Akebia Therapeutics is in a high-stakes race with rival Fibrogen to treat anemia with a pill, not an injectable biologic. And it just got a bunch of cash to try to get to the clinical finish line.
In a deal announced this morning, Japan’s Otsuka Pharmaceutical will commit $265 million to Cambridge, MA-based Akebia (NASDAQ: AKBA) to fund late-stage trials of vadadustat, Akebia’s experimental anemia pill. In return, Akebia will split the costs and profits of vadadustat with Otsuka in the U.S. Akebia could also get another $765 million in downstream payments, but vadadustat has to hit certain development and sales targets for that money to materialize.
The $265 million in committed cash includes $125 million up front for Akebia, another $35 million in the first quarter of 2017, and an additional $105 million “or more” for vadadustat development costs.
Shares of Akebia surged more than 55 percent, to $13 apiece, in pre-market trading on Tuesday. The company is holding a conference call this morning to discuss the deal.
Akebia has been steadily accumulating partnerships to help fund vadadustat’s development and eventually to help sell the drug globally if it succeeds, albeit while siphoning off some of the drug’s rights. In December 2014, it inked a deal with Mitsubishi Tanabe Pharma, giving the Japanese firm rights to vadadustat in a variety of Asian countries. In return, Mitsubishi agreed to cover $100 million in Phase 3 development costs. In a statement today, Akebia said it’s in talks with “multiple parties” regarding a collaboration in Europe.
Vadadustat is in a race with San Francisco, CA-based FibroGen (NASDAQ: FGEN) to try to bring the first anemia pill to the market for patients with chronic kidney disease. The huge prize they’re vying for is to replace blockbuster biologic anemia drugs like Amgen’s epoetin alfa (Epogen) and darbapoeitin alfa (Aranesp), which generate billions of dollars despite significant safety concerns. Erythropoiesis stimulating agents, as they’re known, generate an estimated $3.5 billion in annual sales in the U.S., according to Akebia. They’re given to patients whose failing kidneys start losing the ability to make erythropoietin, a protein that signals to the bone marrow to make red blood cells.
Both Akebia and FibroGen are developing drugs that work much differently than these biologic drugs. By essentially tricking the body into thinking it’s at high altitude, these pills stimulate a corrective response to low-oxygen conditions, which is to make more red blood cells. FibroGen’s roxadustat is already in Phase 3 trials, with data from one trial in China expected early next year and another three in the U.S. and Europe underway. FibroGen—which has partnerships with Astellas Pharma and AstraZeneca—has said that it expects to file for approval of roxadustat in the U.S. in 2018. Akebia is enrolling patients in its own Phase 3 program—one trial for patients on dialysis, and another for those who aren’t. These trials are expected to wrap up in 2018.