keryx. a a product multiple joining to a We the treat you kidney including XXXX company integrated the now merger, initiatives, year thank Thanks, a for afternoon, research, and we Akebia. for portfolio a of us. year, gained strategic with and assets. to Megan. for with proved of against successful everyone, Auryxia, commercial Good patients the we fully Throughout indications have for was executed capabilities transformative merger from

in partner, did for by Phase with we going or do clinical beginning collaboration program conducted positive Phase put, we of more. we were is said vadadustat. momentum with MTPC. the of to we advance announcement bit Japan for III and our XXXX the continued our to what from same program a global Tanabe, addition, the the III vadadustat sort Mitsubishi In results Simply

XX of And the us market most value. One There's all things to of that to care tremendous shareholder to we same advanced significant to to be Akebia a catalysts for innovation that very of at kidney time busy further are increase The opportunities months our the bring we've much proud next see ahead at our more time, of improve grow will portfolio. patients. over the advance to disease us. work is ahead mission with

Let me share I confidence in vision. why this have

highly differentiated our complementary. are primary and First, assets highly X

disease. development for hypoxia-inducible or prolyl on III treatment the anemia iron the focused CKD currently or Vadadustat to was the in IDA, CKD portfolio chronic in kidney Our for chronic patients anemia, spectrum patients treat non-dialysis-dependent is patients an hyperphosphatemia. and United States the factor of iron Auryxia in kidney only oral patients. for to or across hydroxylase and CKD approved is of due disease deficiency inhibitor, non-dialysis-dependent HIF-PHI, dialysis-dependent tablet investigational Phase dialysis-dependent

and provide disease working stages slow potentially earlier kidney our at a current on patients. towards better disease these we're that the growing of focus and its improve With portfolio, all-important of outcomes control in an complications assets core portfolio and to for strategic progression goal: and

to supporting a We that FDA launch with added sales, vadadustat, medical provides valuable addition us significant and Keryx for the capabilities growth. us these believe broader will affairs the to advantage long-standing our leaders Auryxia capabilities, manufacturing, merger represent subject with marketing key with including community. momentum relationships Second, and opinion approval, nephrology help in that

tolerability prescriptions $XX For made XXXX, sales the saw XX% unaudited team XX% drug. full year Auryxia, market of the perceived to Nephrologists offers XXXX. and XXXX. the binders, a both for uptake Auryxia X.X% on an favorable the generic, have end favorable that's because in Auryxia gains to perception important Auryxia's hyperphosphatemia three compared We to it across indications, second, Pro and other increased alternative branded less a favorably the XXXX of forma and of phosphate both exceeded highly grow needs treatment in patients; in volume share formulation. burden progress primarily during XXXX by has third, We of the Auryxia at prescribers. total driving potential in approved million. palatable its with of most a exited first, X.X% pill profile; compared in significant a share of of commercial XXXX. the an all options increase gains to very market:

to starting particularly switching reflected from phosphate data. Sevelamer. end prescription On in released switching guidings phosphate need see XXXX, at guidelines which use patients, the the binder top Kidney Outcomes, of kidney for to CKD, capture patients should that of disease, those the are driven use limited. of with patients in that than from of This an In stating Global other more fewer a addition, adult to we that recognize publishes calcium-based treatment be to or opportunity Disease: calcium-based half binders Improving KDIGO, has this, in nephrologists agents, and have we're

these Although the more of pill switching this high market limited a for is discontinuation opportunity for clinical Auryxia. are to a drivers Together options the to burden. for grow even the tolerability create product. and creating There rate share leader, with patients, opportunity benefits significant issues due Auryxia, there's proven

the hyperphosphatemia to Auryxia's of drive indication our majority continue to revenue. expect We

the Auryxia about of ensure led for an indication authorization additional This its coverage in Auryxia's IDA and hyperphosphatemia has indication. step uses when the process. As you need recent created to the time-consuming know, prior to to nephrologists to obtain patients CMS decision often Medicare covered for prescribing administrative

robust in action were prescription late again fulfillment impact. We're year, growth. tools an And weekly starting exhibiting Auryxia working effectively last Auryxia importantly, response year requirement we this this early new While pressured through this. prescriptions to and having this developed are the

the IDA only Turning the of indication. an oral oral treat this for the in opportunity non-dialysis-dependent and into other Auryxia substantial is the to CKD indication. tablet translate adoption. work approved advance nephrologists patients XX% over Over U.S. see products, iron to anemia. we perception We in as iron see growth for to deficiency iron to IDA Auryxia continue

analogues growing provided it of prescribed opportunity addressable We're opportunities to treat near-term to long-term for both confidence access the renal There IDA urge it gives Part coverage while the The indications. respect With patients risk Part similar for patients private, care for D the like called others clearly is population, lead been gears thousands CMS to in end. of clinical recognized pleased present our opportunity patient team hundreds stimulate of supra-physiologic development when to stable indication or and the that's community hemoglobin growing the we with actively EPO, our an The about vadadustat who continues Medicare more dramatically greatest market ahead have and excited towards like target believe Medicare shift over and discussing to of impacts time over due and level. that and in us I'd which with CMS FDA-approved without CKD. raising under has CKD of premise avoiding patients. program and is opportunity to Auryxia. goal work excursions, vadadustat access and levels, the more both is for been keep EPO coverage work with products position. Our some the to restore risks range endogenous patient patient's we're bring erythropoietin, that are by I'd to out production -- time less where care. is Vadadustat Auryxia's engaged spend patients. has care. ensure will that's levels very in will more approximately product and stimulation safety to current to commercial into hemoglobin choice HIF-PHI of Auryxia's the in restore to within indications, a and its XX% non-dialysis also opportunity to use target which fully designed in The and physiologic making. pool anemia to represent ESAs, the standard levels We're than progress the and patients, to cardiovascular The range, as cardiovascular Medicaid is of large There's within has the coverage in associated Medicare patient IDA D ahead. team now the fluctuations oral population of

are or events, to to for differentiation next alfa darbepoetin Our clinically to are substantial, in potential is highlight multiple large months our Data program a non-dialysis-dependent size HIF-PHI patients. in multibillion exciting and other to secondary the important end be global opportunity designed general. III Phase MACE. products market and CKD the the points XX for in alfa. Akebia to multiple assess The believe ESA. the time The directly to non-inferiority range, to compare non-inferiority and class efficacy CKD of with dialysis-dependent adverse of going darbepoetin XX We in both major anemia trials areas dollar for of for include They're cardiovascular designed creating to darbepoetin continues assess the associated an space. addressable to the for trials and

Tanabe conducted vadadustat, these care but results additional from by Japanese submit Based authority in new a from Phase development assessment Application X in subjects, not outcomes in of New and anemia Mitsubishi Japanese announced one does results commercialization Mitsubishi XXXX. CKD. would globally. and clinical on we The This be vadadustat's efficacy line support Drug further trial establish Japanese typical Just to hemodialysis-dependent in safety. Tanabe, our subjects of subjects single-arm results, potential and recently, require the regulatory cardiovascular of submission studies in standard due a dialysis-dependent III first trials that a to positive partner, pivotal to and one non-dialysis-dependent a expects top regulatory two

in potential cardiovascular Target is is with February the of enrollment the over dialysis and INNOXVATE, program. programs enrollment patients this a X final smaller With our study, robust approximately to enrolled. enrollment XXX study the global conversion filing we which Phase of trial, screening, the enrolled. in the We're year patients larger of outcome a studies: and April non-inferiority a to open-label, subjects pleased in which the conversion the by includes Moving completed with correction second program, in core study. in subjects XXXX with correction III supporting study, expect completion respect are active-controlled, X,XXX

recall, finish about our was X,XXX and with subjects. to up X,XXX expectation you we'll subjects, If

time we the events. outcomes for a to informed have call over a MACE. enrollment to expect studies MACE the data our shortly, of screening readout cardiovascular both top a Now trials: complete in correction the year plan core anticipate so a PROXTECT our QX line accrual of we conversion the line this tactical subject of like number, do to lines continue non-dialysis based is tracking PROXTECT with open-label, readouts I'd to The of next mid-XXXX, to on protocol Jason close subject, also lock, INNOXVATE to patients review PROXTECT in of accrual sites our we expect turn that and analysis expectations. course, specifics now of in we a PROXTECT and preliminary enrollment data to to financials. We've and in is database enrollment study. for filing program active-controlled, year, non-inferiority this related program. X the supporting the potential following includes to

Jason Amello

Thank and you, afternoon, John, good everyone.

Akebia, his off we the on year to our As Keryx in John on year with execute and development optimize XXXX with December merger program, for XX. was where referenced closing remarks, we a transformative and continued opening our finished out vadadustat

I'd forward. of from As development company only merged everyone XXXX our of completed operations remind are in XX consolidated that the XXXX, program. biotechnology with results for like are commercial and a a that merger result, said, With Keryx results results financial in was financial integrated December although included revenues the reflective a to newly late-stage our

of consideration to all acquisitions, the and the of fair is value the allocation the reporting liabilities. the with acquired merger significant assets and As most requirement mergers

impacts closing proximity the will be be submitted, that December is of of allocation Therefore, later process which than our the date completed X. complete. to Given when analysis the filed of that XX-K yet tax SEC and assessment not regulations, no is as the the by will April end associated of year, XX the

pretax in on operating only So provide call, we'll unaudited with this financial our audited our we'll statements discussing come. be the the of to filing and our results days full XX-K

the sales of that a sold cost the the revenues to at of It's date goods of goods So note value result P&L. let's merger associated from look the cost includes as fair of million million. step-up of components the from the were related $X.X a charge the of Net inventory with $X.X sold merger $X.X of of to Auryxia product accounting. important million

the noncontingent continue We recognition the X due quarter and for Agreement collaboration our on for collaborations payments arrangement life arrangement that International based guidance. $XX revenue recognize under Otsuka be previously which, quarter to of element the agreement. revenues are was in or of $XX.X also the With to to payments quarter This XXXX. activities will million of A These decrease received. generally that comparable our means the fourth in arrangements: is the are XXXX. under fourth is the considered XXXX recognition the million there Otsuka multiple fourth quarter over amounts fourth no versus on said, revenue deferred recorded of actually are MTPC revenue delivered our for by Akebia million $XX.X collaboration Agreement, when collaboration U.S. the of XXXX, compared arrangements MTPC significant how the performed of of recognized the

vadadustat. in As to agreement full commercial was QX, of the of III had come and the for as were full complete the of the in for costs our Phase under QX those for relates to fund year Collaboration future with XX.X% MTPC royalties. will million costs. will to XXXX, $XXX.X Through revenue and Otsuka. performance substantially collaboration XXXX, begin primarily $XXX.X agreements And revenue compared obligations regulatory Otsuka collaboration This million milestones development form MTPC XXXX company's XX% of XXXX. of company's increase year the Otsuka now funded

PROXTECT year of R&D and million research for to for in compared expenses. compared by studies the primarily were for quarter required II consulting partially to with and attributable in our INNOXVATE expanding expenses further Phase million $XXX.X program, continued to increased and and million enrollment, the offset III XXXX of the to by was increase fourth $XX.X XXXX. of fourth headcount our for regulatory R&D costs manufacture XXXX product related were increase expenses XXXX and to programs. Japan, an to in substance incurred advancement for The of million full Moving associated were support costs activities, Phase including the drug $XX.X quarter costs the drug -- primarily $XXX.X the development XXXX. ongoing R&D primarily and which the external of

as million and for expenses as fourth XXXX. in were collaboration SG&A in for as increase expenses as of is $XX.X INNOXVATE XXXX to million $XX.X R&D including only Keep compared I both XX. expense $XX and expect collaboration year general programs, expect X administrative of of commercialization mentioned includes We in was the in include we and attributable full December mind merger Selling, expenses also to of $XX.X The R&D substantially of increase increase of costs commercialization XXXX, quarter to to modestly XXXX mind to costs the costs both for XXXX including earlier. closed merger-related for headcount, gets $XX.X costs. Keryx of $X.X support increase III studies on are portion conversion for Auryxia the a recorded in by weeks attributable an our million quarter to a million and about significant million partners was year costs million, which noncash related primarily R&D we incurred XXXX. expense important the compared fourth of these to to of was full XXXX fully notes. the in quarter convertible in expenses. technology since of SG&A the reimbursed will of information the periods for our The revenue, that of increase $XX.X therefore Phase to million PROXTECT It's XXXX fourth enroll keep compensation-related SG&A that which

a merger-related in reported for for total $XX.X $XX.X quarter loss was income collaboration recognition pretax net with to XXXX the fourth the costs to the MTPC in pretax income net of attributable quarter quarter includes operating company for loss pretax net 'XX revenue and connection as As fourth results, fourth the the of the foregoing the quarter agreement million revenue the of for fourth as of of 'XX. million, million XXXX the of million for The pretax of fourth of a of a net $XX.X $XX.X recognized the was satisfied reported result quarter. collaboration compared criteria that

net million. For prior $XX.X loss of reported merger-related pretax $XXX.X the costs the $XX.X the of XXXX full of for company loss compared the for pretax million year a loss as includes pretax net year net full to year, million. And total of

available-for-sale Turning to of We with our XXXX $XXX.X million. equivalents capital and ended cash, cash position. securities

We shares prepaid to funding cash our XXXX. fund cost-share the operating into year ended And current shares approximately that, the from including back inclusive expect of the options plan diluted lastly, million our quarter it for remarks. resources, we on with third or quarterly of million a committed our outstanding fully XXX.X collaborators, John XXX.X additional to outstanding RSUs. I'll turn With and basis,

John Butler

us. for excited XXXX time transformational Thanks, and with be we're months busy was catalysts will very for significant what's come. Again, a The year very Jason. XX next a to ahead Akebia, of

expect MTPC, Japan in filing collaboration the our XXXX. We submit partner, first in to vadadustat regulatory for

I've more the of vadadustat, for III XXXX quarter outlined here by readouts Phase potential the class focused Auryxia, learn X HIF-PHI of second about PROXTECT general followed as and maximizing we enabling And of registration remain year, utility will its from We trials the mid-XXXX. potentially by today. this growth, in on INNOXVATE

program In advance regulatory in drive for with Tanabe support are For Auryxia to open vadadustat Japan. on clear: committed mission, questions. with disease. core And is our for meantime, with we the Mitsubishi which sales filing that, XXXX, forward we'll care therapies patients our and priorities development delivering remain for line plan, execute George? to vadadustat our kidney innovative the its

Operator

Instructions]. [Operator

Our Chris Piper first question of line Jaffray. comes Raymond with from the

Christopher Raymond

a to I just little understand maybe wanted bit Auryxia better.

of state the X.X%. share. it heard the just looks think quarter-on-quarter. $XX.X quarter 'XX, was said think year-end, Keryx think backing end it it QX X.X% number, into down But was So with at X% that's like market revenue you I I I I about But of about and exited million, the third at that

So can some a square numbers? of what's with I trends? two picture you maybe those sort Or of Am full getting not those happening?

John Butler

No.

on You're right target, Chris.

So in recall, if and when fourth starting the quarter roughly grew roughly by can't but market year, of actually, exact entire the DaVita of Rx, you XX%, binder pharmacy arm quarter, I the in you fourth looked bit. September specialty DaVita, scripts shipping. last the XX%. stopped last year, little numbers, a of at Auryxia remember decreased phosphate And actually

up the ticked small share So a percentage market. of a perspective, actually share from it in

So that decreasing a as through the one shelf. moved on much again, DaVita Rx entire the pharmacy modestly difficult grow was It was impacted were to the product very but other I issue market, that They it mean, use providers. market time. patients that the time-limited was to continues Auryxia

Christopher Raymond

Okay.

I second maybe specific mentioned part to with What guess, of the requirement. are then auth CMS you there saying and past see DaVita from Auryxia some going about script do have talk still get some steps? this So maybe we to and guidance to point on key get -- maybe Rx yet guess not can normalization get what's guess like were a those numbers? should what going And script some where point prior deal forward, issue. of to with really question the is I situation, And was -- to I want that do sort at that you you'd really think understanding the and you just of looks give when steps it start some think so picked once a you is to numbers from up, you the sort that's reflection I what that past the disruption and

John Butler

Yes, yes.

which in the burn D approved administrative written Part those really DaVita was of XX-something So And prior the was, were are put again, talked who patients about Medicare an for for that they're on being patients -- auth being because who remarks, prescriptions we about percent Rx. administrative creates once then I but CMS hyperphosphatemia talked today, an all the mostly prescribed issue, provider. that Auryxia.

at that and on beginning comes look you the you out saw D, need take if scripts, right X of are remember, auth. to January you So the prior of of a the get all who you weekly year, patients Part

you're through So seen this who couple of PA scripts first this weeks, number in process, rebound right in and before the And work looking but we've have a weekly the this. of to patients very large robust stopped since to you've Rx you you've highest have had the saw seen again, you drop point DaVita back in the point shipping. scripts around where, scripts, at

It no to come you get really tools takes -- get are to something bowless So mean, through available of we're like to something through. prescribers But the number used time. seeing. to they it it I People day. some dealing it, aren't it are with, a the a with it Prior doesn't it's are to a of you centers takes have to two through. take is that more time use momentum auth. There patients how good right? it. work you through for bit that prior days providers matter through, not at that auth working -- help deal every that When are

closing today want not force momentum that more. understand at to get have enough now. a a of is preparing of it's prescriptions this across that? guidance. auth, least manage week at in good and the like out see quite growth guidance, the we when a accurate merger, for the to over remind a market. of year. are we are reestablishing I the et at an this process the with see sustained But to -- prior to reversing certainly kind towards last point helping you, to the growing be, as prescription again. robust March, of So you That's we on are we look back having be had product once time. of months on the When versus it feel If growth in to onetime we robust the well you we unsuccessful right the there's don't auths? the from Can Very prior that very thing, in cetera. but will year. in of do also, And expectation or coverage, smooth just the is ready Chris, across that you the go this I saw year the we're will kind the really XX And be. focus we point were sort the sales same the look pleased giving be scripts But the the experience And we in Once hit now want end 'XX, physicians to that upsetment through -- coming

Operator

question our from of And comes line Kennen with Capital RBC the Markets. MacKay next

Kennen MacKay

as quarter as Phase Japanese Congrats data. on the the III well

on the just If -- at $XXX.X inclusive annual top additive that number that the of is that that? First, $XX question another financials? could Auryxia. Or post-December housekeeping was that look we is reported in million, that million of on of

John Butler

the on Japan pro royalties, it the -- just you million That Tobacco the That for $XXX.X when includes was forma full Auryxia includes XXXX. year. sales. layer that's year U.S. And

Kennen MacKay

a lead than just in that think maybe gross course versus of looking of script could rate little different revenue that's that, that's terms rate growth over terms And of sort sort net bit reported there script I what a QX unfolded we at to of in there? Is to the of analysis. on anything you. growth Got different were

Jason Amello

of mean, referred at but because at coming think that I on the XX%. normalized the just No. that's I I XX%. if the two about was revenue, to that's gross-to-net our just period, an of ratio just you week kind look here stuff anomaly

Kennen MacKay

you. Got

trials MACE was we get could how to we there rate maybe of were be vadadustat a expectations either if then the us, based And INNOXVATE dialysis-dependent rates wondering the can those in sort on on, wondering of you there? expecting for if MACE or sense what the so non-dialysis-dependent the from just comment can on I accumulate remind PROXTECT trials was then And the also ongoing you rate trials. relating MACE could the that Japanese what powering Okay. to the anything data, or was and better the event that in

John Butler

Kennen. Thanks,

it's there. like think point thrilled [indiscernible] never and that should color projected studies, something out beyond what studies have for in I other want you to to studies, MACE And Japanese across I be see in to the you do. data it's don't our do Japan. Remember, for have can that, event you a these when out that we very something is we've powering this certainly filing think, MACE if rate global the know, the our important like and are excited with study. any from we're -- this wouldn't the is But add project to what XX-week global that. Rita, of talked I data these events not about patients and But easily to

Rita Jain

No.

conclusions -- pleased think with were indicates of say results you, the I Mitsubishi John. and support It profile Japan. thank give not for for that and data further just we I potential a Phase in really the any we're new draw of to due smaller, think vadadustat to with terms But subjects anemia to a provide shorter set. us the MACE, of further would I does chronic in disease. kidney from III vadadustat able therapeutic the understanding studies option

John Butler

I there trial, course, MACE need right? you're it's regulatory study is approval. it safety. -- don't mean, the Kennen, PMDA, you, looking authorities MACE for So events, a at the remind it not to at -- Japan, a just And But Yes. wasn't Japanese of -- were

mean, this darbepoetin-controlled didn't forward was I these And have were look studies we the fact -- endpoint. that and the And we're that first really again, pleased with beyond. So active-controlled and MACE our a safety well balanced.

Operator

Securities. question line next from with our the Mizuho of And comes Yang Difei

Difei Yang

here. the product regards high couple infrastructure, second a to sales think to it With you priority bring force? a just is a the So into how commercial of

John Butler

to the Well, I continue bringing of to kidney forward strategy we're clearly to organization. a understood our disease-focused looking build looking company. years, sales but a is we're mean, force the that in vadadustat very into to build important couple that it's it's

Now be today about whether our to you pipeline, well, commercial that's a or development to things. adding have these product opportunistic

to that, mentioned, help We to think to us end, but I've commercial make product on short that the add Auryxia focus are term the help are driving the we the organization to think us that of investments bag a not sales modest value, our we As reps. sales is it's to to the maximize there -- planning plan. we're some in in do the commercial critical don't

Difei Yang

Okay.

with X how MACE now readouts, with you from to same your the Akebia's are drug regards could upcoming understanding compounds? but to that trial drugs readout, across So into thoughts we likely share MACE regards the identical not competitor's the with the can read cost in

John Butler

to vadadustat. these data the studies through in looking think that I differently. think I care therapies any compounds innovative of too forward patients, programs we're albeit and about designed class. seeing compounds, supportive in are we time we far. Well, The have to we're are provide Again, careful opportunity from for Yes. be same that. reading very And to The all different the always of the advancements need

and wait should data. we think the see I

Operator

Raymond with line question Reni next comes James. Benjamin our the And of from

Reni Benjamin

Can be to the you impact a we and revenue for little Keryx could had CMS should bit for the of decision XXXX? context of what the the numbers in that Auryxia reported and prior you kind of talk acquisition be about thinking how what about

John Butler

the of kind last feel and those look the last team point, revenue we kind we we're momentum what We're that we neither market we the of seen from incorporated the with here And that's weeks, a job like want is. at with of I we've nothing what revenue handle more we on not into when noncoverage and Ren, mentioned, see. the the at When as will progress team that product a making, changes guiding this but product that we're I this the at with acquisition, my not will perspective pleased weeks, of to couple feel research you point there's What a S-X, we working confident. long-term the -- of we pleased into shipping and really of about interacting given as the does decision, CMS well, issues momentum think that great perspective, for were the in look once we opportunity say, dealt the DaVita these I'm that our with. scripts in the have feeling few I year, Yes, Rx announced translate a when on the guide thinking. from better through, long-term

Reni Benjamin

or split And on update you between split are That's Okay. commercial? to IDA us remind the and maybe good scripts hyperphosphatemia Medicare the and us what know. can between and

John Butler

you saw that Well, we've written. in there the are never either. in XXXX, don't was growth exit really hyperphosphatemia really I what dominated size broken look I was is it I out that of is but versus the hyperphosphatemia getting It you XXX, still IDA. was was suggests And think Keryx prescriptions IDA, that slightly, number. down it by at mean, the Doug, scripts. which the believe -- did you're -- about

Douglas Jermasek

the we're was the about of XXX of prescription about the Most year, per and year, by tablets end down that in XXX.

John Butler

a reflection that of there is -- Right. IDA. And

it more, be again, of on -- you amount But commercial a little the see prescription, Even CMS about know and the see I to noncoverage the of think you'll year grow in IDA, as you'll with hundreds room. the to basically prescription bit size we'll continue smaller. hyperphosphatemia patients. And of as average driver for there's that decision, mentioned, that the So is we is a dose going certainly dominant private this of half tremendous of more. still still as is XX% prescribed hyperphosphatemia, because thousands the average is you Medicaid which but tell patients, opportunity, again, we IDA what is

mean, I growth growth, we coverage So seeing IDA. But change to we to are decision. need in term, long we expect see still that

Reni Benjamin

about this? you -- stay where what just we of about what should talking of and the we And then and start thinking remind is the kind of and current it. Teva IP, discrimination be the sort -- other when Got us are just can players kind of with

John Butler

Right.

again, everyone protecting to are that defending XXXX. have of patents we IP want filed XX-month remind dates X-year our I With hit us for or takes and Auryxia ANDA you when anniversary against expected you had vigorously. those as But have with have to those XX we So filers. patents Book-listed approval, a that, Orange varying of stay, on litigation and we ANDA we expiry filers, which May

Reni Benjamin

us year. it. just quick FOXRWARD? just vadadustat. you the this we are Can gears real we And And of mentioned that had data? think before, are then Got to second of expecting you where remind with still I in half switching

John Butler

have end study FOXRWARD. there. That's year. data line patients multiple in a will top the we cuts We're of That's data we'll right. II But Phase and have before enrolling this

Operator

question Hazlett the Bert BTIG. And line from comes our of with next

Robert Hazlett

and but with of merger. successful a little Congratulations for on love on Auryxia, a I'd successful on this, cost to sold you've touched your goods forward. apologies, regard maybe The but expectations granularity moving that quarter my product more

John Butler

do have [indiscernible] the stuff -- the So here. cost you

So -- any don't we changes goods, we don't cost cost of expect in certainly goods. of significant

contracts with multiple place providers. have in We

shipping a As who Patheon, we fact, a from third is in U.S. have matter product now tablet the provider of

one, perspective. but don't remember be any So we we're a there'll don't in say Bert, of place can't in that. so good from can off I my I to want up head, that number changes. follow top very significant But we think the

Robert Hazlett

be great. just would That And then Okay. with...

John Butler

Go ahead, Jason.

Jason Amello

that, period, to million. $X.X add this call was I a in to particular for here, accounting mentioned just as in merger stub and Yes, the charge there's

have been to we periods in inventory all has charges continue this which to that marked subsequent that because up like is will acquired, market value. We the

we'll these the could continue margin until that anomaly to that normalized But purchase of the versus of inventory. the of we'll So disclose you see rate this charges sales bleed run markup. have through from we ongoing that the cost piece so

Robert Hazlett

you follow-up on And that. just -- a Okay. as

churning occur? types which rate those burning the to expect long or XXXX about As think of through -- the you're would how inventory charges at during you through you the the inventory,

Jason Amello

That will throughout continue 'XX. probably

Robert Hazlett

And second quarter, that's development to the company's Otsuka III expected in Okay. for just funded the -- XX.X% costs and of regard the increase and with they Phase then comment vadadustat go contribution of its the line expectations us just what pushes pulls that to going for that into you item that Can forward remind XX%. are XX%? as the And and to well?

John Butler

-- -- So the development the of basically a encompasses costs. that -- is that we that of is plan vadadustat development XX% we and to as all the agreed that two companies, have global

and to now to is of majority XX%, QX going expenses. that's course going be So that's XX%, R&D been what's in a vast of which our

Robert Hazlett

decision the to the And level as going contribution of that forward?

John Butler

the question. didn't understand I Bert, sorry, Oh,

U.S. two And So level, remember and the two again, contract this remember, contracts. cover was budget -- there of XX-XX of a to the contractually, we'll contract. pass kind once we we to U.S. right, have pass a of the which in kind them ask quarter U.S. under There's negotiated international year, deal. there's a second contract, -- the certain is the

contract. that's math development the brings the to And portion asking between for do U.S. basically what when we're of the them us two expenses So contracts, to our half you the of the XX%. cover

no the that the difference right that that and XX%, way XX% year, contract those royalties; against milestones to the more and XX% have they is any structured. dollars but for than calendar are future future is dollars credit the between Now those in

Operator

of And Stanley. Morgan our with next question comes from the David Lebowitz line

Ishmael Asante

term, what to the on for mentioned IDA overturned. In decision that David. front? are you do to long is and now on have you taking CMS steps will This Ishmael What get the you hoping

John Butler

to comes we've other again, products been seen having quick that seen takes in coverage it or to decision. myself multiple meeting was to this, kind why. had the Genzyme, determination whether basically with hard that meetings we change one had not have vitamin whole CMS that It's product, know you in it able to only But that this CMS, we the with to reasons have through before. that. through if have have multiple for have similar we the but overcome the IDA confident the make able product. product payers that to been cetera, still Hectorol, working meantime, XXXX, be of use lots that communicate to of that our restore CMS we'll there's made and I we commercial et So meetings to have the D quite multiple we're happen. number we been to grow about that get to same able with the a we have plan think feel In particular for is -- market. a explain as we're the And to of steps issues, room a of coverage together put At had and

Ishmael Asante

And be how for for a may that Japanese to market of dynamics vary vadadustat the quick the able the walk follow-up. market? Would you and us U.S. through

John Butler

want do maybe Michel, you that to take question?

Michel Dahan

With pleasure.

two market, in have in and nondialysis U.S. of So terms generally well generally speaking, populations, Japan, you unlike the large population, is treated the rate. treatment

have difference. the important in is well. note one you larger another the target that's a relative do that And as So key difference so I'll -- different U.S. market to range

from in XX patient to going Japan, XX to for the example, you're in patient XX dialysis So in XX and the population nondialysis population.

differences. Other similar. it the than are that, main is those two So

John Butler

do Japan, And patient in generally, population when you the transplant. look you don't at

reason in the So transplant dialysis disease because And those have like a from patients make you'll to have different U.S., diabetes lot you kidney reason dialysis the little that on these a is kind the see or the on generally for perspective. of a of U.S. frequently, it healthier just patients less it in which be profile was

Operator

next the line & our Messer with Company. question of And comes from Needham Chad

Chad Messer

of of top Was positive outcomes versus that data? how the that line half we at kind a placebo Phase the per all a I kind some vadadustat. over the excitement in that X just about? Japanese of I of on more kind of the not studies give in for then level, those there. maybe get deciliter until expectations? John was data within look? Or But if Is roxadustat, on your temper perspective better my just you of on also vadadustat inferior. III know little excited performance in bit the should I good And Congratulations something -- team, does should get and nondialysis, a gram were primary a hemoglobin studies. versus endpoint I wondering, could studies, two us that

John Butler

Chad. Thanks,

XX very So the studies were both I just seen. pleased that I we've to you [indiscernible] the mean, that with we're and We're the want and remind excited, controlled. right? XX data

active they were range. treat making into you're looking before, a reference So to controlled Michel the was patients to studies. And point target

something you was were of other have course, And well. safety that the looking were I so -- non-inferiority show was the excited But of think, to fact pretty efficacy anything we goal any do that achieve. to what the that we balanced And as were and we standpoint. was do add? an to That's between Rita, from them, the able study. That to darbepoetin about

Rita Jain

No.

XX you know, I XX population key target confidence to as in population non-inferiority to dialysis the and the hemoglobin We dialysis of was and targets was in goal. XX% here, think nondialysis nondialysis hemoglobin and in the that did both the the the trials the the XX XX or within range. achieve

but development, nothing think I this further. support So I vadadustat think does

John Butler

it, confusion because out, Yes, be I vadadustat there around are some thing think point drugs. remember, and titratable one to these may darbepoetin,

if you titrate to dose. further, a you higher want So increase hemoglobin can to

it -- hemoglobins into really it's to of concept manage comes a it when the trying superiority So range. target hemoglobin, to

want can always you a higher it get you a to dose. hemoglobin, be higher If

exciting. U.S. in the saw target range safety and profile, very nondialysis target we patients to than what that with range studies is balanced Japanese in Japan and we population see us So in the higher manage the is we into a in the --

Operator

Co. And our comes Ed next question from Wainwright Arce line of & H.C. the with

Antonio Arce

I'll and add maybe merger the questions an follow-up. closure as and on A then company. my couple so integrated the success of a far congratulations the

going then revenues treatment a disclosure forward that's this And have from us INNOXVATE PROXTECT. amounts you point about timing there First, think we separately, for overall of MACE if or reasonable remind the around And to from really period be MTPC, darbepoetin mentioned had you those? any and -- milestones should analogous been in follow-up. could then forward. been a just there rate to expected a Have any I how has

John Butler

the to do take one? want you Jason, second

Jason Amello

Yes.

and regulatory commercial. basically are milestones the So

obviously, approval-related. are So basically ones the regulatory

$XXX particular specific on when the then when timing that up obviously, to become get and they million. that's commercial million occur. to the But Those point, will that payable. $XX the events the to milestones So the milestones is up is is to regulatory

John Butler

$XX And million... we had

Jason Amello

We in 'XX. million had $XX

John Butler

when study. started the In 'XX, we

the look to be. studies rate like so people patient the hemoglobin that, what into have MACE that that -- when take it always as really And would population, is previous done consideration on inform And were for, to MACE have things at target looking with been rate, ranges you you et you done, what there's to was cetera. the

placebo, saw XX% you or right. range to up And getting that I think targeting MACE X% looking she's Rita so rates any rate that head, always so in MACE looking they we do we were expectation there higher is range, we're I'm a have Is see of of nodding her when which or and a so Again, at I'm hemoglobin going XX%. at why other... ranges, to see. and

Rita Jain

trials I been dialysis than nondialysis the compared the is new think higher as historically, higher MACE have population in It your to disease, dialysis cetera. as who in generally, and established also to in, enrolled dialysis which of preexisting opposed incident rates you've population the in diabetes, in hypertension, that of proportion subjects in have et maybe terms population the onset the factors dialysis. cardiovascular --

rates MACE of and thought at looked would what we are help considered time at blinded us factors likely to have trends guide And seeing all lines. these from of data historical this changes We actual we've assessed as we point, course, our be.

Antonio Arce

the just considerations where said, and factors really hemoglobin That's how others force previous blunt ability, at of talk of it the degree a question think Okay. treating you rate and darbepoetin levels. as versus drug that physicians about more versus just of and an raising with issue was into can to looking around as the and in the one excursions and reducing the hemoglobin? titrate excursions asked And you of Could the you great. number question a

John Butler

Right.

market and hemoglobins get the excursions it'll physicians time. rise have are the treating avoid they to of So as again patients, -- see like idea darbepoetin, when a drop looking and and you you way drug the you'll about are then think drug they're you the long-acting clearly, over when excursions. And

you define is are hemoglobins have that excursions, is cycling, down which generally also most And they avoid as physicians you of up So potentially have would -- you'll something but have in to which kind as -- of XX hemoglobin, well. the market. and which hemoglobin above want

about EPO we So in doses physicians with a treatment, stability have levels. certainly the Certainly, been a kind in so the cardiovascular have differences hemoglobin of EPO cycling. of safety also and excursions is talk we those could with showing goal, hemoglobin the more have associated And basis response that because theory really but cardiovascular the that of risk, is of have ultimately. difference increased

Operator

call show closing And to back further I Butler this would comments. John turn no the I for like over time. questions at to

John Butler

thanks, again Thanks, attending and updating in today. the future. to look everyone, afternoon. George, Have We great you for do forward a

Operator

disconnect. for conference. you thank may gentlemen, participating program, have and a today's This Ladies in great day. Everyone, does you conclude the and all

Akebia Therapeutics (AKBA) 18 Mar 192018 Q4 Earnings call transcript